Executive Summary

This paper aims to determine how payer mix impacts on the revenue streams of a healthcare organization. Hospitals require funds to ensure that they offer services that meet the needs and preferences of patients who are essentially their customers. Like in any service-oriented organization, the quality of service provided determines customer satisfaction (Cook & Neely, 2013). The hospital cannot meet its primary objectives when it does not have sufficient funds to conduct its operations. Payer mix affects an organization’s revenue stream. Healthcare organizations could do with a payer mix that enhances the flow of revenue (Freedman et al., 2017). This will ensure that the hospital has sufficient funds to meet its operational needs and that it is in a position to provide quality services that meet the needs and preferences of customers. A payer mix that enhances the flow of revenue will also ensure that healthcare organizations do not compromise on service quality when serving it premium customers. Poor service can drive many patients to rival organizations that offer better services.

The initial assumption of this study is that any payer mix that is skewed towards payment options that delay the receipt of funds for the hospital will hinder its operations. The analysis should examine how a payer mix impacts on the revenue stream of a healthcare organization. It should also analyze how the hospital can encourage a payer mix that improves revenue flow. It should further consider how the pursuit of improved revenue flow can deter a healthcare organization from discharging its duties as required by law and the possible legal implications of such actions (Teitelbaum & Wilensky, 2017).

A Healthcare organization should strive to have a payer mix that improves the flow of revenue but at the same time enables it to offer treatment even to customers with unfavorable payment means.

References

Cook, J. S., & Neely, P. A. (2013). Business Intelligence for Healthcare: A Prescription for Better Managing. Information Quality and Governance for Business Intelligence, 88.

Freedman, S., Nikpay, S., Carroll, A., & Simon, K. (2017). Changes in inpatient payer-mix and hospitalizations following Medicaid expansion: Evidence from all-capture hospital discharge data. PloS one, 12(9), e0183616.

Teitelbaum, J.B. & Wilensky, S.E. (2017) Essentials of Health Policy and Law (3rd ed.). Boston, MA: Jones & Bartlett.

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