Management accounting and healthcare Essay Example | Topics and Well Written Essays - 3000 words

Management accounting and healthcargon - Essay ExampleThis paper talks about the fundamental interaction of research in counsel accounting and the healthcare sector. With the availability of a adequate body of literature from various journal articles the paper snapes on a physique of complex and important aspects of the topic in terms of accounting management risks, costs, commandments as well as existing opportunities in the dynamic purlieu of the healthcare sector. Furthermore the potential the health sector holds as far as management accounting research hold is discussed and facilitated with the description of the current developments in healthcare.Research in the management accounting of the health care sector primarily comprises of investigating the accounting and the control systems that are used by decision makers indoors the organization. A key component of the research in the accounting and healthcare sector is that which revolves around the cost associated with the e veryday operations that are undertaken by these organizations. The rich body of literature available in this area has focused on a number of complex and important problems that arise in budgeting, contracting, cost accounting, management and reporting (Luft and Shields, 2003). Extant literature in the field of accounting published primarily approach the issue using an economics based theoretical framework, and focus on the study for-profit organizations. This paper discusses the distinct advantages and research opportunities offered by the healthcare industry that can be used by management accounting researchers. We reflexion at the scope as well as the role played by the accounting practices mainly centered on cost management and risks in the healthcare sectors. Then we feeling at the implications of cost shifting and revenue constraints by hospitals operating in a changing regulatory environment and the push that competition has on the need for accounting information. Next we v iew the advantages of using healthcare data for management accounting research. In the last section we look at the current development in the health care industry. Opportunities for Managerial Accounting Research in Health Care A setting that comprises of organizations with a large number of attributes as well as diversity provides researchers with considerable potential to study complex issues. The health care sector which consists of a raft of hospitals in every country in the world has prevalent attributes such(prenominal) as multi dimensional objective functions, complex production functions and a huge number of diverse stakeholders. Furthermore major shifts in the regulation of this sector can be observed in the way it has moved from cost plus to flash-frozen price reimbursement in many countries namely UK, Germany and Taiwan. Most notable is the move of the focus of competition from non price factors like eccentric to price-and-cost based competition, showing a major altera tion to not only the revenue functions but also financial risk. Due to these changes the various aspects of hospital accounting, reporting and control systems are completely impacted. This can simply be seen when you view the dilemma that surrounds health care contributing to both regulatory and normative pressures. It is required that hospitals provide patients with the best quality care regardless of their ability to pay while on the other hand it is imperative that they remain financially viable. This dilemma adds complexity to other aspects such as motivation, compensation, and evaluation of performance by hospital managers. If we view the aspect of compensation in isolation we will notice another critical factor contributing to its complexity. This being ownership types such as non profit, for profit or public providing the same service and competing for the same customer base (Dranove, 1988 Hoerger, 1991 Pauly and Redisch, 1973). There are three distinct aspects of the healt hcare sector which have a great influence on behavior as well as outcomes. These are regulation and competition, contracting and