Product lines in hospitals

The findings presented in the case study demonstrate that financial analysis is only as valid as the assumptions it is based upon. The single most important task is the definition of the clinical product. All other associated data is suspect and can lead to serious errors in business decisions if the product is poorly defined. A comprehensive case mix system, integrated with other financial systems with flexible reporting capabilities is required. The hospital and physicians must be willing to invest the time and expense necessary to ensure that the data is reliable. The hospital must be prudent in determining what cost finding approach they will elect to use. Although the RCC method has some fundamental problems, care must be taken not to develop a cost system that will require a significant amount of effort to maintain.