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    MOORTHY
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    The document outlines a 10-step process for hospitals to conduct a broader costing analysis: 1) break down revenue streams and costs, 2) map costs to activities, 3) match revenues with costs, 4) remove non-cost items, 5) remove non-operating revenues, 6) add risk premiums, 7) identify cost drivers, 8) match cost pools to drivers, 9) decide allocation keys to apportion costs, and 10) compare costs and revenues to determine profitability. It also lists 4 cost model approaches hospitals can use depending on their size and policies: variable cost, total cost, healthcare package cost, and activity-based cost.

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    The document outlines a 10-step process for hospitals to conduct a broader costing analysis: 1) break down revenue streams and costs, 2) map costs to activities, 3) match revenues with costs, 4) remove non-cost items, 5) remove non-operating revenues, 6) add risk premiums, 7) identify cost drivers, 8) match cost pools to drivers, 9) decide allocation keys to apportion costs, and 10) compare costs and revenues to determine profitability. It also lists 4 cost model approaches hospitals can use depending on their size and policies: variable cost, total cost, healthcare package cost, and activity-based cost.

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    © All Rights Reserved
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    39 views1 page

    HOSPITAL

    Uploaded by

    MOORTHY
    The document outlines a 10-step process for hospitals to conduct a broader costing analysis: 1) break down revenue streams and costs, 2) map costs to activities, 3) match revenues with costs, 4) remove non-cost items, 5) remove non-operating revenues, 6) add risk premiums, 7) identify cost drivers, 8) match cost pools to drivers, 9) decide allocation keys to apportion costs, and 10) compare costs and revenues to determine profitability. It also lists 4 cost model approaches hospitals can use depending on their size and policies: variable cost, total cost, healthcare package cost, and activity-based cost.

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    © All Rights Reserved
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    HOSPITAL INTELIGENCE SYSTEM FOR ANALYTICS

    A broader view of Costing process to be adapted in a hospital

    1. Break down the revenue streams from different services

    2. Break down the costs to different cost centers & map costs to activities

    3. Match the revenues with costs using the activity links

    4. Remove non cost items like discretionary costs, sunk costs

    5. Remove non operating revenues like interest received, miscellaneous income

    6. Add risk premium to cover inherent risks in the project

    7. Identify and quantify cost drivers

    8. Match cost pools with suitable cost drivers

    9. Decide on suitable allocation keys and apportion costs to objects

    10. Compare cost of each service group with revenues generated and arrive at profitability

    Following cost models can be practiced depending on the size and policy

    A. Variable Cost Approach

    B. Total Cost Approach

    C. Health Care Package Cost Approach

    D. Activity Based Cost Approach

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