Cost Centers in Health Care Hs440

A cost center is a department in an organization that categorizes the surplus, administrative costs, general overhead, salaries, supplies, equipment, direct and indirect costs, educational outreach programs, and many other areas of needed upgrading and development. They are established in the larger companies to identify and account for responsibility and controlling costs (The Free Dictionary, nd). In other words they are a responsibility center that can be a division, department, or office that includes, but not limited to, billing, collections, medical records, laundry, dietary expenses, salaries, and so on. Each department has its own director who then gathers the costs of that department and gives it to his CEO (Baker et al, 2006). Therefore, the larger the organization, the more cost centers will be operational. Also depending on which are revenue producing or more concerned with surplus and expenditures, the centers will be divided among groups. Some would be divided into nursing and other professional services, or it could be categorized into general and support services (Baker et al, 2006).

A support center is more focused on the responsibility of expenditures. While the responsibility center is concerned with revenue and volume and the expenses of each program, department, unit, or division (Baker et al, 2006). There is a manager that is in charge and accountable for these profit centers regarding controlling costs and generating revenue/volume (Baker et al, 2006).

There are many pro v cons when it comes to grouping diagnoses and procedures. Many physicians use a decision tree, then from there go to trial and error. At least until there is a technical program that will go through all that work for them. However, each patient is unique as with each organizational standards and quality of care. Depending on how firm they are on their patient's well-being versus profits and stakeholders' happiness, I think that this cannot be explained in short. However,...