Cost-accounting techniques for health care providers

The author reviews cost-accounting techniques and systems used by manufacturing companies. Some of the concepts and techniques used by for-profit companies can be implemented for health care institutions. Nurse executives can learn many lessons in product cost accounting from these for-profit companies. Understanding the various cost-accounting methodologies and techniques that are available can help nurse executives design, implement, and use a cost accounting system that will identify the costs associated with products and services provided. The author also reviews and explains standard costing systems. These systems can serve as valuable tools for budgeting, evaluating, and controlling departmental costs. When used in these instances, they can prove useful, and they furnish important information that is necessary for pricing products, determining alternatives or substitute services, and controlling costs.