Procedural cost accounting: a survival tactic.

With the recent introduction of PPS and DRGs, nonprofit institutions in our industry have had to make major modifications in their methodology for fiscal soundness. One area that must be addressed is cost accounting and, more specifically, procedure cost accounting. Many hospital department managers have no formal training or education in cost accounting. Likewise, very few physicians receive cost-accounting training in their residency programs. Therefore, in the past, there has been little emphasis on this fiscal procedure. Cost accounting is the recording and classifying of the price paid for anything. The costs associated with a specific procedure are assembled into categories and compiled into a base figure with any additional indirect components or overhead costs taken into account. The resulting figure is then corrected for the institution's collection rate to assure complete recovery of all costs. This method is by no means the answer to every organization's needs; however, it is a starting place for managers. Radiology managers can improve upon this worksheet as their knowledge and understanding of the fiscal side of the hospital continues to grow. With more accurate methods for determining costs, managers can incorporate these into the process. The result will contribute to the final goal, a more efficient and cost effective operation.