Hospital and Health Care Accounting

Cost-accounting has been considered as critical segment in the hospitals & in the management of health care. The benefit and cost of cost-accounting is challenged, because of operation of hospital's uniqueness and perceived manager's inability for demonstrating, how cost of maintaining and implementing systems of cost-accounting are replaced by modern cost-reduction or revenues.

Hospital and health care cost accounting has become more valued because the costs are very much scrutinized today. In Hospital and health care cost accounting, it is very important to know actual costs because of following reasons:

In order to provide bill to the patients having correct figure or amount. In order to make the management understand the costs & with the help of that it can easily make efficient decision.

An arrangement for capitation payment proves to be efficient means for controlling costs for healthcare as it permits both employer and insurer in predicting healthcare-service costs, more correctly or accurately. When the method of capitation payment is taken into use, the risk of finance of taking care of the patients is shifted to the delivery-system of medical. If the delivery-system of healthcare is not having system of cost accounting or an ability for developing information relating to cost on every service and payer line, then, in such a case, it is mandatory to search a way for developing those info before taking entry into contract of capitation. A method having 6 steps has been recommended to develop capitation-payment price (rate). Hospital and health care cost accounting is taken into use along with data collected from study of market. The 6 s teps which are recommended are as follows:

Determine or find out the base of cost of delivery-system. Develop the use prices. Calculate the rates of capitation. Adjust prices for effect of the incremental-volume. Negotiating contract. Monitor the performance of the contract.

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