Thursday, November 29, 2012

the Importance of Financial Forecasting in the Face of Uncertainty

Uncertainty is a current reality for health centers at both the state and national levels. Health centers must continue to serve patients and expand while questions remain concerning Medicaid expansions, how Accountable Care Organizations will form, and how entitlement programs will change at the federal level due to sequestration. How these issues are decided will have ramifications on patient growth and the health center payer mix, making it important for health centers to update their financial projections to reflect the latest situation in their state. 

How can health centers prepare to respond to the variety of possible outcomes?  Don’t just leave your current system in place and wait for the debate to be settled! Create a contingency plan with a range of financial feasibility scenarios to help your health center envision how your operating statement will be impacted in the face of change.  Contingency planning will help your health center proactively address whether any changes on the horizon may require your health center to modify its growth plans based on changes to payer mix and patient growth.  Our Fall 2012 Capital Ink newsletter includes some ways to modify your financial projections based on the move towards including community health centers as Accountable Care Organizations, the shift to global payments, and changes to Medicaid. Access it at http://www.caplink.org/resources/newsletters.

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