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Mwaura James Njau - Master of Business Administration, Kenyatta University, Kenya

Dr. Farida Abdul - Department of Accounting and Finance, Kenyatta University, Kenya


The private healthcare sector in Kenya has made a remarkable contribution in the delivery of healthcare services. The growth of the sector is spurred by deteriorating performance in the public hospitals and lack of resources. However, their demonstrated significance in actualization of development goals, sustainability of private hospitals has been put to question, threatening the socio-economic status of both developing and emerging economies. These organizations struggle with ensuring that debts are collected while not pressuring the patients so much that they seek care at other facilities. There are however strategies advanced to ensure that the poor people have proper access to medical services in the private sector but its implementation is far from being effected due to the costs that are involved. This study sought to establish the effect of revenue cycle management strategies on financial performance of profit making private hospitals in Nairobi City County, Kenya. Specifically, this study focused on the effect of communication strategies between medical providers and billing staff, implementing payment strategies, billing strategies, and accounts receivable management strategies on financial performance of profit making private hospitals in Nairobi City County, Kenya. This study was anchored on the Transactions Cost Theory, Contingency Theory and Trade-off Theory. The study adopted a descriptive research design. This study targeted the private hospitals in Kenya. The unit of analysis is 47 profit making private hospitals. The unit of observation was the 780 respondents comprising of senior management. To determine how the sample was distributed among the targeted respondents, the study selected the respondents using the purposive sampling technique. Self-administered questionnaires were used to collect primary data. Data was analysed using Statistical Package for Social Sciences (SPSS Version 25.0). Descriptive statistics included mean, frequency, standard deviation and percentages was used to profile sample characteristics and major patterns emerging from the data. In addition to measures of central tendencies, measures of dispersion and graphical representations were used to tabulate the information. Content analysis was also used in processing of this data and results presented in prose form. Inferential data analysis was done using regression and correlation analysis. Cross sectional data was presented in tables and graphs while qualitative data analysis was presented in prose form. The research found that hospitals provide reminder calls to patients and include discussion regarding patient balances and point of service (POS) collection policies. The research also found that the hospitals assist uninsured patients by scheduling a meeting with financial counsellors to complete financial assistance applications. The study also found that the hospitals use concurrent coding to improve medical necessity documentation. The research found that was not certain whether the hospitals hold weekly nursing and health information management (HIM) team meetings to discuss medical necessity documentation and charge capture opportunities. The study concluded that communication strategies between medical providers and billing staff had the greatest effect on the financial performance of profit making private hospitals in Nairobi City County, Kenya, followed by accuracy of billing strategies, then consistent accounts receivable reviews while Implementing payment strategies had the least effect to the financial performance of profit making private hospitals in Nairobi City County, Kenya. The study recommends that the timeliness observed in billing service at profit making private hospitals should be upheld in order to achieve its effectiveness and efficiency and consequently result to customer satisfaction. The study recommends long-term initiatives captured in a communication plan to enable conceptualization of dealing with complex issues such as conservation and to provide time for diverse functions including consensus building and forming networks.

Full Length Research (PDF Format)