Accounting Notes Accounting in the New Public Sector Notes
AC310: Management Accounting, Financial Management and Organizational Control - Module 4 (Accounting in the New Public Sector).
These notes cover the final module of the AC310 Management Accounting course at LSE which covers the following topics: Management accounting and financial management in the 'New Public Sector', including performance measurement, cost accounting, cost management and pricing; the roles of accounting controls in the health system reforms in the UK and elsewhere.
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The information provided by casemix information systems mobilises new categories for construing medical activity (Bloomfield, 1991)
Can link IS usage to module 1 and the potential for outsourcing, improvements in IT, cloud computing etc.
Renders the work of clinicians visible and susceptible to intervention by management
Despite the perceived benefits of using casemix information for clinical audit and accountability, casemix information has tended to be used in the financing of health services and in the internal management of resources (Bloomfield et al., 1994)
E.g. New Zealand and Australia
Used to observe volume, cost of activity and to improve the technical efficiency of hospital service delivery
Doolin focuses on the New Zealand Crown Health Enterprise Central Health
A computerized resource utilization system, linking costs to clinical activities
Emphasis shifted from generating financial information to distributing clinical casemix information
Foucault (1981) – power is viewed as both constraining and enabling
Casemix management is the management of clinical activity on the basis of a range of patient categories and the associated differential resource allocation (Bloomfield, 1991)
Evaluation of particular product lines or producing departments in terms of profitability
Enabling more rational decision making on resource allocation
Determination of output levels
Changes in production processes
Performance appraisal of hospital subunits or even individual clinicians
The problem of health care is translated into one of a lack of the appropriate information required to control costs and to enable more efficient use of existing resources
Implicit delegation to IT which involves keeping track of resource usage (Bloomfield, 1995)
Commonly used classification is Diagnosis Related Groups (DRGs)
Classify and group together hospitals in-patients with similar principal diagnoses and treatment protocols, who are statistically similar in their length of stay
Approx. 500 DRGs combines the clinical procedures, nursing care and diagnostic tests typically required to treat a medical condition
Average costs of the technical constituents of ear DRG are determined on the basis of standard costing
New Zealand costing based on comparison with Australian DRG cost data
Chua and Degeling (1991) describe hospitals as a ‘multi-product firm’
Fetter and Freeman (1986) argue that the methods which produce improvements in private firms have potential for similar successes in hospitals
DRGs were developed in the US
Underlying the introduction of casemix management was a belief that much of the hospital’s resource expenditure was due to patient treatment decisions by clinicians
Casemix IS increase the transparency of professional knowledge, expertise and work processes
The deployment of comparative information provides management with both the technology and a rational justification for increased intervention in medical practice (Davies and Kirkpatrick, 1995)
‘the uninterrupted play of calculated gazes’ (Foucault, 1997) hints at the gaming and behavioural effects of monitoring
Bloomfield (1991) suggests that casemix management developments imply a blurring of the boundaries between management and medicine
Active cooperation of clinicians etc is required in the operation of such accounting and control systems designed to monitor medical activity (Coombs, 1987)
Historical financial focus on the casemix project at Central Health meant that clinical utilization of casemix information had been neglected
A quality discourse in an attempt to construct the interests of clinicians as congruent with those of management
Translating the notion of patient care in terms of effectiveness and efficiency
“Effective is your quality”
“If you get into true effectiveness, meaning that your resources are being used appropriately… then you’re going to come...
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AC310: Management Accounting, Financial Management and Organizational Control - Module 4 (Accounting in the New Public Sector).
These notes cover the final module of the AC310 Management Accounting course at LSE which covers the following topics: Management accounting and financial management in the 'New Public Sector', including performance measurement, cost accounting, cost management and pricing; the roles of accounting controls in the health system reforms in the UK and elsewhere.
These not...
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