Accounting has frequently been referred to as the language of business and like other professions has its own language that describes the financial history and current financial status of the organization. What are some of the key concepts in health care accounting and why are they important?

The accounting department is basically the backbone of any institution which is in charge of allocating the funds to different departments and keeping a check on those funds.

Like any other institution, Healthcare deals with funds too, and for the management of those funds, accounting plays a vital role. Here are some important concepts of health care accounting:

Revenue Cycle Management: Accounting is very important for the revenue cycle management of the healthcare business. Revenue is the lifeblood of any business. In healthcare, RCM consists of  Managing a medical office’s payments received, Processing, and tracking, which can often become complex, Determining patient eligibility for specific services etc. These things can only be managed if there is a sound accounting system.

Logistic and Supply Chain Management in the Health Care Industry: The health care industry incurs a tremendous amount of cost from the receiving, handling, and distribution of its products. The health care supply chain has slowly changed from mass to focused marketing where flexibility is essential and facilities must in the future concentrate on a single integrated supply chain. The extension of the supply chain must involve targeting the marketplace, achieving economies of scale, and integrating national logistics information flows

Total Quality Management (TQM) in the Health Care Industry: Total quality management is a system that makes quality the responsibility of all clinicians and administrators throughout the health care organization. TQM uses quality as the fundamental measurement metric, continuous improvement as the philosophy, and employee involvement as the approach.