Cost Accounting in Healthcare: Going Beyond Historical Data.
January 31, 2020
Cost accounting in healthcare has traditionally used historical cost allocation techniques. In a recent issue of Healthcare Cost Attainment published by the Healthcare Financial Management Association, EPSi COO John Gragg outlines the shortcomings and challenges of using historical data, and what healthcare finance leaders can do to turn a process that uses retrospective data into real-time decision support.
Gragg shares some of the benefits hospitals and health systems can achieve by updating their cost accounting techniques to include real-time data for actionable insights.
“After the operational and department view of real-time costs are developed, the linkage between clinical activities and actual costs will follow,” he writes. This will allow departments to better manage labor and staffing for better productivity and ROI. Access to real-time data and actual labor and supply costs, for example, will give caregivers and clinicians much better insight so they can make better decisions to drive improved outcomes.