The Link Between Patient Revenue Cycle Management

The largest health care organization in the United States are hospitals. For-profit is an organization that operates to make a profit while a non- profit organization makes no profit. Charities and organizations reported that, 62% of the U.S. hospitals in 2003 are non-profit. Non-profit hospitals gain tax-exempt by meeting the state and federal guidelines provided, while for-profit doesn’t get these tax. The non-profit hospitals serve as charitable purpose for the community and are sometimes larger than the for-profit hospitals. Private hospitals may either be classified as non-profit or for-profit institutions.

In 2012, the ACA found an excessive amount of readmissions of patients that were hospitalized within 30 days for the same medical conditions. This factor viewed under the ACA as a quality issue and CMS implemented value-based incentive payments based on performance in a set of quality measures. The plan is to implement a pay for performance (P4P) in formulas used by Medicare to reimbursement providers. “The objective is to link reimbursement to quality and efficiency as an incentive to improve the quality of health care, as well as reduce system-wide costs” (Shi and Singh, 2015). In addition to the P4P, nonprofit hospitals also focus on continual improvement, data and cost containment throughout the organization (Adamopoulos,

The revenue cycle represent the flow of cash from the beginning to end and source. For any business large or small, public or private the revenue cycle is critical. In a hospital setting the revenue cycle begins at the time the patient first presents for treatment and is registered as a patient. This is “depicted within the text in Figure 2-1 as six stages- provide services, document services, establish charge, prepare claim/bill, submit claim and receive payment” (Cleverley, Cleverley, & Song, 2012, p. 14). Accuracy of information entered is paramount because the record created starts is the foundation for all future billing. If the wrong insurance information is documented time is lost on the back end of the cycle contacting the patient to update their

In 1997 University of California, San Francisco (UCSF) merged its two public hospitals with Stanford’s two private hospitals. The two separate entities merged together to create a not-for-profit organization titled UCSF Stanford Health Care. The merger between the health systems at UCSF and Stanford seemed like a good idea due to the similar missions, proximity of institutions, increased financial pressure with cutbacks in Medicare reimbursements followed by a dramatic increase in managed care organizations. The first year UCSF Stanford Health Care produced a profit of $22 million, however three years later the health system had lost a total of $176 million (“UCSF-Stanford Merger,” n.d.). The first part of this paper will address reasons

As discussed previously, the Affordable Care Act of 2010 passed by the legislature, drastically changed the entire healthcare economy. In fact, ever since the ACA was passed it was required by law for hospitals to increase the amount of attention given to the individuals of the community in order to meet their needs. Also, the ACA allowed close to 10 million individuals to have health insurance through Medicaid and private health insurances, which has a high impact on all the hospitals, such as Yale New Haven. For example, since millions of Americans can now afford health insurance, there is a large influx of patients who can go to hospitals and actually afford the overall cost. The non-profit hospital of Yale New Haven is benefiting in two ways. First, they are achieving their mission by caring for the individuals of their community who now have insurance and secondly, they are being compensated in terms of revenue to improve their organization in regards to hiring the greatest physicians and having the best technology and supplies to treat their large influx of patients (Cunningham, 2015). The rise in health insurances increases the total amount of money earned by that non-profit organization and the amount of patients receiving great quality of care.

The debate over non-profit versus for-profit healthcare organization has been ongoing, does one provide better care than the other? Do the operations of for profit perform better than the non-profit organizations? Are the criticisms about for-profit organization validated and is there proof? The goal is to examine those questions as well as offer options to improve the financial and operational performance of non-profit and for-profit organizations criticisms.

Florida Hospital is a non-profit hospital, which means the money goes back into patient care. Florida Hospital includes the human aspects in all levels of their organization. They are committed “to improving the quality of life of their patients, family, friends and neighbors to guide them in everything they do. Not just in “Central Florida, but around the globe as well” (Florida Hospital,2016). President/CEO Florida Hospital Lars Houmann said “through our many programs and services, Florida Hospital takes that seed and helps it blossom. We’ve done this through an investment of more than $1.8 billion in our community. Our branches reach far beyond our eight-campus facility and deep into the roots of Central Florida, where every day we cultivate hope and healing. With our collaboration and support, we’ve helped nurture our community in ways that impact the health and happiness of our friends and neighbors” (Florida Hospital cares community benefit report, 2016). Florida Hospital depicts an example of human resource perspective of management through their employee programs, as well as through their community partnerships and outreach.

The debate on whether all healthcare institution should be non-profit rises many issues and they have been heavily debated. The best way to examine this to analyze if non-profit hospitals are in fact better that for

The difference between for-profit and non-profit hospital has been debated for a long time. The established of the two differentiates institutions of health has also had controversial twists concerning their societal role. For-profit hospitals are said to be after money more than service delivery, while non -profit are not. Both hospitals use their market power in a similar way that it is sometimes hard to differentiate their behavioral characteristics. From research, it has shown that knowing the differences is relevant.

The intention of this research paper is to further understand the financial statement of four distinct hospitals located in the San Diego, California County. An analysis of the financial report for Sharp HealthCare, Scripps Health, Tri-City HealthCare, and Palomar Health will be briefly discussed individually on each important financial outcome’s Such as: assets, liabilities, revenue, expenses, hospital debt, and investments. To analyze further, a break down between the hospitals assets, liabilities, and revenue will be compared in the paper.

For several decades health care has been tied to the economy and with the current downturn we see continued efforts to control and reduce over-head costs. Health care organizations in their effort to become more efficient and address changes in the industry have altered their strategic business plans. Lee & Alexander (1999) researched organizational change in hospitals and their survival, in this paper I hope to discuss their findings and add other examples to validate their conclusions.

Though they are not entirely comprehensive tools, a great deal can be learned about a hospital or other healthcare organization for-profit or not-for-profit from an examination of their annual financial documents (Finkler & Ward, 2006). The balance sheet and statement of revenue and expense can both yield valuable clues even in the absence of other evidence about changes that might be occurring in the organization, a definition of the type and degree of certain problems that it might be facing, and potential opportunities for improvement in performance that might exist (Finkler & Ward, 2006). Comparing two or more years' worth of financial information yields even more valuable insights, tracking movement in the hospital or other organization's ability to finance its activities and thus continue providing services at the same level, quantity, and scope as current operation.

Balancing profit with serving patients and providing charity care. “Nurses are a scarce resource. So is cash. Healthcare organizations must balance the books to keep their doors open ― ‘No margin, no mission,’” said Nancy Berlinger, Ph.D., M.Div., deputy director and research scholar at The Hastings Center, a national nonpartisan bioethics

“Hospitals can be non-profit, for-profit, and government-owned and/or operated” (Baker & Baker, 2006). There are different terms for each classification in how to report and handle the finances but the basics are the same for any type of business. Business finances require the following basic fundamentals: creating “budgets, understanding capital expenditure, loan acquisition, and financial fees” (Baker & Baker, 2006). Government owned and operated hospitals offer unprofitable services; which

The hospital industry consist of privately and publicly owned and operated hospitals and medical facilities. The financial backgrounds of these assorted categories of organizations are sizeable and contrasted. Therefore, industry ratios are to be considered and evaluated from a greater proportion in order to identify with the financial data involving the industry as a whole (Dunn & Becker, 2013). Based on analysis and evaluation of the financial ratios gained from Nasdaq and Google Finance, it is apparent that the hospital industry is gradually rising and supports increase in profitability. These ratios are divided into several categories: Growth rates, financial strength, valuation, profitability, efficiency, dividends, and management effectiveness.