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Revenue Management of Catheter-Related Issues Essay

The main task of any healthcare organization is the fulfillment of patient needs through the provision of high-quality service at minimum cost. Revenue management practices, including financial regulations and billing requirements, help hospitals to stimulate social-economic development. Since revenues serve as the primary stimulus for the organizational growth and sustainability, the opportunity to increase profits and achieve greater cost efficiency motivates healthcare administrators to seek more effective ways for the performance improvement. Hospital revenue cycle management (RCM) is an effective methodology that allows organizations to remain profitable and, in this way, contribute to the economic development of the society, create and augment social wealth and improve social well-being. Revenue Management of Catheter-Related Issues Essay

Considering the fact that financial indicators characterize the effectiveness of organizational performance, it is argued that the analysis of hospital financial results is one of the important aspects of revenue management. The aim of this paper is the investigation of the main principles of hospital revenue management and evaluation of the factors which influence the generation of revenues at hospitals. It is argued that RCM systems allow the identification of the major sources of income and facilitate the achievement of greater efficiency in the allocation and use of resources. The findings may be applied to balance additional costs which emerge due to catheter-associated infections (CAI). Since nowadays the U.S. national insurance services no longer cover the costs of caring for patients who develop CAI during hospitalization (Kennedy, Greene, & Saint, 2013), the issues of outstanding bills and cost inefficiency remain critical. Revenue Management of Catheter-Related Issues Essay

Costs Associated with Foley Catheter Use

CAIs are considered one of the most common healthcare problems. Over a million CAIs are reported per year, and each case is associated with an average additional cost of over $670 (Meddings, Krein, Fakih, Olmsted, & Saint, 2013). Nowadays, the enormous amounts of additional costs become a burden for many healthcare organizations because, since 2008, Medicaid and Medicare do not provide hospitals with reimbursements for catheter-related complications (Kennedy et al., 2013). Without public health insurance coverage, many patients suffering from CAI fail to pay their medical bills and, as a result, the number of outstanding revenues grows. Revenue Management of Catheter-Related Issues Essay

One of the main hospital RCM activities is the identification of potential sources of profit and loss, as well as the creation of an appropriate balance between them. RCM may help hospitals to minimize losses due to CAI through the estimation of costs per CAI prevention procedure and costs per intervention of catheter-related complications. The comprehensive analysis of financial costs is directly linked to the increased efficiency in organizational decision-making, revenue increase, reduction of patient health risks, and the improvement of the overall quality of care. The implementation of RCM analytical tools will help hospitals to implement professional strategies and treatment models that may lead to the reduction of costs and the elimination of such finance-intensive problems as catheter-associated complications.Revenue Management of Catheter-Related Issues Essay

RCM and Revenue Generation

Rauscher and Wheeler (2008) define hospital RCM as a complex of practices an organization designs and performs to maximize patient revenue and the speed of its collection. Traditionally, a revenue cycle consists of three main types of activities: front-end tasks (patient registration), core tasks (service provision and coding), and back-end tasks (billing, claims preparation, denials management, and cash collection) (Rauscher & Wheeler, 2008). Since provision of services to patients is the main source of revenue, the manner of billing negotiation at every stage of RCM is essential to hospitals’ ability to maximize the amount of patient revenue and speed of revenue collection. For example, the researchers claim that provision of information to patients during registration regarding the amount they are expected to pay and educating them about the potential ways to minimize insurance limitations may favorably impact the reduction of outstanding bills and increase in revenue collection speed (Rauscher & Wheeler, 2008). Revenue Management of Catheter-Related Issues Essay