Assignment Questions: Evaluation of Alternative Costing Methods for Improved Hospital Management

1. Calculate the average indirect costs of the three goiter conditions allocated through DAS, RAS, and ABC.

2. Comment on the effectiveness of RAS and ABC in addressing the cost distortion problem of DAS.

3. Which of the three methods is the most effective in hospital management? Suggest potential applications of the selected method.

4. Both RAS and ABC present certain limitations in providing accurate cost information:

a) Can a direct cause-and-effect relationship be observed under RAS and ABC? If not, can alternative cost allocation criteria be applied in the context of KWH?

b) What is the importance of considering the recurrence rate when calculating individual patient costs of different clinical conditions? How should the costs of recurrence be absorbed for individual patients?

c) Can RAS and ABC determine the indirect costs allocated for cases of comorbidities? If not, how should the models be modified?

d) Assume that KWH is overloaded by 20% of the practical capacity due to the winter influenza season. Would the accuracy of RAS and ABC under such circumstances be affected?