Healthcare and Revenue Cycles
When it comes to the revenue cycle and receivables management, a healthcare organization faces unique challenges. These challenges include the fact that many clients (patients) cannot afford the care they are there to receive because of the extremely high cost of healthcare. Thus, they are either covered completely by insurance, covered partially, covered by the state (Medicaid or Medicare), or are self-payers or indigent patients (cannot pay at all and rely on financial assistance from the organization). The facility cannot deny care to patients so must be able to balance providing quality care with the need to maintain a functioning, financially stable facility (the facility after all does have its own costs). For that reason, a healthcare facility must seek to prevent denials of claims while effecting a clear and apparent process of billing for patients. Revenue cycle management must also be efficient so that billings do not pile up and cause the facility to be underfunded. Collections, whether through individuals or through insurance companies, are a major part of operating a healthcare organization. Handling these claims, making sure payment is processed and revenue is established is essential to any business but in healthcare the process can go on for years because it begins at the time that a patient sets an appointment and goes until the day the patient's account balance has been paid in full. The fact that this process can go for so...
Without proper management of the revenue cycle, a healthcare facility could be completely wiped out.
2. Just-in-time (JIT) inventory systems can be used by healthcare providers, but they have their own advantages and disadvantages. While a perfect JIT system should not have any stock, in the healthcare world it is impossible to employ such a stockless system -- yet a healthcare firm can use a JIT system that does have a limited amount of
stock in inventory. The great advantage of course is that the JIT system lowers a facility's costs (keeping stock can drain resources and
space rather quickly as well as worker energy -- after all, someone has to move stock, store it, maintain it, etc.). The downside to the JIT system in a
healthcare setting is that there is a service fee which distributors tack on for those using JIT; there is also the
risk of running out of stock in something that is needed for a patient -- a major faux-pa for a clinic; lastly, JIT can cause facilities to become wholly dependent on one supplier, who could gradually raise the costs and make JIT no longer valuable in terms of savings. Suppliers are not…
