Costing In Health Care Sector

Introduction

Hospital organizations have been facing difficulties and challenges in balancing limited resources and costs to provide their demand for services. Medical research has the effect in introduction of modern medical techniques and medicines, which usually causes the increase of consumed costs. Increasing costs of healthcare systems have the growing demands on the public budgets, and also the patient’s expenditures. Many countries start to seek the alternative sources of financing of healthcare systems, because the traditional systems of healthcare insurances are no more sufficient for covering of expansive healthcare services costs.

Problem Description

Despite the proved advantages of the ABC applications in manufacturing and non-manufacturing sectors, such as: better understanding of process and activity costs correctly quantifying the costs of distinct production/service activities, some authors points at the number of disadvantages, such as high complexity of the system or large amount of non-financial data requirements.

Problem Solution

Together with the emergence of ABC methodology, issues relating to the practical application in different types of organizations have been presented by both academics and practitioners. Defined the necessary steps to set up an ABC system as follows:

1. Identifying the major activities taking place in an organization.
2. Assigning costs to cost pools/cost centers for each activity.
3. Determining the cost driver for every activity.
4. Assigning the costs of activities to products according to their individual demands on activities It is obvious that the app.

Identifying the major activities

Most of the studies define the activity definition as the default step of application. Activities form the

Basis of measurement of all relevant information in an ABC system. Several procedures defining

Activities may be used

• Analysis of the organizational structure of an enterprise
• Analysis of the workplace
• Analysis of personnel costs

Conclusion

 When we analyze studies of ABC applications in healthcare, we can observe that they differ a great deal in methodology, data collection technique and the setting. There are many studies focusing on just one treatment procedure and there are also studies focusing on departments. Because of the important differences between the individual procedures and departments in hospitals, the complex applications of ABC, this could replace the obsolete costing and accounting systems, are very unique.