The Impact of Healthcare Reform on Hospital Costing Systems, Article Review Example

In his article on healthcare reform and its impact on hospital costing systems, author Paul Selivanoff discusses five strategies hospitals can use to respond to the coming changes, and also examines the potential positive and negative impacts that these strategies might have on hospital accounting systems.  Selivanoff notes at the time the article was written in 2011 that some of these changes will not take place for years; in 2014 the changes prompted by Healthcare Reform are now being implemented. Selivanoff’s suggestions may be valuable for hospitals of different sizes, and some of these suggestions might work better for some hospitals than for others.

Moving from a strategic to an operational cost0finding system, where costs are assessed monthly instead of yearly, will make it possible to develop more accurate and flexible costing information. This may place additional stress on the accounting operations, however, which could necessitate hiring more staff. Replacing standards costing with job costing will allow hospitals to measure incurred costs instead of applying averaged costing for different levels of service. A comprehensive review of working classifications with managers and administrators will allow for everyone involved to be on the same page where costing terms and standards are concerned.  A review of the expenses assigned to cost buckets will ensure that these costs align appropriately with the standard cost classifications in use among managers, accounting staff, and hospital leaders. Finally, an emphasis on the use of microcosting –where every detail of every recource used is measured and accounted for- will make it possible to have a clearer picture of costs and to more effectively plan for the future.

The implementation of microcosting and other strategies will require that hospital staff at all levels take new approaches to costing procedures. Such changes are potentially expensive, and may require everything from training to staff increases. Individual hospitals will have to assess which of these strategies will benefit them and determine how to implement those that are helpful. With the changes that are taking place in the healthcare arena, it will be more important than ever that hospitals effectively and accurately measure, monitor, and control costs. Strategies such as the ones presented by the author may be useful and helpful for hospitals as they face the challenges and opportunities presented by healthcare reform.

References

Selivanoff, P. (2011). The impact of healthcare reform on hospital costing systems. Healthcare Financial Management, 110-116.