Design and implementation of a cost-accounting system in hospital pharmacy

The design and implementation of a cost-accounting system in a hospital pharmacy department is described. Pharmacy resource use (labor, drugs, supplies, and overhead), or pharmacy's intermediate products, was clearly defined in terms of dosage forms (10 groupings representing variable labor and supplies) and drug products (more than 100 categories that incorporate cost and volume of use for 3000 line items). Costs were defined as variable or nonvariable (fixed), based on whether they were related to a specific medication order. Labor was divided into variable and fixed components. Time standards were developed using time and motion studies. Variable labor hours were determined as follows: specified hours (the volume of each dosage form multiplied by the standard time for each dosage form); nonspecified hours (time not directly associated with production); hours worked (specified plus nonspecified hours); and hours paid (hours worked plus sick leave and vacation). A standard cost for each drug product was based on the weighted average of volume and cost of the individual line items. The total drug budget was constructed by multiplying the standard cost for each drug product times the projected volume for each drug product. The pharmacy budget was developed by calculating the number and mix of pharmacy products used in association with the projected number and type of cases for the fiscal year. The monthly pharmacy budget reports were assembled with data from the payroll, billing, and cost-accounting systems.(ABSTRACT TRUNCATED AT 250 WORDS)