The economic situation in the world economies has been terrible in this second quarter. Look at the economic collapse in the United States.
Many would say that it was foreseeable that these very steep falls would occur. Let us remember that in the second quarter we witnessed an almost total paralysis of economic activity due to lockdown.
Experts are anticipating another wave of the pandemic which can affect the revenue targets of physicians and healthcare services providers. The assortment of political, social, and economic variables can make the economy weak and vulnerable.
This has surely demonstrated to be valid over the last 2 months as the coronavirus pandemic has ceased the U.S. economy to a close to end.
The last downturn of the economy which happened about 12 years ago, in 2008 and the lessons learned are still active in the minds of a large number of Americans and economists.
They had together endured a few financial downturns and had seen never before that is severe and this long to stay. Indeed, even those with high wages and high total assets were not secure.
Experts started to notice specific patterns in the behavior of people as the pandemic continued for a considerable length of time. They could effortlessly anticipate if an individual would endure the recession or not, irrespective of their net-worth.
Here are some financial patterns that have affected physicians with solo practices and small clinics during the recession.
Cost to income proportion: People were living normal, spending on their living, homes, and extravagance products. They were utilizing credit and borrowed capital for both, their lifestyle and were part of a cycle. This spending cycle has been sabotaged by the pandemic.
Absence of precautions: The doctors need to be extremely cautious and completely educated about who’s on the opposite side of the table.
How Could Others Survive and Even Prosper During the Same Time?
In the global economy, the coronavirus crisis is increasing with each passing day, the consequences of which we are still to understand. The crisis has hit all sectors, from services to industry, including agriculture.
The problems have become more acute in the case of healthcare; physicians have witnessed the collapse of their business and find themselves in a very critical situation.
To limit the economic and social damage caused by this critical situation, a series of measures should be taken, ranging from the necessary response at the emergency stage to those aimed at reviving the economy and reconstruction.
As we witnessed a financial environment with so much disaster, a few physician practices survived the negative business impact of the pandemic.
Most of them planned way before for their success, either all alone or with the assistance of top counsels. Here is what physicians can do to fight the recession.
Physicians’ recession survival guide, you can implement these methods:
- In the context of the unprecedented crisis, we are experiencing, what can be done to survive the sudden drop in business and the potential lack of cash flow? It is first of all essential to make a short-term cash flow forecast and to assess the options for cost savings and eligible aid. Once this action plan is established, a process must be put in place to implement it as quickly as possible with the support of the entire management team.
- Faced with declining collections and revenue, it becomes essential to reassess expenses. Certain fixed costs and certain cash outflows are inevitable, others less, and it is therefore fruitful to implement the budget technique known as “zero-based budget”.
- It is necessary to create a special team comprising the managers to have an overview of the challenges that the practice can face. It will provide an overview of the situation and would make sure that the business operations do not come to halt due to interrupted cash flow.
- Focus on the supervision, authority, and acceptance of problems helps control hazards. Having and implementing expertly drafted polices to do so counting on issues like business strategies, HIPAA, and IT security.
- Those who survived are capable to meet their personal and family expenditures responsibilities from existing assets and investment funds. They were willing and ready to change their ways of life and expenses to current financial conditions. They lived within the limits they had, so they had some space to operate when things go out of control.
- They had the best expert advice for tax, business trades, and litigation problems.
- They had extraordinary individual and business credit. They could get to that credit when required and had associations with banks that permitted them to settle on terms that were best for everyone included.
- They and their financial consultants had investment plans with the market to withstand and even benefit from market unpredictability and debt. Their advisors were happy to reconsider these plans and make shrewd, strategic choices.
- They worked very hard to make their clinical practices and different businesses they had as best as they could can.
- At last, they stayed agile and adaptable. That implies settling on some extreme decisions and being proactive.