Question

What is the Revenue Cycle, as part of your explanation detail how it functions in your organization?

Why is this such a important subject for managers in health care organizations to understand?

Answer 1

A revenue cycle is the cycle of financial activities from collection of cash from customers to payment to the suppliers or creditors for purchase of goods. It is important to analyse the revenue cycle to ascertain the liquidity needs of the company, determine the credit periods to be given to debtors, cash management and providing for uncertainities.

Revenue cycle is an important cycle for managers in health care system since it covers the activities from admission of a patient, to providing treatment , collection of medical insurance and claims to final payment made by the patients. It enables in easier tracking of patients admitted in the hospital, the claims processed and final payments made to the hospital. It assists in better financial management and patient tracking.