7 Risks of Not Integrating Supply Chain and Revenue Cycle

Supplies represent roughly 15 percent of a median hospital operating budget, second only to labor, and linking the supply chain with the revenue cycle could boost a hospital's revenue flow and strategic decision-making, according to a whitepaper from Craneware.

The whitepaper, which also was a product of the Health Sector Supply Chain Research Consortium and Arizona State University, said that supply chain management and revenue cycle management integration is a "linked collaboration between the two functions so actual costs are utilized in market pricing decisions and [so] strategic managed care contracting is coordinated with supply chain managers."


For hospitals and health systems that don't synchronize the two processes, there are some inherent risks, according to the paper.

1. Decreased and inaccurate reimbursements.

2. Hindered contract negotiations and decreased contract compliance.

3. Decreased transparency.

4. Difficulties in monitoring supply revenue and usage and an inability to cross-check utilization of supplies.

5. Inability to audit and adjust systems properly to capture cost-to-charge data visibility.

6. Inaccurate billing.

7. Excessive use of labor.

More Articles on Hospital Revenue Cycle:

Internal Controls May Help Block Hospital Revenue Leakage

21% of Hospitals Expect to Replace Revenue Cycle System

5 Major Issues for Hospital Revenue Cycle Teams

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