One can contact Macula Healthcare (drmadhumalathi@hotmail.com) to get an insight on the services of the firm. Visit us at www.maculahealthcare.com for more details.

1. Why hospitals has to move towards cost accounting? Management
Perspective
Keywords
 Hospital cost accounting
 Service Margin in Hospital
 Cost Reduction in Hospital
 Decision makers in Hospital
 Competitors profiling in Hospital
Cost accounting in Hospitals is the trend in the recent past and the top three reasons why the
hospitals has to practice this are
1. Derive service margin - As a service provider, it is very important for the hospital to
understand what is the margin in each of its services. All these years, the pricing of the
services were done based on the competitors profiling. As the competition increases,
many hospitals cut their prices to kill the competition. Some hospitals, who set prices
based on the competitors profiling, will get hit and hence loose the competition.
2. To reduce cost - If one understands the cost and the margin in any given service, they
can play around with the cost heads to increase the margins. Since hospital is resource
intense organization, optimizing resources will increase the margin.
3. To take decisions on services with poor margin - Some clinical services which has less
margin, can be thought of outsourcing so associated over-head costs can be eliminated.
Cost accounting will help the decision makers to take a call on such services.
Hospital consultants with experience in Hospital finance, will help the hospitals in streamlining
the process of activity based costing of each and every services. This will be a baseline
documentation for the decision makers and strategists to prioritize and drive the hospital to
attain profitable financial health at the earliest.
When you come up with a hospital project, it is better to compare the pricing across other
hospitals and fix a price based on the population, their expectations and the services what you
intend to offer. But once the hospital is functional, slowly the management should entrust a
specialize team to understand the cost-accounting. There will always be threats from the market
in terms of price war and one should be always ready to tackle such situations. Also, cost
accounting is a lengthy process and an average it may take 3-4 months to complete.
Macula Healthcare is a hospital consulting firm & with vast experience in Hospital finance,
offers end to end consulting services in cost accounting. We can take up the complete
assignment and come out with a baseline document. It will help the hospital to play around
with the competing environment, without affecting the cost of services.

2. One can contact Macula Healthcare (drjithendrakumar@hotmail.com) to get an insight on the
services of the firm. Visit us at www.maculahealthcare.com for more details.