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Cost containment strategies by private hospitals: their effectiveness, importance, and use
R W Rutledge1, S Parsons, B Bernard
1Department of Accounting and Business Law, School of Business Administration, Monmouth University, West Long Branch, NJ, USA.
Abstract:
This article presents a study that identifies cost issues and strategies in a highly competitive hospital service area. Specifically, the study seeks to determine the most important cost issues that are currently facing hospitals and to examine the effectiveness of various cost containment strategies. Additionally, the study examines the extent of agreement among hospitals regarding the effectiveness of cost containment strategies. The current study focused on all private hospitals in the Baton Rouge service area. A high degree of consensus was found regarding the importance of cost issues in the service area. One of the more significant findings was the strong agreement that physician involvement (in the category of physician use of resources) was the most important cost issue facing hospitals in the Baton Rouge service area. The group of cost containment strategies with the greatest success related to the issue of budgeting and patient accounts. In particular, electronic billing and the use of collection agencies were favored.