How does your medical practice deal with its revenue cycle management? Working with the flow of money into and out of a practice is as important as providing proper care to patients. Without the funds, after all, a practice ceases to function. Thankfully, there are a lot of ways that organizations can improve their relationship with their revenue. Many groups take too long to collect, allow too many write-offs, or use technology that is unoptimized for collections. Some have a very high claim rate denial or fail to follow up on denied claims. Finding out how a given practice can improve its financial situation requires knowing exactly how it is failing to capitalize on available opportunities.

Healthcare spending in the United States is estimated to have hit as much as $3.1 trillion in 2014. That roughly calculates to about $9,700 spent on healthcare for every person in the country. Compared to 2013, healthcare spending among Americans experienced a growth of 5.5 percent last year. This is the first time since 2007 that growth in healthcare spending has gone above five percent.

The primary goal of all medical practices is to provide excellent care to patients, but at the end of the day, a practice is a business. Without a solid patient base, practices cannot be financially successful. Specialty practices that offer elective procedures like cosmetic plastic surgery, fillers and botox injections, and Lasik eye surgery, should not only rely on existing patients for business, but always be looking for ways to bring new patients into a practice. One of the most cost effective ways to build a patient base is through word-of-mouth marketing.

Financial management of a medical practice is similar to mastery of a fine art or sport; it's something that one has to be working at constantly in order to do well. However, striving for financial excellence doesn't have to be a chore. In fact, there are several key habits that you can work into the practice's daily and quarterly routine that can help you maximize profit, reduce error and improve financial stability across the board. Whether you're satisfied with the state of your practice's financials or are looking to improve them, you may benefit from reading these tips:

Whether you've just started your own medical practice or have been a leader in your respective field for years, it's important to recognize that revenue cycle management is one of your foremost concerns. Keeping a close eye on your incoming revenue streams and outgoing budget will allow you to understand where your practice's money is moving, but viewing this data more analytically can do even more for you. Ideally, you should regularly be taking time to observe your practice from a high-level viewpoint with the intention of identifying new sources of profit. The process of identifying new revenue streams can be made a great deal easier with these helpful tips:

Even with the most effective medical billing software, all medical practices experience some level of claim denials (when insurance companies refuse to honor requests for health care coverage). According to the American Academy of Family Physicians, the average denial rate for providers is between 5 and 10 percent. However, the general goal is to keep that number below 5 percent, as a lower denial rate means a more abundant cash flow.

Between keeping up with advances in modern medicine, establishing meaningful and healthy relationships with your patients and dealing with the day-to-day grind of running a business, it can be hard to make time to think critically about revenue cycle management. Still, it's important to remember that having a clear understanding of your various revenue streams and financial management techniques is key to the longevity and success of your practice. Luckily, this need not be quite as difficult an undertaking as it may first seem. In fact, pairing strong organizational techniques with effective practice management software can make financial evaluation a breeze. Take a look at these best practices for managing the financial health of your practice: