Enhanced ABC costing for hospitals: directed expense costing
1CostFlex Systems, Inc., Mobile, AL, USA.
Hospital Cost Management and Accounting
|September 4, 1997
Summary
Directed expense costing offers a straightforward, accurate, and cost-effective accounting system. Despite initial resistance from some department heads, the system
Area of Science:
- Healthcare Management
- Cost Accounting
- Financial Systems Analysis
Background:
- Traditional cost accounting methods can be complex and opaque to end-users.
- Implementing new financial systems often faces resistance from stakeholders.
- Accurate cost allocation is crucial for assessing departmental value in healthcare institutions.
Purpose of the Study:
- To introduce and defend a directed expense costing system.
- To highlight the system's user-friendliness, accuracy, and efficiency.
- To address concerns raised by hospital department heads regarding cost data impact.
Main Methods:
- The study describes a directed expense costing system with hidden, sophisticated processes for data integrity.
- The system is designed for user-friendliness, ease of use, and auditability.
- User satisfaction with costing quality facilitates inter-departmental communication.
Main Results:
- The directed expense costing system is presented as simple, understandable, and easy to use and audit for users.
- Sophisticated, hidden processes ensure the integrity and accuracy of the costing.
- Despite its benefits, some hospital managers and physicians express dissatisfaction with the system's impact.
Conclusions:
- The directed expense costing system is effective, accurate, and cost-efficient.
- Healthcare professionals must adapt to the accountability provided by the system for value assessment.
- The system fosters improved communication through shared understanding of cost data.
Related Concept Videos
01:26Methods Of Healthcare Delivery System
At the different levels of the healthcare system, we see varying methods of healthcare used. These methods include managed care systems, case management, and primary healthcare.
Managed Care System:
The managed care system is designed to control the cost while maintaining the quality of care. The patient's care from admission to discharge is planned by the primary care provider or the case manager, also known as the gatekeeper. In a managed care system, the number of care providers is limited...
Managed Care System:
The managed care system is designed to control the cost while maintaining the quality of care. The patient's care from admission to discharge is planned by the primary care provider or the case manager, also known as the gatekeeper. In a managed care system, the number of care providers is limited...
01:28Hospitals-I
Hospitals offer medical and surgical care to the sick and injured, along with accommodation while they recover. At the same time, they also provide outpatient, emergency, psychiatric, and rehabilitation services to meet various community needs. In addition to providing medical care, hospitals also act as hubs for medical research and training. Hospitals use clinical procedures and evidence-based practice standards to deliver patient care. To deliver safe and efficient care, a nurse must stay up...
01:29Issues And Trends In Healthcare Delivery System
The issues and trends in healthcare delivery are constantly changing. The COVID-19 pandemic is one recent issue that wreaked havoc on healthcare systems, causing a shortage of healthcare workers, high demand for medicines and supplies, and increased medical expenditure due to a lack of insurance. Other issues include rising healthcare costs and care fragmentation.
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
01:20Integrated Healthcare System
An integrated healthcare system (IHS) is a set of organizations that provides for or arranges to provide coordinated and continuous service to a defined population. The IHS takes responsibility for that particular population's health status and outcome, both clinically and fiscally. An integrated healthcare system is a well-organized, well-coordinated, and collaborative network. The integrated delivery system is a network that connects different healthcare providers to deliver organized,...
01:23Methods of Documentation V: CBE
Charting by Exception, or CBE, is a method of documentation used in healthcare, particularly in nursing, that focuses on documenting only significant or abnormal findings rather than recording every detail. This approach aims to streamline the documentation process, improve efficiency, and ensure that healthcare providers can quickly identify deviations from normalcy in patient assessments.
In CBE, healthcare professionals establish predefined standards of practice that define what constitutes...
In CBE, healthcare professionals establish predefined standards of practice that define what constitutes...
01:30Health Information Technology and Healthcare Information System
Health Information Technology (HIT)
Health Information Technology, commonly called HIT, integrates advanced information systems and technology in healthcare settings. Its primary functions include:
Health Information Technology, commonly called HIT, integrates advanced information systems and technology in healthcare settings. Its primary functions include: