There are some peculiar issues for healthcare organizations when it comes to the
ID: 2634605 • Letter: T
Question
There are some peculiar issues for healthcare organizations when it comes to the revenue cycle and receivables management. What are they, and why are they important?Just-in-time inventory systems are relatively new and used to reduce costs. Can they be used by healthcare providers? In a healthcare setting, what are the advantages and disadvantages?
There are some peculiar issues for healthcare organizations when it comes to the revenue cycle and receivables management. What are they, and why are they important?
Just-in-time inventory systems are relatively new and used to reduce costs. Can they be used by healthcare providers? In a healthcare setting, what are the advantages and disadvantages?
Just-in-time inventory systems are relatively new and used to reduce costs. Can they be used by healthcare providers? In a healthcare setting, what are the advantages and disadvantages?
Explanation / Answer
Health care revenue cycle is defined as "All administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue."
It includes the entire life of a patient account from creation to payment. Revenue cycle processes flow into and affect one another. When processes are executed correctly, the cycle performs predictably. However, problems early in the cycle can have significant ripple effects. The further an error travels through the revenue cycle, the more costly revenue recovery becomes.
Revenue cycle is important because if proper care is not taken it can result in lost revenue.
Revenue leakage is a serious issue that many hospitals, labs, and pathology groups face. Patients come in, services are performed, and bills and claims are sent out. However, for any number of reasons, the full revenue isn't collected. Revenue leakage is common, but often unnoticed, because it's not easily found in financial statements or accounting software. There aren't many clear metrics that define how much revenue is being lost. In-house billing staff are often too busy performing multiple functions to identify and calculate missing revenue. Hence revenue cycle and receivables management are very important in healthcare organizations.
2) JIT is applicable to operations that are repetitive have reasonably high volume and deal with tangible items such as mails,
checks, bills or letters. Many healthcare operations such as administering medications take place frequently but are not repetitive.Other operations however do meet thesecriteria. The JIT elements that can be applied in health care operations include the following.