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COST ACCOUNTING PROJECT SUMMARY
COST ACCOUNTING FOR HEALTHCARE INDUSTRY IN PR
Executive Summary
Hospitals and health care systems must control costs to survive in today’s challenging economic
environment. Among the key challenges that hospitals are facing is the reimbursement process. This
process is turning the industry to dramatically lower and control their cost structure, while redesigning
waste and delivering outstanding care to patients in order to remain viable.
Although the industry is aware of the need to decrease costs, decision making requires detailed
information and today’s health care system lacks a robust structure of detailed and accurate information.
Investing in the development of a cost structure to manage micro costing within the hospital is critical in
the sustainability of the health care institution.
MEC Consulting Service Group, LLC is a firm with vast experience in the cost, accounting and financial
fields that have designed, developed and implemented a full cost accounting module for a local institution,
positioning the hospital amongst the pioneers that took the challenge to lead the industry for changes.
Business Challenge
To develop a standard cost structure within Meditech’s Cost Accounting Module
 For Micro-costing of procedures
 To monitor cost of procedures
 To evaluate patient, diagnostics and doctor’s profitability
To develop cost accounting reports to measure expected cost of procedures
To train and develop cost accounting personnel
Financial analysis for core operational areas in order to search for opportunities to increase profitability
and manage information for reimbursements from medical plans
Develop reports for analysis of core variances
Solution Description
Designed a tailored costing solution that fits the institution and allows management to have information
for decision making on an accurate and timely manner. The project was divided into phases. Basically
software enhancements, standard cost definition and generation, and reports for analytical use.
First phase of the development included software enhancements:
1. Key modules optimization: Material Management (MM), Emergency Room (ER), Operating Room
(OR), Cost Accounting (CA)
2. Billing & Accounts Receivable (BAR) and MM synchronization
3. OR Preference Cards update
4. Data clean-up to be used in costing

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COST ACCOUNTING PROJECT SUMMARY
CABARMM
Second phase was focused on developing the standards costs. Initially understanding the hospital main
sources of spending and, understand and challenge the costs groups for directs costs, indirect costs and
overhead charges and allocations. Then developing the cost structures for each procedure. And finally,
running the costing process to start generating data.
Final phase was focused on reporting and designing the adequate reporting package that fit the hospital
needs for decision making and negotiations with medical plans. Added value included designing reports
to measure medical staff performance at a patient, procedure and diagnostic level.
Trained and developed cost accounting personnel to understand reports generated, identify key variables
that drive results and timely communication to key stake holders. Also, designed and implemented a
collaborative organizational process amongst hospital areas to support the data flow and capture critical
elements that impact cost of procedures.
Benefits
 Maximize Meditech’s system capabilities and utilization.
Core modules integration:
 Provide information tools that simplify the data needed to negotiate with medical plans at
diagnostic procedure level.
 Influence critical thinking and detail oriented analysis amongst key operational areas.
 Drive decision making by providing accurate, accessible and actionable cost data.

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COST ACCOUNTING PROJECT SUMMARY
Contact Us
For more detailed information about the cost accounting set up or an assessment for your institution,
please contact us at:
mecconsulting@meccgroup.co
Office (939) 336-0027
Maria Elena de la Cruz Echeandia, CPA
President & Chief Financial Consultant
MEC Consulting Service Group, LLC
P. O. Box 367814
San Juan, PR 00936-7814
Office (939) 336-0027
Mobile (787) 237-0980
medelacruz@meccgroup.co
Juan R. Garcia Soto
Senior Financial & IT Consultant
MEC Consulting Service Group, LLC
P. O. Box 367814
San Juan, PR 00936-7814
Office (939) 336-0027
Mobile (787) 397-4707
Juan.Garcia@meccgroup.co