...134-bed facility with 800 employees who care for patients in neonatal ICU, pediatric ICU, pediatric emergency room, intermediate care unit, bone-marrow transplant unit, subspecialty clinic, and outreach clinic (Meliones, 2000). The annual operating loss of DCH grew from a high $4 million in 1992 to a staggering $11 million in 1996, forcing hospital administrators to cut-down resources. This move made some caregivers feel that the clinical care quality at DCH had deteriorated. Complaints from parents were on the rise, dissatisfied doctors considered sending their patients to other hospitals, and some frustrated staff members eventually quit. As important as DCH’s institutional mission was to promote the community’s health, so important it was to not lose focus from the big picture during a difficult time. The specific goal of clinicians is to restore the health of their patients; however, cost is not something that they want on their minds. Hospital administrators on the other hand have their specific goal to control the rapidly growing healthcare costs. Cost-cutting in such testing conditions traumatized patients, frustrated clinicians, and crippled the mission of DCH. The decision to remove a respirator therapist who worked in the night shift, for instance, affected not only the patient and her parents, but also the insurance company, which ended up paying additional charges for the ventilator and ICU (Meliones, 2000). These situations also give clinicians a powerlessness...
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...CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming the firm did not lower its selling price because of the reported lower product cost). However, the increased profit is, at best, a twist in truth. Costs of the product not charged to the product itself are borne by other products of the firm. Worse, undercosting a product may result in managers erroneously believing the product to be more profitable than other products and shifting the limited resource the firm has into manufacturing, promotion, and sales of the product when, in fact, other products are more profitable to the firm. Severe cost distortions may lead firms not to drop unprofitable products because the cost data show these products are profitable. 5-3 Overcosting does not increase revenues. A firm can increase the selling price of a product, thereby increasing the total revenue from the product only if the market allows. Increases in the selling price of a product without experiencing noticeable decrease in the sales...
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...CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming the firm did not lower its selling price because of the reported lower product cost). However, the increased profit is, at best, a twist in truth. Costs of the product not charged to the product itself are borne by other products of the firm. Worse, undercosting a product may result in managers erroneously believing the product to be more profitable than other products and shifting the limited resource the firm has into manufacturing, promotion, and sales of the product when, in fact, other products are more profitable to the firm. Severe cost distortions may lead firms not to drop unprofitable products because the cost data show these products are profitable. 5-3 Overcosting does not increase revenues. A firm can increase the selling price of a product, thereby increasing the total revenue from the product only if the market allows. Increases in the selling price of a product without experiencing noticeable decrease in the sales...
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...Grade Recieved - "A" Despite the documented challenges that the U.S. health care system faces, it also enjoys a number of advantages over other systems around the world. Choose 2 other countries from around the world and discuss the strengths of the U.S. health care system as compared to these countries from an administrator’s and a third-party payer’s perspectives. In your answer, be sure to not only discuss each strength, but provide an explanation as to why you feel the United States has this advantage over the other countries you chose. Abstract United States has many strengths and weaknesses within the healthcare system. In this case, we are going to focus on the strengths of the healthcare system in the United States and how they measure up to the healthcare system in two other countries. Those countries on India and Canada. The healthcare system within the United States is one of the best in the world. In order to receive a better understanding of the strength of the United States healthcare system, we have to dive into the healthcare systems of other countries. Real life questions were asked, from individuals from two different parts of the world in two different hospitals and how they felt about the healthcare system in the native countries. Once the healthcare systems of India and Canada have been explained, we can dive into the strength of the healthcare system in the United States. The life expectancy of individuals within India is...
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...and improve customer value within the organization. That will allow for remote access to various products and services. The improvement targets both the patients and providers, hence optimizing health care delivery. Agile Approach constitute the sequential execution of processes within a given period and provides a feedback loop to the clients to ensure solution validation. The goal of the model is to advance service delivery within various the hospitals since it enhances the relationship between the health providers and the patients. An example of a nurse-managed model The figure above illustrates the Triple Aim Model. Most health care models currently implement various processes that will embrace the above example. The incorporate the costing approach with the demands of the various stakeholders to provide products and services that meet the final demand of the consumers. Hence, agile methodology is appropriate in most health care setup since it can maximize new process benefits and return on investment. That will ensure the success of the organization....
