Banks today are tailoring their
approaches and products to meet the
unique needs of their health care provider clients who, regardless of their specialties, have several commonalities; such
as their need for enhanced revenue streams,
secure information transfer systems that
conform to government privacy rules, and
customized and flexible credit services.
Until recently, the clients relied to a great
extent on their own resources to finance
their operations and transmit patient data,
which inhibited their growth and income.
Today, a growing number of banks are providing an expanding variety of innovative
financial service packages and secure
patient data transmission systems to health
care businesses that will increase their
cash, decrease their receivables and
streamline operations.
Smart Business spoke with Maureen
Carson, a first vice president in Healthcare
Finance, and Juwana Zanayed, a vice president in the Healthcare Division at MB
Financial Bank, to learn how owners of
health care service provider businesses
can take advantage of these state-of-the-art
programs.
What innovative approaches are banks using
to serve health care service providers?
Banks are providing an integrated, one-stop
approach to helping health care providers
with their financial needs. They focus on
three major themes: relationship management, technology and credit services.
Generally, the bank designates a relationship manager (RM), who is the coordinator
on a specific account. We’ll use a hospital
administrator or physician as an example.
The RM serves as ‘go-to’ person who
knows the client’s business and needs and
serves as the point person for the various
business and personal banking needs of
the physician or hospital. As a result, the
client does not have to search throughout
the bank for the right person.
What are the benefits of a relationship management approach?
First, the RM has an in-depth understanding of the health care provider industry and
can suggest best practices in cash management and financing vehicles. The RM’s in-depth knowledge of the industry allows the
bank to look at the customer relationship as
a whole. Thus, it can price and structure various services efficiently. Credit facilities
include lines of credit, letters of credit,
working capital, personal banking and
investment needs, wealth management
products and cash management. Services
like those are a major change from what
health care providers could expect from
their banks just a few years ago.
How do banks adapt their technology competencies for health care providers?
Banks have invested millions of dollars in
their treasury management products and
services in order to provide their clients
sooner cash availability; for example, lock-box, remote capture check and point of
service collection (POS). Tailoring treasury
management services to the health care
provider sector by understanding their
need to reduce accounts receivable as
quickly as possible and providing creative
solutions is a great benefit.
Technology advancements allow for transmitting certain data directly from the
health plan’s remittances to provider’s
patient financial system, thus bypassing
input or the posting process. This capability results in streamlined operations and
improved cash flows, and makes it possible
for the health care provider’s employees to
perform other functions.
How does the credit part of the package fit in?
As far as credit services go, banks consider the entire relationship that they have with
their client. This makes it possible for them
to offer competitive ‘relationship’ pricing on
credit facilities. That is predicated to some
extent on the RM’s deep understanding of
the health care provider’s business and its
unique reimbursement and collection
process, which involves third-party payors
like Medicare, Medicaid and commercial
health plans’ payment structures. It is
important for bankers to understand the
health care provider’s business and cash
flow, because the cash flow is the source of
repayment for the loan. Bankers, therefore,
can work with their clients to structure the
loan in the most advantageous way.
Banks also offer a wide array of credit
facilities, including accounts receivable
financing, taxable and tax-exempt bond
transactions, equipment leasing, medical
office building and ambulatory surgery
center financing, and interest rate management products.
What criteria should health care providers
apply when looking for a bank?
Four key criteria are the bank’s willingness to work with health care providers of
all sizes; the banker’s in-depth knowledge of
the industry; the sophistication of the bank’s
information transfer technology systems;
and the spirit of enthusiasm and cooperation to allow specialists to work hand-in-hand.
MAUREEN CARSON is a first vice president, Healthcare
Finance, with MB Financial Bank. Reach her at (847) 653-1038 or
[email protected].
JUWANA ZANAYED is a vice president, Healthcare Division,
with MB Financial Bank. Reach her at (630) 203-2717 or
[email protected].