When searching for a career, many options exist. For instance, if you’re a numbers person, you may want to become an accountant. Or maybe you want to spend your days helping people feel better mentally or physically. In this case, a role in healthcare could be more appealing to you.
But what if you like the idea of doing both? What if you love the idea of working with numbers while contributing to an organization that helps people? In this case, healthcare accounting may be a perfect career for you.
What is Healthcare Accounting?
Healthcare as an industry involves preventing and treating disease and injury. Its ultimate goal is to help patients live as long and as healthy lives as possible. For companies within it to run smoothly, they have to follow a budget.
This means that they have to know how much money is coming in and how much is going out. This ensures that there is enough cash to run the facility. It also means that they're able to pay staff, order supplies, tend to patients, and more.
Healthcare businesses must also follow rules for tax and auditing purposes. These rules are often complex. So, they need someone with advanced knowledge in this area to know how to work within them.
Individuals trained in healthcare accounting handle both of these duties. This helps the company's leaders make better decisions for the agency or organization. Sometimes these decisions involve its day-to-day operations. Other times they are necessary for planning future services and programs.
Ultimately, these decisions impact the people these facilities serve. In this way, serving as an accountant makes you an important piece of the healthcare puzzle.
The Value of the Healthcare Accounting Role
Imagine that you're creating a budget at home. How well could you create that budget if you don't know how much income is coming in or which bills need to be paid out?
Additionally, how well do you think you'd manage emergencies, like if you got into an accident and needed a new car? An event like this could sink you if you weren't prepared.
Healthcare facilities like hospitals and doctor's offices can run into the same issues. That's why they need someone to keep track of incoming monies versus bills that are paid out. This helps them stay in business so they can continue to help the people who rely on them for better health.
How is accounting in healthcare different from accounting in other fields?
Accounting in Healthcare vs Accounting in General
One difference is that you may have access to patients’ private medical information, which includes their physical or mental conditions and the type of care they receive. This would require that you adhere to HIPAA regulations.
HIPAA stands for the Health Insurance Portability and Accountability Act. The HIPAA Journal explains that this act does two things. One, it ensures that people between jobs are able to keep their healthcare coverage. Two, it keeps patients’ health information secure and confidential.
Confidentiality prevents healthcare staff from sharing someone’s diagnoses, treatments, and medical history. It also involves taking steps to protect this data when sending it to other agencies. These other agencies might include other healthcare professionals and specialists. Or it could be an insurance provider or a pharmacy.
For this reason, healthcare accountants should know how to work within these HIPAA compliant systems if providing services related to billing or submitting claims as these types of documents often contain confidential information.
Who Employs Healthcare Accounting Employees?
In 2018, there were 1.7 million bookkeepers, accountants, and auditing clerks according to the Bureau of Labor Statistics (BLS). The BLS adds that healthcare and social assistance agencies employ approximately 7% of workers in these roles.
Healthcare institutions that might hire an accounting professional include:
- Urgent care centers
- Medical clinics
- Private physician offices
- Physician groups
- Surgery centers
- Behavioral health facilities
- Home healthcare providers
- Imaging and diagnostics centers
A Day in the Life of Healthcare Accounting
A good way to decide whether you want to work in accounting in healthcare is to look at what a typical day looks like.
For starters, healthcare accountants and accounting clerks and bookkeepers work in an office setting. For some, this office is located within the healthcare facility itself. For others, it means working in an accounting firm that offers services to healthcare businesses.
If you’re acting as a healthcare accountant or certified public accountant (CPA), your day will likely include performing tasks such as auditing financial statements, preparing tax forms, and offering advice as to how the company can operate more efficiently.
- Recording, maintaining, and reporting patient payments
- Reviewing medical insurance claims for accuracy
- Reviewing bills due for accuracy
- Recording and maintaining payroll records
- Preparing required reports for tax and auditing purposes
As a healthcare accounting clerk, you may also be responsible for additional duties. These include collecting payments, keeping staff files, and interacting with patients and other agencies.
Typically, healthcare accountants work hours are consistent with general business hours. This means that your work day will likely start between 7:00 and 9:00 am and end between 3:00 and 6:00 pm. However, certain times of year may require longer days, such as at tax time or when audits are being conducted.
Educational Requirements for Healthcare Accounting Roles
To work as an accountant or auditor, the BLS indicates that you must typically have a bachelor’s degree and, in some cases, take additional steps to become certified.
The BLS further shares that, to work as a healthcare accounting bookkeeper or clerk generally only requires a high school diploma. Though, it isn’t uncommon for many agencies to require that you have some college-level courses. These courses provide the necessary training and education in areas such as:
- Computer skills
- Bookkeeping software
The BLS goes on to say that a moderate amount of on-the-job training is also typically required in an entry-level accounting role.
Healthcare Accounting Salary Potential
How much money does someone providing accounting services within healthcare facilities make? As of 2018, the median annual pay for accounting bookkeepers and clerks is roughly $40,240 per year according to data collected by the BLS. This equates to approximately $19.35 per hour.
Comparatively speaking, the BLS states that the average pay for all workers combined is around $38,640. In other words, people who choose to work as healthcare accountants often make slightly more than average.
It should also be noted that there are a number of factors that affect your true salary potential in this field. One is your level of education and experience.
Even the area where you work geographically matters. For example, healthcare accounting clerks and bookkeepers in the District of Columbia, Alaska, and Connecticut often earn between $47,890 and $54,970 according to the BLS. This is a median hourly rate between $23.02 and $26.43. It also further highlights how factors such as this can impact your true earning potential.
Additionally, if you pursue additional schooling and earn your bachelor’s or master’s degree in accounting and/or become a CPA, the BLS states that the median annual pay is roughly $70,500 per year, or $33.89 per hour.
The Future of Accounting in Healthcare
The Association of Accountants and Financial Professionals in Business says that the role of the healthcare accountant “is evolving.” Specifically, one of the changes this field will probably see in the years ahead is stronger internal controls. This will help better manage risks. Another evolution that is expected is more focus on analytics and performance metrics.
Therefore, those choosing to work in healthcare accounting services need to learn how to use these enhanced controls. They must also learn the steps necessary to better collect and analyze the healthcare facility’s performance data.
Healthcare businesses are also changing to become more customer-focused according to PwC. This involves, in part, ensuring that patients have greater access to quality, affordable care. This type of customer-first approach will impact the healthcare accountant's role.
More services will be developed with the patients’ wants and needs in mind. This likely means new expense categories will need to be created. It might also involve making changes in current financial appropriations.
Ready to Start Your Healthcare Accounting Education?
If providing accounting services within the healthcare field sounds like a career that you’d enjoy, Ultimate Medical Academy now offers a Healthcare Accounting Associate Degree program designed to give you the education and tools you need to pursue entry-level accounting clerk or bookkeeper positions
Contact us today to learn more about the Healthcare Accounting program or, if you’re ready to begin, enroll now. Your future in healthcare and accounting awaits.
Disclaimer: While UMA's Healthcare Accounting program does not prepare students to become certified public accountants or to take the Certified Public Accountant exam, but to work in the field as a healthcare accounting clerk or bookkeeper, we are committed to providing our readers all of the information necessary to make an informed decision regarding their future in healthcare accounting. To learn more about how we can help you or the programs we have to offer, contact us today!