This document discusses management control systems (MCS) in the healthcare sector. It notes that healthcare is a multi-player sector that provides a range of services under one roof by diverse providers. Formal MCS in healthcare include strategic planning, budgeting, financial performance reviews, cost accounting, and performance measurement systems. General MCS include controlling strategic alliances, recruiting and training providers, and ensuring an organizational structure that increases productivity. The document emphasizes that physicians and other providers must be involved in strategic planning and incentivized to provide quality care.

1. MCS in Health Care

2. Characteristics of Health Care Services
Multi-player dominated services.
Range of services under one roof.
Diverse service providers . These may range from people actually
providing healthcare and those others in supportive role.
Technical expertise and quality of services form the core of this
sector.
Societal concerns including shortfall of healthcare providers to
the increasing number of people needing the services.

3. Contd..
Increasing advances in technology making healthcare a very costly
service.
Management activities in a healthcare setup is usually overshadowed
by other activities like caring for patients and actually attending to
issues of the patient.
Challenges are increased due to complexities of insurance providers
to this sector.
Important role played by government in healthcare through
government run hospitals, PHCs, etc

4. Various considerations for MCS in
Health Care
GENERAL CONTROLS
• Supervision, recruitment, orientation, and training
practices
• Organization structure
• Strategic alliances
FORMAL CONTROLS
• Operational plans
• Feedback mechanisms
• Performance measurement systems

5. Formal Control Process
Increased importance of strategic planning process especially
more vital to large complex organizations.
It is essential that all the important players like
physicians, consultants play an important role in the strategic
planning process along with the management.
It is essential to plan budgets in advance and for annual basis
and review progress on a time-to-time basis.
Since large amount of information is available control of
operating activities is easy.

6. Contd..
Reviewing of financial performance by reviewing the actual
revenues and expenses with budget and identifying variances and
taking appropriative corrective actions is a key to management
control systems.
It is necessary to have sophisticated cost accounting systems and
service utilization reporting systems to monitor the progress
towards strategic goals and control operating activities.
There need to be performance measurement systems which
would review the activities. Eg: An activity based performance
measurement system which can be use to review the performance
of physicians.
Offering compensation mechanisms in such a way that encourage
the service providers to be motivated and provide quality services
to their customers. These compensation packages can be based
on various incentive schemes, bonus sharing, profit sharing.

7. General Control Process
Control process for strategic alliances to manage complex activities
in this sector is an important considerations.
Strategic alliances increasingly include supplier of medical
equipment and other paraphernalia to hospitals for an example.
Strategic alliances with insurance companies for better coordination
towards patient care and setting up control process to monitor this.
Physicians will play an important in choosing the technology or other
related
If there is good integration of these alliances then providing quality
healthcare in a cost effective manner is becomes very easy

8. Contd..
Careful recruitment, selection, and training of health care
providers.
Orientation and training of new service providers to develop long
term robust health services. Eg: Developing and training new
physicians for a long term association of patients with a particular
hospital or clinic.
Organizational structure and culture contributing to increased
productivity and control mechanisms to measure the productivity
at various levels.