Ways for Business Owners to Weather the Bad Economy

During an economic downturn, small businesses are often hit the hardest first, and a ripple effect works its way through the rest of the business world. According to the article, Entrepreneurs Finding Ways to Thrive, “When small firms can’t grow, the impact is felt in loss of jobs, revenue stagnation and supplier retrenchment.”

An Atlanta-based SCORE counselor, Steve Bloom, was quoted in the article saying, “There’s no safety net for small businesses…The SBA is not in the business of making loans to small businesses; it only offers financial guarantees to participating lenders.”

So if startup and small businesses are the crux of the business world, and they cannot obtain loans from banks and the SBA during a bad economy, what options are left?

For starters, small business owners can sell their invoices to a factoring firm. (For example, small MTSOs, medical staffing agency owners and medical coding company owners could certainly sell their receivables to PRN Funding, which is an accounts receivable factoring company dedicated to funding healthcare vendors.)

Bloom suggests increasing your networking opportunities by joining trade associations, chambers of commerce and rotary groups to locate private investors. He also suggests that small business owners plan ahead by setting aside 3-6 months worth of operating costs and salaries.

Coauthor of So, You Want to Start a Business? 8 Steps to Take Before Making the Leap, Ed Hess, advised in the article for small business owners to draft a detailed emergency plan.

Some other simple suggestions include sending out invoices promptly and offering discounts for quick payment, lease instead of buying, and hire part-time employees instead of full-time ones.

Medical Transcription Association Starts Facebook Group

The Association for Healthcare Documentation Integrity (AHDI) recently announced the launch of its active Facebook group, AHDI Members on Facebook. At 218 members and growing, the AHDI Facebook page promotes the same overall mission of AHDI: “To promote the integrity of healthcare documentation through development of an educated, prepared workforce in clinical documentation.”

The active Facebook group offers recent medical transcrition industry news as well as a lively discussion board, lists upcoming events, displays member photos and encourages “wall” conversations. The AHDI Members on Facebook is open to everyone.

Sign into your Facebook account for more details.

Updates on the MedQuist Class Action Settlement

Medical transcriptionists who transcribed work for MedQuist at any time during the period from November 29, 1998 to August 11, 2008 and were paid on a line-based unit of measure for their work are a part of the class action settlement concerning MedQuist’s breach-of-contract.

According to the official MedQuist settlement page, “the case asserts that MedQuist manipulated its computer systems to underpay its medical transcriptionists for their per-line medical transcription work. MedQuist denies that it did anything wrong.”

The bulk of the $1.5 million settlement payment will go to the Association for Healthcare Documentation (AHDI). These funds will be “used to fund programs for the general benefit of medical transcriptionists and the medical transcription industry. In addition, qualifying class members will be eligible to participate in certain AHDI programs free of charge. No payments will be made directly to any individuals.”

If you have further questions/concerns about this settlement, click here to view AHDI’s FAQs about the MedQuist Class Action Settlement.

More Hospitals Hiring Temps

An article in yesterday’s Wall Street Journal discussed how more and more general surgeons are shifting from private practices to temporary assignments as a result of the economic downturn, rising overhead costs and declines in reimbursements.

So much so that “general surgery is now among the fastest growing areas of a temporary medical staffing undystry that’s expected to double to $2.1 billion in 2009 from five years ago, according to Locumtenens.com.”

The WSJ article, Surgeon Shortage Pushes Hospitals to Hire Temps, goes on to say that “temporary surgeons used to be mostly older physicians who wanted a lighter workload, or those fresh out of training, still deciding where to put down roots. But today, more are midcareer people.”

The WSJ estimated that it can cost a hospital up to $1500/day, plus travel and lodging expenses for a temporary surgeon to come in and perform scheduled procedures and emergency operations. But as hospitals continue to face a shortage in nurses and doctors, utilizing locum tenens staffing is quickly becoming one of the only options available.

Multiple States Face School Nurse Shortages

In the past couple of weeks, there have been a number of news reports covering the shortage of nurses in schools.

According to WKSFY.com‘s web site, in the state of South Dakota, there is only one school nurse for every 1354 students. State leaders blame the lack in school funding as the cause. Meanwhile, CampusRn reported that school nurses in West Virginia “are confronting an increasingly complex batch of patients who require more specialized treatment.” Kanawha County’s 33 school nurses are dealing with hundred of cases of asthma, anxiety, ADHD, heart problems, seizure disorders, clinical depression and lifethreatening allergies.

Q: Some schools are starting to use nurses from temporary staffing agencies to help fill the gaps and administer ongoing care. Have you considered staffing nurses to local school districts?

5 Golden Rules to Make Cash Flow Work

American Express created the OPEN Book with tons of tips on how to grow a small business. Paging through the OPEN Book, one article jumped out: Go With the Flow. The brief article was written by Raymond Joabar, Senior VP and GM of Lending and Network Development, and he gives “5 golden rules in order to make cash flow work for you instead of against you.” We’ve summarized the rules below for the factoring blog‘s readers:

1. Know how to measure it. Joabar suggests monitoring your cash flow by reviewing balance sheets and cash flow statements, as well as the number of days it takes to turn inventory, and how long it takes for cash to cycle through the business.

2. Know the causes of cash flow problems. When businesses hit a growth spurt, that means more cash is needed to invest in additional inventory and infrastructure. On the other end, if your customers aren’t paying you quick enough, it can also lead to cash flow problems. Finally, slow sales lead to poor cash flow. Joabar says it’s important for busienss owners to understand the fundemental causes of cash flow to help avoid problems before they begin.

3. Build strategies that can maximize cash flow. Joabar strongly urges business owners to “get serious about minimizing fixed expenses” and “find creative ways to handle peaks in demand without hiring additional staff.” He says to think about using credit cards rewards programs and frequent flier point as cash substitutes when making purchases. In addition, it’s important for you to set clear payment terms and expectations with your clients.

4. Prepare for the Worst. Simply put, Joabar advises for business owners to get a “jump on the cash flow problem by lining up several sources of financing in advance.” Accounts receivable factoring is a great way to manage your cash flow during times of rapid growth.

5. Grow Smart. “Consistent growth is the best way to smooth out bumps in cash flow,” according to Joabar. “When opportunities for growth present themselves, plan carefully.” Every investment, including custoemrs, should have clear returns.

Healthcare Spending Climbs at Slowest Rate in Years

Although healthcare spending expanded faster than the overall economy in 2007, it only increased from 16% to 16.2%, according to a study that was published Tuesday in the journal of Health Affairs.

The study also attributed the small growth to the extremely slow growth in prescription drug spending.

The reporters of an article in yesterday’s Wall Street Journal wrote, “While most health-care services grew at the same rate or faster in 2007 than in 2006, the pace of prescription drug spending slowed to its lowest rate in 45 years, climbing 4.9%, compared with an 8.6% increase the year before.”

The published study also noted that the government has been picking up more of the nation’s healthcare tab as well. The government paid for 46.2% of healthcare spending in 2007, which was up from 45.3% in 2004.

Click here to read the entire WSJ article: Health-Care Outlays Climb at Slowest Rate in Years.

3M Earns Top Ranking for Medical Transcription and Medical Coding Software

According to BCAdvantage’s Web site, 3M Health Information Systems was recognized by KLAS for leading the market in three software solution categories: Other Dictation and Transcription Solutions, Medical Records Coding, and Medical Records–Other.

In its annual report, the 2008 Top 20 Best in KLAS: Software & Professional Services, KLAS, an independent healthcare IT vendor research firm, also ranked 3M Health Information Systems as the second highest-performing software vendor across all market segments.