Article
Managing Costs through Structural Re-arrangement of Hospitals: An Activity Based Management Perspective
Journal of Management Systems
  • W. Lee
  • Sakthi Mahenthiran , Butler University
Document Type
Article
Publication Date
1-1-1994
Disciplines
Additional Publication URL
http://www.aom-iaom.org/jms.html
Abstract

We examine a structural deficiency in the healthcare system that hinders implementation of a meaningful cost accounting system, and suggest an alternative organizational arragement that can facilitate introducing cost control mechanisms. We argue that hospitals need structural rearrangement so that cost-driving activities can be traced, and their costs allocated to responsibility centers. We suggest that this structural rearrangement is a precondition for implementing any meaningful activity-based cost management system. We also suggest a basic framework for value analysis of activities for healthcare providers, and discuss how this framework can be used as a vehicle for controlling diagnostic costs.

Rights

This article was archived with permission from Association of Management-International Association of Management, all rights reserved. Document also available from Journal of Management Systems.

Citation Information
W. Lee and Sakthi Mahenthiran. "Managing Costs through Structural Re-arrangement of Hospitals: An Activity Based Management Perspective" Journal of Management Systems Vol. 6 Iss. 3 (1994) p. 22 - 38
Available at: http://works.bepress.com/sakthi_mahenthiran/13/