by
Lauren Dubinsky, Senior Reporter | November 18, 2015
From the November 2015 issue of HealthCare Business News magazine
More volume could mean more staff, more space and more equipment,” says Wasserstein. If inventory and receivables increase, more working capital will be needed too. “The more operating assets you have, the less cash you have.” If a practice doesn’t get the benefits it thought it was going to get from greater volume, the only thing left to do is cut costs. But Wasserstein says that could mean “cutting into the bone,” which can be disastrous because the practice may not be as resilient facing business risk every day. The smallest problems can lead to a financial crisis.
“If one, sizable receivable does not get paid on time, or there’s a problem with labor, or bad weather creates unusually low volume, then you join the ranks of the financially distressed,” he says.
Aligning with a hospital
Wasserstein says that the smart practices will decide to align with a hospital. “Right now an imaging practice’s financial goal should be to survive as a business. I think you have to look at it as, ‘Am I going to make it one day to the next?’” he adds. When a hospital is evaluating a practice, it is looking at volume. “They already have the infrastructure. All they need is new volume to go through that,” says Wasserstein.
He says it’s a good idea to prepare by having an outside, impartial company identify and eliminate under-producing aspects of the business and strengthen core areas. “It may become inevitable for a private imaging center to join a hospital,” says Wasserstein. “Physicians’ salaries and reimbursement rates continue to fall, and new equipment and technology continue to over-leverage balance sheets. The sooner they realize they need to become part of a hospital or a sizable medical center, the better.”
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