Research On Budget Preparation Of Public Hospitals Based On Activity-based Budgeting

Since the 1990 s, the public welfare of medical treatment is continuing fading as public hospitals are becoming over-marketized, which led a series of problems in doctor-patient and nurse-patient relationships. To ensure the people’s livelihood, the new reform of medical system has been carried on to lighten patients’ financial burden, besides, the new financial regulations for public hospitals has been issued to help them achieve their strategic objectives through upgrading financial management especially through enhancing budget management. In our country, public hospitals are public institutions. Budget management of public institutions is executed by the ministry of finance in order to allocate financial funds and to supervise the use of the money. As the intratype competition intensifies, traditional budget management has been unable to meet the needs of public hospital development. As a starting point for budget management, the preparation of the budget, which will directly affect the accuracy and reasonableness of the budget control and fairness of the examination. But nowadays most hospitals are still using zero-based budget method, which not only cause many disadvantages, but also limit the developing vision of public hospitals. As a result, it is very necessary to develop a new budgeting method for public hospitals.Based on the actual situation of our country, this research applies basic ideas of activity-based budgeting and designs a new budgeting model for public hospitals in China by taking W hospital for example. The result turns out that activity-based budgeting is available in Chinese public hospitals. Activity-based budgeting can not only conducive to the fine management within the hospital departments, but also provide a detailed basis for funding. This budgeting model is worth learning by other hospitals for its feasibility and scientificalness.