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...University of Phoenix Material Case Study—Memorial Health System CPOE Implementation Memorial Health System is an eight-hospital integrated health care system in the Midwestern United States. The health system has two downtown flagship tertiary care hospitals, each licensed for more than 700 beds, located in the two major metropolitan areas served by the system. The remaining six hospitals are community-based facilities, ranging in size from 200 to 400 beds. These hospitals are located in the suburban and rural areas served by Memorial Health System. Four years ago, the system’s board of directors approved a multi-million-dollar initiative to install an enterprise-wide clinician provider order entry (CPOE) system intended to dramatically reduce medical errors. Today, the system is far from fully implemented, and, in fact, has been removed from all but one of the two tertiary care facilities, where it remains in pilot adopter status. At the time, the board approved the CPOE initiative, the project was championed by Fred Dryer, the CEO, and was closely supported by Joe Roberts, the chief information officer (CIO) of the health system. Even during its proposal and evaluation by the board, the project was considered controversial by some of the health system’s stakeholders. For example, many of its physicians, who are community-based independent providers, were adamantly opposed to the CPOE system. They worried that their workload would increase because CPOE systems replace...
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...INTRODUCTION TO COST MANAGEMENT Activity-Based Costing and Management After studying this chapter, you should be able to . . . 1. Explain the strategic role of activity-based costing 2. Describe activity-based costing (ABC), the steps in developing an ABC system, and the benefits and limitations of an ABC system 3. Determine product costs under both the volume-based method and the activity-based method and contrast the two 4. Explain activity-based management (ABM) PART I 5. Describe how ABC/M is used in manufacturing companies, service companies, and governmental organizations 6. Use an activity-based approach to analyze customer profitability 7. Identify key factors for successful ABC/M implementation Beware of little expenses. A small leak will sink a great ship. Benjamin Franklin This chapter has a lot to do with implementing the spirit of Benjamin Franklin’s observation—in cost management terms—that it really does matter how accurately you calculate a cost. Why? Having accurate costs is important for a variety of reasons: a company might find that it has a difficult time determining which of its products is most profitable. Alternatively, it finds its sales increasing but profits declining and cannot understand why. Perhaps the company keeps losing competitive bids for products and services and does not understand why. In many cases, accurate cost information is the answer to these questions. Accurate cost information provides a competitive advantage...
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...C H A P T E R F I V E INTRODUCTION TO COST MANAGEMENT Activity-Based Costing and Management After studying this chapter, you should be able to . . . 1. Explain the strategic role of activity-based costing 2. Describe activity-based costing (ABC), the steps in developing an ABC system, and the benefits and limitations of an ABC system 3. Determine product costs under both the volume-based method and the activity-based method and contrast the two 4. Explain activity-based management (ABM) 5. Describe how ABC/M is used in manufacturing companies, service companies, and governmental organizations 6. Use an activity-based approach to analyze customer profitability 7. Identify key factors for successful ABC/M implementation PART I Beware of little expenses. A small leak will sink a great ship. Benjamin Franklin This chapter has a lot to do with implementing the spirit of Benjamin Franklin’s observation—in cost management terms—that it really does matter how accurately you calculate a cost. Why? Having accurate costs is important for a variety of reasons: a company might find that it has a difficult time determining which of its products is most profitable. Alternatively, it finds its sales increasing but profits declining and cannot understand why. Perhaps the company keeps losing competitive bids for products and services and does not understand why. In many cases, accurate cost information is the answer to these questions. Accurate cost information provides a competitive...
