A Study on Costing of Selected Biochemistry

A Study on Costing of Selected Biochemistry Investigations in a Teaching Hospital

Libert Anil Gomes, Sybil Fernades, Priya M. DﾁfSouza

Abstract :

A hospital laboratory service is an economic asset to the hospital since it is an income generating service. Cost accounting is a financial management tool, which helps to assess the efficiency and effectiveness of the services provided. The study was focused on analyzing the different categories of costs involved in conducting biochemistry investigations and also on assessing the adequacy of prices charged. Five investigations among 40 different types wee selected for the study. The total costs obtained and the prices charged shoed that the hospital has adopted market-based pricing policy and also that the costs are covered.

Keywords : cost accounting, biochemistry investigations, direct costs, indirect costs, pricing

Introduction

A hospital is a cost intensive organization and the cost of hospital based medical care all over the world is rising out of all proportions1. Managing hospitals being a complex task and providing medical care being its primary responsibility, it has become very important to look at the financial viability and upkeep of the hospital. As administrators, the two most important resources one has to look after are finance and human resources2. Management requires adequate, systemic and useful cost data and reports to manage a business or a service oriented industry and achieve its objectives. Cost data assists management in determining and analyzing the costs of departments, processes, jobs, products, controlling costs, making revenue decisions, making special cost studies and investigations vital in formulating policies.

Conducting cost analysis help hospitals understand how much it costs them to provide healthcare services. The information obtained from a cost analysis also help the organizations operate more cost effectively3. Cost analysis of various health services and institutions...