It is tough to turn a profit consistently with the razor-thin margins of the healthcare industry. To make matters more difficult, many costs are out of your control. Even your variable costs have a limit to their flexibility. Perhaps the only thing fully in your power is the type of software your hospital uses to calculate these costs. So, what are the cost accounting essentials for healthcare organizations, and how can you put them to best use?
The good news? CostFlex’s Cost Accounting software suite will help your healthcare organization regain control over your profitability. Most other cost accounting software is generic and intended for use across a variety of industries. These might “get the job done,” but they fail to factor in all the complications of the healthcare industry.
CostFlex’s software was built with healthcare in mind from the beginning to incorporate all the intricacies unique to hospitals which means less work for you and more precision for your financial numbers — ultimately leading to informed decision making and more profit in the organization’s pockets.
To create this industry-leading software, CostFlex used four essential features that every healthcare organization should prioritize in their cost accounting.
1. Activity Based Cost Accounting
Some consider activity-based costing to typically be one of the most accurate cost accounting methods for hospitals. However, the major drawbacks to the complex understanding needed are successfully implementing the method and a high staffing requirement.
As part of the Cost Accounting suite, CostFlex has developed proprietary Procedure-Level Cost Accounting software to significantly simplify and automate the activity-based costing process.
2. Patient and Service Line Cost Accounting
CostFlex’s Patient and Service Line Cost Accounting software is an essential follow up to your procedure-level cost accounting. Keeping track of each service given to every patient throughout their entire hospital stay can be a logistical nightmare. To avoid overwhelming your systems, you need a tested process to focus on cost accounting essentials for healthcare organizations to avoid overwhelming your systems.
The CostFlex Patient Costing module helps keep it all organized and accurate by rolling services up from the procedure level to the patient level, allowing easier analysis of per-patient profits and losses.
3. Service Line Analytics
Once your costs are rolled up to the patient level, the next step is to organize. CostFlex’s service line analysis and reporting software takes the data and makes it more easily digestible — providing you with accurate and orderly service lines to help make informed decisions.
Healthcare organizations are not monolithic. CostFlex knows that each facility will have unique circumstances requiring a different set of groupings. Our service line management software gives you full control of the patient groupings to create customized service lines and ensure that the data you report is relevant and beneficial to your specific organization.
4. SQL Enterprise DSS Warehouse and Reporting
Cost accounting never ends. Every day that your hospital functions is another day with costs that need documentation and analysis. It can be overwhelming. Once you’ve compiled all this data, what do you do with it?
While the first three cost accounting essentials are used to create and analyze your cost reports, CostFlex’s SQL Enterprise DSS Warehouse and Reporting software focuses on what happens after.
To briefly explain: An enterprise DDS (decision support system) warehouse provides long-term virtual storage for your data-driven reports. These are then accessible using an SQL (structured query language) which is uniquely created with language relevant to the healthcare industry.
Each of these features works in tandem to provide cost accounting essentials for healthcare organizations. CostFlex’s Cost Accounting software also includes turnkey installations, dedicated staff training, and excellent technical support to ensure a smooth client experience.