Page 57 - Healthcare News Sep/Oct 2022

HEALTHY OUTLOOK
Modern Cost Accounting
It Can Help You Improve Your Bottom Line And Better Serve Your Patients
BTy JAMES T. KRUPIENSKI
he cost of delivering healthcare has been ris- “
ing for years, and the current cost-accounting
approach may no longer be effective in the post-COVID-19 world. A more modern cost-accounting approach is needed to accurately reflect the true cost of care and improve decision making.
In cost accounting, all of the various costs incurred
in running a healthcare organization are tallied and categorized. This information is then used to inform deci- sion makers about how to best allocate their resources. Healthcare cost accounting has traditionally been a very complex and manual process, involving a lot of data entry and number crunching. However, as healthcare organiza- tions have become more data-driven, cost accounting has had to evolve to keep up.
One of the biggest challenges in cost accounting is ac- curately capturing all of the costs associated with patient care. These costs can include everything from the cost of medications to supplies, overhead, and the cost of labor. Additionally, cost accounting must take into account both direct and indirect costs. Direct costs are those that can be easily traced back to a specific patient or procedure, while
A more modern cost-accounting approach is essential for healthcare organizations in the post-COVID world to more accurately track their costs and make informed decisions about pricing and reimbursement.”
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indirect costs exist across the entire organization and can- not be directly linked to any one patient or procedure.
Organizations must also consider cost accounting when making decisions about billing and reimbursement. In or- der to set billing rates that reflect the true cost of care, cost accounting must be as accurate and up-to-date as possible. The pandemic has made this even more challenging, with many new factors, such as the cost of pre-visit COVID-19 testing.
There are several reasons why a more modern cost ac- counting approach is needed in healthcare post-COVID.
First, the pandemic has resulted in a significant increase in the number of patients requiring care, while delivering care has slowed down. This has put a strain on resources and has made it more difficult for healthcare organiza- tions to keep track of their costs in a timely manner.
Second, the pandemic has forced healthcare organiza- tions to rapidly adapt their operations. For example, the pandemic has resulted in an increase in the cost of some supplies and medications. Specifically, personal protective
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