The Growing Importance of Cost Accounting for Hospitals Nathan Carroll, PhD, Assistant Professor and Justin C. Lord, PhD* Nathan Carroll, Department of Health Services Administration University of Alabama at Birmingham USA; Contributor Information. "corresponding author: Email: justin.lord@lsus.edu Questions to answer for assignment- Copyright notice 1) What is activity- based costing designed to do per the article? 2) Based on the article, if you were a hospital, would you choose to implement activity based costing or traditional costing and why? Abstract Management scholars have identified several cost accounting methods that provide organizations with accurate estimates of the costs they incur in producing output. However, little is known about which of these methods are most commonly used by hospitals. This article examines the literature on the relative costs and benefits of different accounting methods and the scant literature describing which of these methods are most commonly used by hospitals. It goes on to suggest that hospitals have not adopted sophisticated cost accounting systems because characteristics of the hospital industry make the costs of doing so high and the benefits of service-level cost information relatively low. However, changes in insurance benefit design are creating incentives for patients to compare hospital prices. If these changes continue, hospitals' patient volumes and revenues may increasingly be dictated by the decisions of individual patients shopping for low-cost services and as a result, providers could see increasing

The Growing Importance of Cost Accounting for Hospitals Nathan Carroll, PhD, Assistant Professor and Justin C. Lord, PhD Nathan Carroll, Department of Health Services Administration University of Alabama at Birmingham USA: Contributor Information. "corresponding author:Email: justin.lord@isus edu Questions to answer for assignment- Conyright notice 1) What is activity-based costing designed to do per the article? 2) Based on the article, if you were a hospital, would you choose to implement activity based costing Abstract or traditional costing and why? Management schol What are some sogts associated with implementing a costing system per this, article? Management scholars have identified several cost accounting methods that provide organizations with accurate estimates of the costs they incur in producing output. However, little is known about which of these methods are most commonly used by hospitals. This article examines the literature on the relative costs and benefits of different accounting methods and the scant literature describing which of these methods are most commonly used by hospitals. It goes on to suggest that hospitals have not adopted sophisticated cost accounting systems because characteristics of the hospital industry make the costs of doing so high and the benefits of service-level cost information relatively low. However, changes in insurance benefit design are creating incentives for patients to compare hospital prices. If these changes continue, hospitals' patient volumes and revenues may increasingly be dictated by the decisions of individual patients shopping for low-cost services and as a result, providers could see increasing The Growing Importance of Cost Accounting for Hospitals Nathan Carroll, PhD, Assistant Professor and Justin C. Lord, PhD Nathan Carroll, Department of Health Services Administration University of Alabama at Birmingham USA: Contributor Information. "corresponding author:Email: justin.lord@isus edu Questions to answer for assignment- Conyright notice 1) What is activity-based costing designed to do per the article? 2) Based on the article, if you were a hospital, would you choose to implement activity based costing Abstract or traditional costing and why? Management schol What are some sogts associated with implementing a costing system per this, article? Management scholars have identified several cost accounting methods that provide organizations with accurate estimates of the costs they incur in producing output. However, little is known about which of these methods are most commonly used by hospitals. This article examines the literature on the relative costs and benefits of different accounting methods and the scant literature describing which of these methods are most commonly used by hospitals. It goes on to suggest that hospitals have not adopted sophisticated cost accounting systems because characteristics of the hospital industry make the costs of doing so high and the benefits of service-level cost information relatively low. However, changes in insurance benefit design are creating incentives for patients to compare hospital prices. If these changes continue, hospitals' patient volumes and revenues may increasingly be dictated by the decisions of individual patients shopping for low-cost services and as a result, providers could see increasing