A New Cost Accounting Model and New Indicators for Hospital Management Based on Personnel Cost

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Author(s): Yoshiaki Nakagawa (Kyoto University, Japan), Hiroyuki Yoshihara (Kyoto University, Japan)and Yoshinobu Nakagawa (Kagawa National Children’s Hospital, Japan)
Copyright: 2012
Pages: 16
Source title: Management Engineering for Effective Healthcare Delivery: Principles and Applications
Source Author(s)/Editor(s): Alexander Kolker (Children's Hospital of Wisconsin, USA)and Pierce Story (GE Healthcare, USA)
DOI: 10.4018/978-1-60960-872-9.ch020

Keywords: Health Information Systems / Medical Information Science Reference / Medicine & Healthcare

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Abstract

New financial indicators were developed based on personnel costs which were calculated using this new cost accounting system. Indicator 1: The ratio of the marginal profit after personnel cost per personnel cost (RMP). Indicator 2: The ratio of investment (=indirect cost) per personnel cost (RIP). Operation profit per one dollar of personnel cost (OPP) was demonstrated to be the difference between the RMP and RIP. The break-even point (BEP) and break-even ratio (BER) could be determined by combining the indicators. RMP demonstrates not only the medical efficiency, but also the medical productivity in the case of DPC/DRG groups. OPP can be utilized to compare the medical efficiency of each department in either one hospital or multiple hospitals. It also makes it possible to evaluate the management efficiency of multiple hospitals.

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A New Cost Accounting Model and New Indicators for Hospital Management Based on Personnel Cost

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