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...C H A P T E R F I V E INTRODUCTION TO COST MANAGEMENT Activity-Based Costing and Management After studying this chapter, you should be able to . . . 1. Explain the strategic role of activity-based costing 2. Describe activity-based costing (ABC), the steps in developing an ABC system, and the benefits and limitations of an ABC system 3. Determine product costs under both the volume-based method and the activity-based method and contrast the two 4. Explain activity-based management (ABM) 5. Describe how ABC/M is used in manufacturing companies, service companies, and governmental organizations 6. Use an activity-based approach to analyze customer profitability 7. Identify key factors for successful ABC/M implementation PART I Beware of little expenses. A small leak will sink a great ship. Benjamin Franklin This chapter has a lot to do with implementing the spirit of Benjamin Franklin’s observation—in cost management terms—that it really does matter how accurately you calculate a cost. Why? Having accurate costs is important for a variety of reasons: a company might find that it has a difficult time determining which of its products is most profitable. Alternatively, it finds its sales increasing but profits declining and cannot understand why. Perhaps the company keeps losing competitive bids for products and services and does not understand why. In many cases, accurate cost information is the answer to these questions. Accurate cost information provides a competitive...
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...directive, families are often approached by nursing staff and asked “Do you want us to do everything?” or if they would prefer a Do Not Resuscitate status (DNR), meaning CPR will not be initiated if breathing or the patient’s heart were to stop. This sends a confusing message to families, that there is something worthy of offering their loved ones; when the reality is, there is nothing worthwhile left to offer. More often than not, despite a grim prognosis for the patient and the possibility of being in a persistent vegetative state (PSV), families routinely choose this option, largely because an informative conversation has never taken place as to the implications of these decisions. This is an issue which can no longer be overlooked. It is costing our nation dearly, both ethically and fiscally. As Americans, it is high time that we come to terms with our mortality and accept the reality that death awaits us all. Denial will not make it less likely to occur. As such, in an effort to promote awareness of this issue and the detrimental impact it has on patients and society as a whole, the following will define and explain the various components of the debate. Overview The emergence of modern medicine in the second half of the 20th century, while nothing short of remarkable, has come with its own set of challenges. Over the years, health care has become more readily available as employee sponsored health plans have extended coverage to more and more Americans providing better...
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...An APIC Guide 2008 Guide to the Elimination of Catheter-Associated Urinary Tract Infections (CAUTIs) Developing and Applying Facility-Based Prevention Interventions in Acute and Long-Term Care Settings About APIC APIC’s mission is to improve health and patient safety by reducing risks of infection and other adverse outcomes. The Association’s more than 12,000 members have primary responsibility for infection prevention, control and hospital epidemiology in healthcare settings around the globe. APIC’s members are nurses, epidemiologists, physicians, microbiologists, clinical pathologists, laboratory technologists and public health professionals. APIC advances its mission through education, research, consultation, collaboration, public policy, practice guidance and credentialing. Look for other topics in APIC’s Elimination Guide Series, including: • • • • Catheter-Related Bloodstream Infections Clostridium difficile Mediastinitis MRSA in Long-Term Care Copyright © 2008 by APIC All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher. All inquires about this document or other APIC products and services may be addressed to: APIC Headquarters 1275 K Street, NW Suite 1000 Washington, DC 20005 Phone: 202.789.1890 Email: APICinfo@apic.org Web: www.apic.org ISBN: 1-933013-39-7 ...
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...WHO Guidelines on Hand Hygiene in Health Care: a Summary First Global Patient Safety Challenge Clean Care is Safer Care a WHO Guidelines on Hand Hygiene in Health Care: a Summary © World Health Organization 2009 WHO/IER/PSP/2009.07 All rights reserved. Publications of the World Health Organization can be obtained from WHO Press, World Health Organization, 20 Avenue Appia, 1211 Geneva 27, Switzerland (tel.: +41 22 791 3264; fax: +41 22 791 4857; e-mail: bookorders@who.int). Requests for permission to reproduce or translate WHO publications – whether for sale or for noncommercial distribution – should be addressed to WHO Press, at the above address (fax: +41 22 791 4806; e-mail: permissions@who.int). The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement. The mention of specific companies or of certain manufacturers’ products does not imply that they are endorsed or recommended by the World Health Organization in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable...
