Bad debts are rising

Garry ChapmanUncategorized


Bad debts are rising

Increasing numbers of consultants’ private practices are risking huge financial losses after allowing bad debts to escalate during the credit crunch.
Many are chasing thousands of pounds, but in the worse case scenarios, they have been owed hundreds of thousands of pounds before acting.
According to one billing agency, the problem is 25% greater than 18 months ago and is set to worsen in the year ahead on the back of the recession.
Garry Chap man, general man-ager at Medical Billing and Collection, advised: ‘If doctors are owed more than 10% of their turnover, then it’s something they should be looking at. If they are owed that now, then it’s only going to get worse.’
The mounting debts crisis is not just confined to solo practitioners.
The larger and more successful a practice is, the bigger the trouble can be.
He finds more than 80% of consultants are billing less than last year. But late invoicing by busy specialist is compounding the problem, with some patients wrongly claiming they have already paid once their bill arrives months later.
Mr Chapman said one common scenario was doctors who effectively work for nothing because they continue to see patients who never intend to pay.
Other patients have returned back home abroad, or are jobless, by the time the invoice is raised – making it extremely hard for specialist to ever get their money.
New independent practitioners are also hitting problems because they wait too long, sometimes six months, before billing.
Added Mr Chapman: ‘It’s a shame; they are working very hard, but are not getting the full rewards their work deserves.

If you are a businessman, your focus is on the bottom line and on making a profit.
For most of the consultants we see, the focus is on making sure the patient is being treated correctly.’
Bad debts for consultants in our latest Profits Watch (page 38) nearly doubled. Accountants warn this will worsen as the self-pay market comes under pressure and insurers try to cut fees.

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