Hello all,
One of our primary responsibilities as a Business Manager is to monitor and report on the financial health of our organizations. Given that many of our facilities are ceasing to perform screening and other non-urgent imaging a group's cash flows could be seriously eroded. Some practices are reporting a 30% to 40% loss of volume.
Business managers should be modeling the near and mid-term impact these volume decreases have on cash flows at least through the end of the year. My guess is that most community-based groups and physician owned imaging centers likely don't retain a high level of cash reserves, which means they are exposed to sudden cash flow interruptions (most pay out quarterly dividends and retain only a small amount of cash). Depending upon how long this goes on, groups and imaging centers could find themselves in a position where revenues no longer support their historical expenses (i.e., drop into a negative cash flow situation). This may be unavoidable, but by understanding the impact it gives you the opportunity to take proactive steps to mitigate the problem (e.g., retaining available cash instead of paying out quarterly dividends or developing a line of credit at the bank).
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Michael Bohl FRBMA
Strategic Advisor
Radiology Group, PC, SC
Bettendorf IA
(563) 484-0488
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