Swirling Winds in the Spa,
Health, and Wellness Cosmos 1. What is Escheat and why is this important and relevant to spa owners all of a sudden? Escheat is a legal right that all states possess allowing them to take possession of unclaimed property until the rightful owner can be located. With our state governments looking for money anywhere they can find it, there is
activity brewing in the New Jersey and New York state legislatures to have un-redeemed gift certificates classified as unclaimed property. This would make unredeemed expired gift certificates as defined by state law, eligible to be claimed by the state under the power of escheat. Realistically, in my many years as a financial consultant, I have only seen one business that had set up a savings account that held all of their unredeemed gift certificates.
In their vast wisdom, I'm sure the state legislators expect that every one of you has these unredeemed gift certificates waiting patiently in an unused bank account and all they have to do is contact you, get an accounting and ask you for a check. No, I don't think it is a good idea to go getting all indignant and start writing your congressman. This might classify you as what I would call a "target" or "example". I don't think you want to be the first on your block to be the proud owner of an audit.
Some I've spoken with are arguing that their gift certificates don't expire and hence don't need to be classified as unclaimed property. Whenever the client wants to redeem them, you will provide the service. Another is to have the certificate sold for a service, not an amount. However it is handled, it must be clearly disclosed on the face of the gift certificate or card. Bear in mind that each state has different laws pertaining to Gift Certificates and Gift Cards, and some of these laws are different than the federal laws. Be aware and prepared, talk to your friends in the spa community and make them aware as well.
I would venture a guess that it with state staffing levels, and the lack of results they are likely to experience, the states probably do not have the ability to mount a meaningful collection effort. My buddies at SpaBoom are the real gurus about this. You may want to check their website for more information.
2. Why is the business of medicine so screwed up? 50:50 inefficiency:insurance. I am of the belief that it is as much inefficiency as it is the fact that service pricing is controlled by what the insurance companies are willing to pay. It drives me nuts that I hear about how tough it is for medical practices to be profitable. Then in the same meeting, I look at their Accounts Receivable Aging Report and see that they are carrying balances that are older than six months old.
How many of us can afford to bill for our services, receive only 50-70% of the selling price and have to wait 6 - 12 months to get paid? Welcome to private medicine. Insurance companies pay for procedures, not information. This is part of the reason primary medicine is suffering and disappearing. Some of this is the system of
insurance billing, but part of it is the inefficiencies within the office. Without a defined procedure for gathering patient information at the time of the initial visit, the unpaid amounts on those aging reports are bound to get bigger and bigger. Unless we are diligent about collecting data on which insurance company to bill and how much to collect from the patient as a co-pay before they leave the office, we cannot get a handle on receivables.
We could fix this by taking primary care (family doctors) out of the mix of basic health insurance. How many of us would be willing to pay these primary care doctors a monthly fee if it included regular physicals, basic lab testing, cardio health evaluation, acupuncture, holistic health, nutrition counseling, body movement/pain relief and stress reduction sessions? Heck, we're already paying for basic health insurance and it is only covering 80% of what we're charged. Did you know that annually, 75% of the health care costs paid by insurance companies are going to 5% of the policy holders? That means the rest of us are not even using 25% of the total money paid in.
I think we need to re-think health insurance to pay into a pool that provides us urgent care, disease treatment, and hospitalization. Yes, it will probably be higher deductible and more expensive but it will insure us for what we need. Mix in some spa and lifestyle counseling and we can reduce the cost of health care. Preventive health care, what a concept! Sounds like a fusion of day spa and primary medicine may be in our future.
So, both of these timely issues are in need your attention. As always, if you want to talk, contact us. The first conversation is always free. |
