Net Patient Revenue Research Articles

Effective Hospital Revenue Cycle Management: Is There a Trade-off Between the Amount of Patient Revenue and the Speed of Revenue Collection?

Effective hospital revenue cycle management practices have gained in importance in today's hospital business environment, in which many hospitals are confronted with stricter regulations and billing requirements, more thorough preauthorization and precertification, underpayments, and greater delays in payments. In this article, we provide a brief description of current hospital revenue cycle management practices. Next, we suggest measures of the financial benefits of revenue cycle management in terms of increases in the amount and speed of patient revenue collection. We consider whether there is a trade-off between the amount of patient revenue a hospital earns and the speed with which revenue is collected. Using financial statement data from California hospitals for 2004 to 2006, we test empirically the relationships among key financial measures of effective hospital revenue cycle management. We find that hospitals with higher speeds of revenue collection tend to record higher amounts of net patient revenue per adjusted discharge, lower contractual allowances, and lower bad debts. Charity care provision, on the other hand, tends to be higher among hospitals with higher speeds of revenue collection. We conclude that there is no evidence of a trade-off between the amount of patient revenue and the speed of revenue collection but that these financial benefits of effective hospital revenue cycle management often go hand in hand. We thus provide early indication that these outcomes are complementary, suggesting that effective hospital revenue cycle management achieves multiple positive results.

Variations in Financial Performance Among Peer Groups of Critical Access Hospitals

Among the large number of hospitals with critical access hospital (CAH) designation, there is substantial variation in facility revenue as well as the number and types of services provided. If these variations have material effects on financial indicators, then performance comparisons among all CAHs are problematic. To investigate whether indicators of financial performance and condition systematically vary among peer groups of CAHs. Suggestions from CAH administrators, a literature review, expert panel advice, and statistical analysis were used to create peer groups based on whether a CAH: (1) had less than $5 million, $5-10 million, or over $10 million in net patient revenue; (2) was owned by a government entity; (3) provided long-term care; and (4) operated a provider-based Rural Health Clinic. Significant differences in financial performance and condition exist among CAH peer groups. CAHs should ensure that they use appropriate peer comparators when assessing their financial performance and condition. If quality, outcome, safety and access are affected by financial performance and condition, it may also be important for research in these areas to control for peer group differences among CAHs.

To outsource or not to outsource

Outsourcing of information technology (IT) functions is a popular strategy with both potential benefits and risks for hospitals. Anecdotal evidence, based on case studies, suggests that outsourcing may be associated with significant cost savings. However, no generalizable evidence exists to support such assertions. This study examines whether outsourcing IT functions is related to improved financial performance in hospitals. Primary survey data on IT outsourcing behavior were combined with secondary data on hospital financial performance. Regression analyses examined the relationship between outsourcing and various measures of financial performance while controlling for bed size, average patient acuity, geographic location, and overall IT adoption. Complete data from a total of 83 Florida hospitals were available for analyses. Findings suggest that the decision to outsource IT functions is not related to any of the hospital financial performance measures that were examined. Specifically, outsourcing of IT functions did not correlate with net inpatient revenue, net patient revenue, hospital expenses, total expenses, cash flow ratio, operating margin, or total margin. In most cases, IT outsourcing is not necessarily a cost-lowering strategy, but instead, a cost-neutral manner in which to accomplish an organizational strategy.

Profitability of Medical Procedures without the Use of Transfusion Support.

A growing number of hospitals worldwide are developing programs in Bloodless Medicine and Surgery. Initially, these programs were created with the goal of providing healthcare for those patients who refused blood products based on religious convictions. With increasing public concern over blood safety, blood shortages and the need to reduce health care costs, alternatives to transfusion are now being considered as a goal for all patients. Healthcare providers have been concerned that eliminating or reducing transfusions would not only lead to increased morbidity and mortality, but it would also lead to higher costs associated with the use of alternatives such as epoietin, IV iron and cell salvage techniques. The Center for Bloodless Medicine and Surgery (CBMS) at Pennsylvania Hospital (PAH) provides transfusion free care including high-risk procedures such as cardiac, urologic and orthopedic surgeries to approximately 1,200 patients per year. In a 6-year period, approximately 6,000 Jehovah Witness (JW) patients were treated with only 2 mortalities attributed to hematological complications. In addition to this success, the program appears to be cost efficient, which justifies growth for the future. A sample of 262 patients was taken over a 6-month period and compared to the general hospital population that underwent the same procedures outside of the Bloodless Center. The patient population represented a fairly even distribution of 25 medical service lines, which, in turn, represented approximately 18 Diagnosis-Related Groups (DRGs) for use in comparison. The DRGs were isolated and compared to the equivalent procedures done at PAH in patients that were transfused without restrictions. Contribution margin on a per-case basis was selected as a measure of profitability; this is the amount of revenue that remains after deducting the direct costs of procedure(s). The calculation for contribution margin (CM) is derived using the following algorithm: CM = Net Patient Revenue (NPR) minus total direct expenses (fixed, labor, and supplies). Results of this study indicate that, overall, the CM for a CBMS patient is profitable, in fact, 16% more profitable than the general hospital population. Furthermore, the Net Margin—total revenue less all expenses—on a per-patient basis was 17% more favorable as well. The collective CBMS population illustrates that the service is financially valuable to the Hospital, and provides direction for further investigation to capitalize on strengths and address areas of opportunity. Having a Center for Bloodless Medicine and Surgery specifically attracts a previously unseen population of patients to PAH. Therefore, all profit from the CBMS population, regardless of its magnitude can be considered as an incremental gain to the Hospital's net margin. By creating and successfully running this program in today's increasingly competitive healthcare environment, the CEO has strategically placed PAH in the forefront of modern health care. Development of centers that have expertise in transfusion alternatives may expand as the public demands increased safety standards and hospital administrators seek financially gainful opportunities.

