Healthcare Finance
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henryjoycelynhcm6761504b01_ph_4_ip.pptxHealthcare Finance
Joycelyn Henry
HCM676-1504B-01
Colorado Technical University
Medical Coding
My Dream
My Dream is to start a medical coding business.
Medical Coding is a business in the health care service industry.
It will offer the following services and advantages
Complete patient record setup.
Electronic and manual claims filing.
Patient billing.
Claims posting and patient record updating.
Collection services.
Complete practice analysis
Assistance in negotiating health care contracts.
Automated transcription services.
Volume discounting.
Medical Coding business involves several specialists such as cardiologists, psychiatrists, nursing and assisted-living facilities and labs.
Specializing is important in this sector because a huge part of marketing my business to prospective customers is being able to speak a language that they understand and to have a profound understanding of their needs. This can only be achieved through specialization.
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Definition
Medical Coding is a field that requires the basic knowledge of computers.
It is a service or business that serves hospitals and medical centers.
The basic task associated with this line of business is working with doctors and medical directors to encode documents for the purpose of proper insurance filing.
Physicians and other medical specialists heavily rely on medical billing and coding specialists to send payment requests to insurance and patients providers.
Medical coding and billing specialists also perform record keeping and customer service duties through providing information about billing to patients and insurance providers.
These line of business is one that requires a keen attention to details, excellent record keeping skills and medical transcription skills.
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Pre-requisites to Starting the Business
Acquisition of a good management software.
Vigorous Advertising.
Office or Home-equipment including a new fax machine or fax software, a land line connected to the computer and an answering machine.
Stationaries such as business cards and letter heads.
Clearing cost expenses to enable me to directly submit claims to insurance companies.
In acquiring a good management software, I will obtain Medisoft since I find it to be user friendly and affordable.
Through advertising I would prefer the use of post cards rather than using actual advertising letters. Luckily through proper advertising I will have enough clients that word of mouth will spread which is always the best bet on advertising.
The cost of clearing varies from less than a hundred dollars to several hundred dollars and it might even involve additional fees for every doctor or account held.
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Objectives of the Business
To process approximately 1500 claims in a month.
To become regionally recognized as a local industry expert in the field of medical coding and reimbursement.
To add several other services to the initial offering.
Processing approximately 1500 claims in a single month will offer good returns through income obtained. This will also increase my recognition as an individual or expert who deals with medical coding and reimbursement.
Other several services that I intend to add includes, Code optimization, managed care contract analysis, full practice management, fee analysis and Medicare financial impact analysis.
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Billing and Income
I will adopt three main ways of billing my customers.
Pre-claim billing.
Hourly rates.
Percentage of collections.
Income earned will depend on the effort I put into my line of business. I will be working on a full-time basis.
The pre-claim billing method is one where I will use a fixed amount for each claim submitted regardless of whether it is paid or not. In situations where a claim is denied due to faulty information given by a client the I will charge a new few for re-submissions. However, I will adopt this method based on the customer.
Through the hourly rate, I will charge fees depending on the hours I have taken or consumed with a client. Them hourly rate in many regions is approximately 16.60 dollars per hour.
The third method is the best since it incentivizes the billing specialist to get the maximum reimbursemt.
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Financial Analysis
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Service 1 | 33000 | 48000 | 52000 |
| Service 2 | 28800 | 0 | 0 |
The sales Forecast for year one will be approximately 33000 for service one and 28800 for service 2. In the second year, service one is expected to give 48000 for service one and no income for service 2. the third year will be expected to result to 52000 in year one and no income for year 2.
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Pro-forma Profit and Loss
| Pro-forma Profit and Loss | ||||
| Month 1 | Month 2 | Month 3 | Month 4 | |
| Sales | 1400 | 2800 | 4200 | 630 |
| Direct Cost of Sales | 0 | 0 | 0 | 0 |
| Other cost of sales | 0 | 0 | 0 | 0 |
| Total Cost of Sales | 0 | 0 | 0 | 0 |
| Gross Margin | 1400 | 2800 | 4200 | 630 |
| Expenses | ||||
| Total Expenses | 3037 | 3167 | 3387 | 552 |
| Profit before intrest and taxes | -1637 | 367 | 813 | 77 |
| EBITDA | -1637 | 367 | 813 | 77 |
| Interest Expenses | 131 | 128 | 126 | 12 |
| Taxes | 530 | 99 | 137 | 13 |
| Net Profit | -1237 | -396 | 550 | 52 |
| Net Profit/sales | -88.39% | -14.15% | 13.09% | 8.25% |
The speculated net profit and loss for the first four months include, -1237, -396, 550 and 52 dollars.
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SWOT ANALYSIS
Strengths- Factors that will encourage exceptional organizational performance in the business.
Weaknesses- factors that will affect service quality or increase the service costs.
Opportunities- One major opportunity for my line of business will include a new business initiative.
Threats- These are the factors that can harm the performance of healthcare organizations.
I will prepare a detailed SWOT analysis for my coding business giving emphasis on the strengths, weaknesses, opportunities and threats. For my SWOT analysis preparation I will be realistic, avoid complexity, analyze everything rationally and update it when any problem is identified.
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Strengths
Strong Customer Support.
Well thought out workflow processes.
Robust Software.
My business strength will be focused on establishing a strong and robust customer support. This will be supported by my use of a robust software and a well thought out workflow process.
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Weaknesses
My business will face several speculated weaknesses.
Initial costs of software development.
A limited marketing budget to develop my business and niche awareness.
Struggling to turn non-technology physicians into willing consumers of medical technology.
As a start-up business, several weaknesses will face the business. The possible weaknesses are the acquisition of a software, limited marketing budget to develop the business and struggling to turn the non-technology physicians into willing consumers of medical technology.
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Opportunities
Participation within a growing industry.
Increased margins as the customer base grows.
Possible mandates by insurance companies to use electronic filing.
Theses are the speculated opportunities for my business, collaboration with different healthcare organizations, increased margins as the customer base grows and possible mandates by insurance companies to use electronic filling.
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Threats
The possible threats for the business include,
Economic or political insecurity.
Increased demand for expensive medical technology.
Budget deficits on state and federal level
Increased pressure for reduction in healthcare costs.
The threats that will face the business will be of internal and external nature including economic or political insecurity, increased demand for expensive medical technology, budget deficits on federal and state levels and increased pressure for reduction in healthcare costs.
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Competition
My business will face major competition from other huge players in the business who have more experience, education and a large client base.
The external market is one that is filled with numerous competitors that my business will aim to compete with.
Conclusion
Through medical coding, I intend to bring major changes in the health care service line.
Medical coding is a field that requires a lot of freshness and new skills to improve.
References
Adams, D., Helen, N., & Valentine, B. J. (2002). Addressing medical coding and billing part II: a strategy for achieving compliance. A risk management approach for reducing coding and billing errors.". Journal of the National Medical Association , 94.
Buck, C. J. (2014). Step-by-step medical coding. Elsevier Health Sciences .
Johnson, S., & Robin, L. (2012). Understanding medical coding: A comprehensive guide. Cengage Learning.
