January is a tough time for independent medical practices for several reasons:
In private practices, the physicians typically don’t carry over any cash from year to year, so the practice starts in January from a cash position of zero.
Most deductibles begin in January – if practices don’t collect deductibles at time of service, they find themselves hurting because their revenue goes way down.
The Medicare debacle every year creates improper (lower) reimbursement as Congress struggles to the last possible minute over physician payments. (Here’s a simple yet helpful exercise for Congress. Congress, close your eyes and think of your favorite Medicare-age person. Is it you, your wife, your mother, your father, your neighbor or best friend? Now think of that person not being able to see a doctor when they need to because all doctors have opted out of Medicare and the only place they can get care is the local Emergency Room. It is a very ugly picture. What other profession is MADE to accept payment that is less than it costs to provide? Who do you love, Congress, who won’t be able to get care?)
Many annual maintenance contracts come due in January
Deals on large purchases are good (think EMRs) as vendors try to book revenue in the current year. Practices tend to make commitments to purchases now that will have to be paid for in the new year