Networks and the fiscal performance of rural hospitals in Oklahoma: are they associated?

This paper uses regression analysis to explore the relation of network membership to the financial performance of rural hospitals in Oklahoma during fiscal year 1995. After adjusting for the scope of service, as measured by the number of facilities or services offered by the hospital, indicators of fiscal status are (1) the cash receipts derived from net patient revenue; (2) the cash disbursements related to operating costs, net of interest and depreciation expense, labor costs and nonlabor costs; and (3) net cash flow, defined as the difference between cash receipts and disbursements. Controlling for the effects of the hospital's structural attributes, operating characteristics and market conditions, the results indicate that members of a network reported lower net operating costs, labor costs and nonlabor expenses per service than nonmembers. Hence, the analysis seems to suggest that the membership of rural hospitals in a network is associated with lower cash disbursements and an improved net cash flow, outcomes that may preserve their fiscal viability and the access of the population at risk to service.

Operating performance and financial constraints of Catholic community hospitals, 1986—1989

This study documents many factors associated with differential operating performance of a sample of 235 Catholic community hospitals in the time period of 1986-89. A comparison of these hospitals indicates that a panel of 78 facilities with relatively high returns on net patient revenue made significantly higher proportional investments in medical technology, equipment, and facilities compared to a panel of 78 low return hospitals, and were larger in size measured in many different ways.

Net patient revenue at university-owned teaching hospitals, 1982.

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Net patient revenue at university-owned teaching hospitals, 1981.

Log in or Register Subscribe to journalSubscribe Get new issue alertsGet alerts Enter your Email address: Wolters Kluwer Health may email you for journal alerts and information, but is committed to maintaining your privacy and will not share your personal information without your express consent. For more information, please refer to our Privacy Policy. Subscribe to eTOC Secondary Logo Journal Logo All Articles Images Videos Podcasts Blogs Advanced Search Toggle navigation Subscribe Register Login Articles & Issues Current IssuePrevious IssuesPublished Ahead-of-Print Collections Editorials of Laura Weiss Roberts, MD, MAAM Last PageCOVID-19 and Medical EducationAddressing Race and Racism in Medical EducationeBooksView All For Authors Submit a ManuscriptInformation for AuthorsLanguage Editing ServicesAuthor Permissions Journal Info About the JournalAbout the AAMCJournal MastheadSubmit a ManuscriptAdvertising InformationSubscription ServicesReprints and Back IssuesClassified AdsRights and PermissionsFor ReviewersFor MediaFor Trainees All Articles Images Videos Podcasts Blogs Advanced Search

Net patient revenue at university-owned teaching hospitals.

Log in or Register Subscribe to journalSubscribe Get new issue alertsGet alerts Enter your Email address: Wolters Kluwer Health may email you for journal alerts and information, but is committed to maintaining your privacy and will not share your personal information without your express consent. For more information, please refer to our Privacy Policy. Subscribe to eTOC Secondary Logo Journal Logo All Articles Images Videos Podcasts Blogs Advanced Search Toggle navigation Subscribe Register Login Articles & Issues Current IssuePrevious IssuesPublished Ahead-of-Print Collections Editorials of Laura Weiss Roberts, MD, MAAM Last PageCOVID-19 and Medical EducationAddressing Race and Racism in Medical EducationeBooksView All For Authors Submit a ManuscriptInformation for AuthorsLanguage Editing ServicesAuthor Permissions Journal Info About the JournalAbout the AAMCJournal MastheadSubmit a ManuscriptAdvertising InformationSubscription ServicesReprints and Back IssuesClassified AdsRights and PermissionsFor ReviewersFor MediaFor Trainees All Articles Images Videos Podcasts Blogs Advanced Search