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Healthcare Accounting: How It Impacts the Patient and Practice

Healthcare Revenue Leakage Why It’s Happening and How to Stop the Leakage
Accounting may seem unrelated to patient care. However, how hospitals or clinics manage their finances and maintain financial stability affects nearly every aspect of the healthcare experience. That’s why we have a specialized field called healthcare accounting: to ensure patients receive and experience medical care.

In fact, research shows that integrating accounting with medical practice is crucial for enhancing efficiency and effectiveness. But there’s more to healthcare accounting than just filling up your books.

In this blog, let’s look at the impact of healthcare accounting on the patient and your practice, sharing expert advice on what you can do to improve accounting methods and patient experience.

What is healthcare accounting?

Healthcare accounting is a specialized field focused on managing finances within healthcare institutions.

You might be thinking, “Why does it have to be a specialized field?” At first glance, healthcare accounting is just like any accounting for a business, following the generally accepted accounting principles (GAAP). Keeping books, tracking expenses, and cash flow are part of this.

But here’s where it gets complex:

Money comes in from insurance payments, patient payments, and grants or other sources.
Money goes out to cover wages, supplies, reimbursements, and overhead.
Insurance payments may be delayed or require back-and-forth communication.
Some patients may pay late or struggle to afford the payment.
You must be compliant with HIPAA regulations.
Therefore, healthcare accounting is more than regular accounting. It must withstand changing payment rates, insurance regulations, and rising costs, while also mitigating the financial burden of denied claims and improving the quality of care.

What are the impacts of healthcare accounting?

Many healthcare providers have a basic understanding of accounting. We’ve done it all before in our personal lives. We track our income and expenses, but the healthcare industry traverses a complex financial landscape. One misstep can result in significant losses.

At Synapse Accounting and Bookkeeping, we understand that basic knowledge won’t secure financial health. We guide our clients into recognizing how vital proper healthcare accounting is in every facet of their practice.

Below, you will find how healthcare accounting, from managing accounts receivable to ensuring patient satisfaction, underscores the critical importance of sound financial management.

Key Areas of Impact

Effects of Poor Healthcare Accounting

Effects of Proper Healthcare Accounting

Key Areas of Impact

Accounts Receivable Management

Effects of Poor Healthcare Accounting

  • Inadequate accounting leads to an increase in unpaid bills or bad debts.
  • Improperly managed accounts can also cause unwarranted write-offs, further reducing revenue.

Effects of Proper Healthcare Accounting

  • Quickly generate accurate invoices and follow up on outstanding balances.
  • Reduce claim denials and aging receivables.

Key Areas of Impact

Insurance Processing

Effects of Poor Healthcare Accounting

  • Errors and inaccuracies in claims submission lead to delays in claim adjudication.
  • Increased denial rates and reduced reimbursement payments from insurance companies.

Effects of Proper Healthcare Accounting

  • Maintain clear, organized financial documentation.
  • Ensure compliance with insurance policies and regulatory standards.
  • Lowers the risk of audits, claim denials, and potential penalties.

Key Areas of Impact

Staffing

Effects of Poor Healthcare Accounting

  • Reduce staffing levels or delay hiring, which can impact service delivery and increase wait times for patients.
  • Increased workloads for existing employees contribute to burnout.
  • Increased errors and heightened turnover rates.

Effects of Proper Healthcare Accounting

  • Allocate sufficient funds for hiring and retaining qualified staff.
  • Streamline payroll processing and reduce time spent on billing and financial paperwork.
  • Better employee morale.

Key Areas of Impact

Accessibility to Healthcare Services

Effects of Poor Healthcare Accounting

  • Limited availability of funds to offer a wide range of medical services, especially in underserved or low-income communities.
  • Inadequate financial management leads to higher out-of-pocket costs and poor insurance coverage.

Effects of Proper Healthcare Accounting

  • Enables strategic allocation of financial resources that support service availability and affordability.
  • Improved health outcomes at the community level.

