The new healthcare management information: consolidated operational reporting

Most healthcare executives realize that hospitals financed through prospective payment cannot be effectively managed with conventional systems. They recognize the need for improved operational accountability, control and planning, though few have determined the means for achieving it. This article discusses a prototype operational control system designed to get beyond fragmented productivity and cost accounting efforts to an integrated, consolidated operational reporting system which will assist management in achieving its fiscal objectives. Consolidated Operational Reporting (CORE) at the University of California San Diego (UCSD) Medical Center consists of integrated product costing, labor productivity, inventory control, and productivity of capital. CORE enables top management through cost and performance indicators to proactively manage operations. Mid-level managers are a critical link to the CORE system. These front-line managers must understand the relationship between their regular operational decisions and the cost of hospital services. To promote this, UCSD conducts extensive mid-management seminars in operational control. Now these managers can reasonably be expected to understand, negotiate and act on accomplishing performance targets while being regularly updated, through CORE, as to their success at attaining the objective and the cost of the accomplishment.