The Research On The Application Of Activity-based Costing In Coot Management Of Hospital

Since the mid-1980s, Robert S. Kaplan and his PhD candidate Robin-Cooper put forward Activity-based Costing (hereinafter abbreviated as ABC) to replace the outdated quantitative cost accounting system. In the late1980s, some of the advanced manufacturing enterprises in western countries began to adopt ABC system on the basis of traditional costing method. Its theoretical basis is: production incurs activities, products consume activities, and activities consume resources, thus resulting in costs. Traditionally, accountants tend to presume or treat those similar yet quite different subjects or items as the same item of manufacturing costs, allocating all sorts of costs into different subjects based on a certain quantity. With this relatively rough costing model, usually, the cost accounting may be undesirable or unconvincing for the sake of incomplete information, incomprehensive control, inadequate operability, unscientific calculation and other issues, and it most directly results in:increased project costs, unclear pricing of products or services, ill-defined staff salaries, unfair and unreasonable. Compared with the traditional costing method, the primary advantage of ABC lies in the fact that it can correct the incorrect, unfair and unreasonable allocation of costs mentioned above. Through ABC method, it is expected to correctly reflect the real costs of each product or service, and avoid the cross-subsidies to product costs. ABC focuses on the identification, analysis and classification of activities, and then chooses the most appropriate cost driver for each manufacturing cost as the basis for manufacturing cost allocation. Only after product costs are clearly and correctly identified can sensible decisions be made.In recent years, the competition among enterprises is getting increasingly fierce. In the era of low margin, it has become a primary problem for the management of enterprises to reduce the cost of products and services in a most effective way, to make use of resources rationally, to improve the competitiveness. Thus, pioneers in many industries have taken the lead to study and adopt ABC on the basis of the original cost accounting methods. With the wider and wider application of ABC in Enterprises, this method has gradually been used in many other non-manufacturing industries, such as financial services, government agencies and service sectors. As early as in the early1990s, Western countries began to introduce ABC from manufacturing enterprises into services, health care and other industries, and try to use ABC method in cost accounting for some medical projects in certain hospitals accounting. The ABC method has found more and more application in hospitals over time. Currently, cost accounting methods in Chinese hospitals are still quite rough, that is, the cost and time consumption and allocation are reflected in checking afterward. There is always not a good way to judge whether the costs are reasonable and costs can be controlled, thus failing to achieve the purpose of further control costs.Based on the survey and the status quo, this thesis elaborates on the feasibility and the application of applying ABC in public hospitals. The thesis highlights the specific method of ABC accounting in hospitals:"categorizing the hospital activities—determining the motivation of activities—allocating the costs of activities—calculating the total costs—the actual accounting of costs" To explore the feasibility of application of ABC in Third-level grade-A hospitals, and check whether the accounting results are more accurate, the thesis also studies the cases of applying ABC in the medical department and surgical department of a public Third-level grade-A hospital. In addition, this thesis also finds that, ABC can be either used as a supplementary means or a substitute for the current accounting methods used in hospitals.This thesis is divided into six parts:Part One is introduction, mainly about the background, the implication, and the research methods. The second part introduces the basic theory of ABC, including the basic concepts and principles of ABC and the application of this method at home or abroad.Beginning with an analysis of the key issues in the implementation of ABC in hospitals, Part Three lays out the steps taken to adopt ABC within hospitals. This part also serves as an introduction for the case in the next part.The fourth Part is the core of the thesis. In this chapter, theory and practice of ABC are combined in the case study of ABC adopted in a Third-level grade-A hospital.The fifth part is about the effects and experience of ABC adopted in a Third-level grade-A hospital, which confirms that ABC theory can be well applied in hospitals.The sixth part is conclusions, together with the potential or possible deficiencies of the thesis, and some recommendations for perfection and improvement.