Key Areas of Impact

Patient Satisfaction

Effects of Poor Healthcare Accounting

  • Patient satisfaction scores influenced by financial experiences affect reimbursement rates.
  • Dissatisfied patients are more likely to seek care elsewhere, damaging revenue and reputation for healthcare providers.

Effects of Proper Healthcare Accounting

  • Effective accounting practices lead to clearer billing, fewer errors, timely insurance processing, and consistent financial communication, all of which reduce patient stress related to healthcare costs and foster trust in healthcare providers.
The bottom line? Healthcare accounting safeguards the financial viability of your organization. Ultimately, it ensures the light stays on, allowing you to serve patients effectively and sustainably.

Optimize healthcare accounting for financial success

There is no single correct way to improve one’s healthcare accounting. We have to approach it from different fronts:

Revenue cycle management (RCM): Synapse believes in clean claims on a single pass. You must streamline operations from patient registration to payment, including accurate patient data capture, insurance verification, consistent medical coding, billing accuracy, and denial management.

Cash flow management: Forecasting cash flow, designing real-time monitoring of accounts receivable, and prompt follow-up on payments can reduce delays and disruptions. Forrester reported that nearly 74% financial leaders agreed that we need more accurate cash forecasting, mainly due to the COVID-19 pandemic.

Cost management: Furnish the necessary data for making more informed decisions on operations and infrastructure investments. Done accurately, you can determine operational performance by cost centre. A study found that a 25%-50% reduction in costs can be achieved through a wide range of programs and approaches.

“Financially stable providers may offer better QoC due to their capacity to invest in new technology and attract skilled staff. In turn, better QoC may lead to financial gains,” Almehwari reported.

Experience Synapse’s Expert Healthcare Accounting

Your numbers tell a story. And we care about where the narrative is headed. We want you to grow and continue to deliver excellent patient care.

Schedule a free, no-obligation consultation with Synapse financial specialists today. Let’s analyze your practice’s unique financial story and build a strategy for success that benefits both your patients and your bottom line.

Want to hear a sample of the industry-wide advice you can gain? Our virtual session on Finance Fundamentals with Iris Matanguihan is ready to be watched on our YouTube channel, Synapse Webinars.

Watch the Replay

Sources:

Almehwari, S. A., Almalki, I. S., Abumilha, B. A., & Altharwi, B. H. (2024). Improving Hospital Efficiency and Cost Management: A Systematic Review and Meta-Analysis. Cureus, 16(10), e71721.
https://doi.org/10.7759/cureus.71721

Cha, J., Han, A., & Lee, K. H. (2025). Examining the Impact of Availability and Accessibility of Community Benefit Provisions on County Health Outcomes. Risk Management and Healthcare Policy, 18, 963–974.
https://doi.org/10.2147/RMHP.S492160

Kumah, A. (2025). Poor quality care in healthcare settings: an overlooked epidemic. Frontiers in Public Health, 13.
https://doi.org/10.3389/fpubh.2025.1504172

Milligan, S. (2024, February 13). Understanding the Financial Impact of Patient Satisfaction Scores. Ensemble Health Partners.
https://www.ensemblehp.com/blog/financial-referral-patient-satisfaction-scores/

Shi, L., Li, P., Krishanthi Vithana, Xue, B., & Mahmoud Al-Sayed. (2025). Hospital Management Accounting Systems: Evolving Roles, Actors, and Interactions. The British Accounting Review, 101666–101666.
https://doi.org/10.1016/j.bar.2025.101666

Tyson, J. (2022, January 31). CFOs slow to upgrade cash tracking despite pandemic: Forrester. CFO Dive.
https://www.cfodive.com/news/cfos-slow-upgrade-cash-tracking-pandemic-forrester/618042/

What is the Importance of Accounting for Healthcare? | UMA. (2025). Ultimatemedical.edu.
https://www.ultimatemedical.edu/blog/importance-of-accounting-for-healthcare/#adequate-staffing-2