Cost accounting helps ensure group practice profitability

Physician practice managers are faced with the challenge of developing overall practice budgets, identifying strategies for the practice, and negotiating profitable managed care contracts. To accomplish these objectives, they need to understand and manage the costs associated with practice operations. Practices that have used cost accounting methodologies to identify their operational costs in greater detail and have developed methods to effectively manage their costs are likely to be more attractive partners to health plans and better positioned to thrive under managed care.