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...HOSPITAL MANAGEMENT INFORMATION SYSTEM Group Members- Rohan Rodrigues-03 Deepa patel-32 INTRODUCTION Hospitals are the key institutions in providing relief against sickness and disease. They have become an integral part of the comprehensive health services in India, both curative and preventive. Significant progress has been made in improving their efficiency and operations.Effectiveness of a health institution - hospitals or nursing homes, depends on its goals and objectives, itsstrategic location, soundness of its operations, and efficiency of its management systems. The administrator's effectiveness depends upon the efficiency with which he is able to achieve the goals and objectives. Some of the major factors determining the effectiveness of a health institution includes patient care management and patient satisfaction. Hospitals are very expensive to build and to operate. Administrators and professionals have to be extremely cost conscious. Effective computerised systems and procedures need to be implemented to ensure proper utilization of limited resources toward quality health care. It becomes even more important when an in-house medical facility is provided by an industry for it’s employees, as is the case for Tata Steel. Patient care management in Tata hospital has fully utilised the power of computers in Medicare, whereby network of integrated systems maintaining patient database for the hospital services in the areas of Pathology, Radiology, Medical Research...
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...Management Cases 15-1 Berkshire Toy Company (Source: Dean Crawford and Eleanor G. Henry, “Budgeting and Performance Evaluation at the Berkshire Toy Company,” Issues in Accounting Education, 15 (2) (May 2000), pp. 283-309.) 15-2 The Mesa Corporation (Source: Robert Capettini, C. W. Chow, and J. E. Williamson, “Instructional case: the Proper Use of Feedback Information,” Issues in Accounting Education, 7 (1) (Spring 1992) pp. 48-56.) Readings 15-1: “Using Enhanced Cost Models in Variance Analysis for Better Control and Decision Making,” by Kennard T. Wing, Management Accounting Quarterly (Winter 2000), pp. 1-9. This article points out that oversimplifications of fixed and variable costs can result in the standard costing system not being used or, if used, can lead to bad decisions. That is, misclassifications of cost behavior patterns make variance analyses “paper tigers.” For variance reporting to be useful, financial managers need to develop cost models that reflect how costs actually behave. Discussion Questions: 1. Describe the implications for variance analysis of analyzing a semi-variable cost as either a variable or fixed cost. 2. Describe the implications for variance analysis of analyzing a step-fixed cost as either a variable or fixed cost. 3. Describe the implications on operating decisions of analyzing an operation with mixed costs as either a variable or fixed cost. 15-2: “Variance Analysis Refines Overhead Cost Control,” by J...
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...The Economics of Health Care Quality and Medical Errors Charles Andel, Stephen L. Davidow, Mark Hollander, and David A. Moreno Charles Andel, MBA, BSRT, is Manager of Radiology Quality and Compliance at Loyola University Medical Center and a graduate of Loyola University Chicago’s Quinlan School of Business MBA in Healthcare Management program. He may be reached at cjandel@lumc.edu. Stephen L. Davidow, MBA, APR, is a health care marketing and communications professional with a strong focus on quality and patient safety. He is a graduate of Loyola University Chicago’s Quinlan School of Business MBA in Healthcare Management program. He may be reached at stephen@davidowcommunciations.com or 708-284-2300. Mark Hollander, MBA, is a financial manager at the Department of Veterans Affairs and graduate of Loyola University Chicago ’s Quinlan School of Business MBA in Healthcare Management program. David A. Moreno, MBA, is a biotechnology business analyst and graduate of the Loyola University Chicago’s Quinlan School of Business MBA in Healthcare Management program. He may be reached at dmoreno1@gmail.com. Hospitals have been looking for ways to improve quality and operational efficiency and cut costs for nearly three decades, using a variety of quality improvement strategies. However, based on recent reports, approximately 200,000 Americans die from preventable medical errors including facility-acquired conditions and millions may experience errors. In 2008, medical...
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