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At present, blood centers and transfusion services have limited alternatives for offsetting the ever-rising costs of health care inputs. In the face of current revenue constraints, cost reduction or cost containment through efficiency improvements or service reduction is the principal available means. Such methods ought to be pursued vigorously by blood bankers with the aid of well-designed costing and other physical measurements systems. Experience indicates, however, that blood bankers, in their attempts to reduce or contain costs, are likely to place undue reliance on cost accounting systems as the means of capturing sought-for benefits. Management must learn enough about methods of costing to judge directly the uses and limitations of the information produced. Such understanding begins with recognition that all costs and cost comparisons should be specific to the purpose for which they are developed. No costing procedure is capable of producing measures generally applicable to all management decisions. A measure relevant to a planning decision is unlikely to be appropriate for performance evaluation. Useful comparisons among sets of organizations of costs, or of measures of physical inputs and outputs, require assurance that the methods of measurement employed are the same and that the sets of organizations from which the measures are drawn are reasonably comparable.
At present, blood centers and transfusion services have limited alternatives for offsetting the ever-rising costs of health care inputs. In the face of current revenue constraints, cost reduction or cost containment through efficiency improvements or service reduction is the principal available means. Such methods ought to be pursued vigorously by blood bankers with the aid of well-designed costing and other physical measurements systems. Experience indicates, however, that blood bankers, in their attempts to reduce or contain costs, are likely to place undue reliance on cost accounting systems as the means of capturing sought-for benefits. Management must learn enough about methods of costing to judge directly the uses and limitations of the information produced. Such understanding begins with recognition that all costs and cost comparisons should be specific to the purpose for which they are developed. No costing procedure is capable of producing measures generally applicable to all management decisions. A measure relevant to a planning decision is unlikely to be appropriate for performance evaluation. Useful comparisons among sets of organizations of costs, or of measures of physical inputs and outputs, require assurance that the methods of measurement employed are the same and that the sets of organizations from which the measures are drawn are reasonably comparable.