What is a potential risk of a poor payer mix?

A poor payer mix refers to the distribution of different types of payers, such as commercial insurance, Medicare, Medicaid, or self-pay patients. When a healthcare provider has a predominance of patients with lower reimbursement rates, such as those covered by Medicaid or uninsured patients, the overall revenue can be adversely affected.

Heightened financial instability is the correct choice because a poor payer mix can lead to reduced overall revenue, increased debt, and difficulties in meeting operational costs. Providers reliant on a steady stream of higher reimbursements from commercially insured patients may find it challenging to maintain financial health when faced with a more significant portion of patients that yield lower reimbursement rates. This instability can manifest in various ways, including delayed payments, inability to invest in new services, and difficulties in hiring qualified staff, all of which can compromise patient care and the sustainability of the practice.

In contrast, an increased number of patient visits might not alleviate financial problems if those visits are predominantly from patients with low reimbursement rates. Improved financial stability and cash flow are usually outcomes of a balanced and favorable payer mix, where the revenues from higher-paying payers can offset costs and ensure a steady cash flow.