One method might be to divide the executive salaries by the average number of patients seen in the facility over the year, or some similar method. This is only one example of how an indirect expense can become a direct expense using ABC methodology.
The purpose of ABC is to serve as a tool for management. If management can see how each unit affects the cost structure, then they can spot areas that are more or less efficient. There are more limitations in managerial abilities to do this in the healthcare industry than in other areas of the economy. This is largely due to the limits imposed by maintaining patient safety. However, cost accounting can still provide an effective means to reduce costs to the maximum extent possible.
Reducing costs in the healthcare industry means achieving greater cost efficiency. ABC spreads the burden over a greater number of patients and allows every expenditure to be accounted for in some manner. As this case study demonstrated, reducing costs does not have to mean sacrificing patient safety. One does not have to reduce costs by buying cheaper supplies. Direct costs can remain the same. However, costs can be reduced by reducing the amount of administrative time needed for each procedure. Spreading out administrative costs provides a more realistic picture of how these costs affect the costs of each individual procedure. Administrative costs that are out of line can be reduced in order to control costs. This is how ABC can be used more effectively to reduce costs and...
Health Care -- Lean Philosophy on Cost Reduction and Quality Improvement Lean Philosophy is initially traced back to Henry Ford's innovative assembly line, revolutionizing manufacturing while failing to provide true variety. Building on Ford's concepts Toyota management established a Lean Philosophy in the 1930's and 1940's that focused on production flow and waste elimination, resulting in rapid, low cost and high quality processes, along with simpler and more accurate management. These
healthcare industry/medical laboratories. As the conditions change and new information becomes available, one can easily realize that this industry has many components that drive it. Prices As demand for laboratory services is rather inelastic, laboratories can establish prices as they deem appropriate. Reimbursement for services is limited, however, by contracts which the laboratory holds with various healthcare plans (Daron 2008). These healthcare plans, including Medicare and Medicaid, will negotiate reimbursement fees
Com). A certain amount of errors is to be expected, but there should not be so many that it demonstrates a certain level of skewedness about the model in its entirety. Thus, if the NHI model is the one which is selected, then it needs to be tested against a range of different scenarios. The following demonstrate some truly relevant what-ifs: what if the doctors only move half the projected
The union thus acts as an advocate for worker's legal rights, including their right not to be subject to drug tests as well (although this issue is far more contentious, given that Xanitos also argues that testing is required from the point-of-view of patient safety. A more controversial drug testing issue is prohibiting all workers from using tobacco, a controversial practice that has become increasingly common amongst healthcare establishments. "More
True Cost of Increased Malpractice Insurance in the Health Care Industry During the last decade, medical malpractice premiums have increased exponentially, resulting in a decreased pool of qualified physicians operating in the medical arena. The medical industry is facing many crises, including rapidly increasing health insurance premiums that affect consumers directly. One arena consumers may not have considered evaluating is that of medical malpractice. Medical Malpractice, as defined by the U.S. General
These stakeholders are also vital in the promotion of the application of standards-based technology. This is critical as it enhances the safety and security of the citizens as they pursue low-cost health care services and products within the context of the United States. The federal and state governments have also been influential in the development and implementation of policies towards addressing security and privacy issues in relation to the utilization
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