Pricing and cost accounting: challenges for healthcare organizations in a market economy

Abstract

The development of health care aims to improve access and quality while reducing costs. An important part of this is improving pricing models to more accurately reflect the costs of health care delivery. Transparent, cost-reflective pricing is needed to communicate information to consumers and manufacturers. This information is central to a consumer-driven marketplace. Healthcare organizations today must focus as much on financial performance and profitability as they do on patient care. This means that healthcare executives must be well versed in cost accounting and budgeting. This article explores pricing issues and the problems associated with cost accounting in healthcare organizations. The author considers application of a method of the account of the expenses based on identification of processes within the firm and allocation of expenses in proportion to their use (method ABC).