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Cost accounting in health institutions. Costs and health companies

The products offered by health companies have some peculiarities: they are intangible, they can not be manufactured in series, they are generally not homogeneous, etc., such characteristics make it difficult to calculate costs.

On the other hand, we must recognize that in our environment for many years health care institutions have not given much importance to the calculation of the costs of their services.

Once the crisis has whipped them mercilessly they were forced to review all their procedures, both technical and administrative, to try to become sustainable or at least begin to move towards it. After checking that the variable Income was not the easiest to manage, they focused their attention on costs and perceived that there was not much information, but that it was very general and not very precise.

But the issue is that both the information system and bookkeeping Brisbane are not elements that can be modified overnight to get what is necessary to manage a company, then began to analyze the situation.

Thus, in previous work we have emphasized the following regarding the current situation regarding the cost systems, information systems and decision making in health companies, namely:

  • Cost systems used:

– Costs are calculated using the process cost system or cascade cost distribution.
– It is applied in an off-balance sheet form since the chart of accounts developed by the MSP is not adapted for cost accounting.
– Among the different companies cost centers are not exactly the same, some have more detailed information and others more general (for example some have the hospital service and others have three hospitalizations, room, ICU, ICU)

  • Information system and reliability of the same

– The computer systems were not designed with the purpose of obtaining costs but general information of expenses. Each management system should give an expense information by cost center, instead it is given in another format. For example, salary systems report spending by staff and concept (base salary, seniority, overtime, etc.) and not spending by each cost center.
– Lack of information, for example to adopt indirect cost distribution criteria.
– The information is not previously controlled.
– And, perhaps something very important, there is no cost culture among the officials who are the ones who often generate or collect the cost data. If people do not know what the company wants, it is difficult to make any effort.

  • Decision making

In the works mentioned above we expressed the following words:

“… At the time of decision making, the information that arises from cost systems is taken into account in generic form and not as a basis, due to all the aforementioned shortcomings.

Most institutions, when they need to know the cost of a department or an activity for a certain reason, carry out a specific study of costs without taking into account, often, the information provided by cost systems … ”

Terrible diagnosis, at least for accountants, we are accustomed to read a lot about cost systems, costing methods, cost classifications, etc.

Before proceeding, it is necessary to review in brief lines the process for the production of the products / services of health companies.

Health as a process of care production

Its concept:

Recently the concept of referring to health service providers as “producing” entities of health services has been imposed, that is, health care is understood as a care process in which these entities produce services that are provided to their Patients.

Every process has a goal, a goal: to produce something, whether material or intangible. In this sense we can say that these companies produce a health service, which can be classified basically into two types:

A) Services related to benefits that require hospitalization of patients : these services are all those that are provided in the sanatorium area, such as hospitalization, either in common or specialized rooms, and major or minor surgery .

B) Services that are provided without requiring hospitalization: among these services we have ambulatory care, polyclinic consultations and care in emergency doors among others.



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