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Cost Management Is the Scientific, Methodical and Process Driven Buzz Word for Sustainability in Healthcare Industry

The Cost Diagnosis

The medical industry is constantly advancing the accuracy of diagnosis for better treatment. A transition from a 64 slice CT scan to 128 and then 256 to 320 slice CT scan produces better diagnosis capabilities. However, when it comes to economic health, industry perception still lies in usual methods to value discount measures. Occupancy and ARPOB is the yardstick and EBIDTA is focused with a top-down approach.

Now, the transformation has begun with distinctive price capping mechanisms globally, whether its DRG prices in the US and the Middle East or GIPSA and Ayushman Bharat price capping in India, insurance and government authorities are dwindling hospital revenues. Patient fee will not be driven by market competition. Providing quality healthcare with continuously growing cost and competition will be challenging. Financial sustainability will be endangered for high-cost model hospitals.

Governments, as well as Hospitals, are juggling to preserve a stability between Hospital survival and inexpensive Quality Health services. Futuristic hospitals and insurance companies are thriving for sustainable and scientific solutions. Critical financial fitness is annoying detailed and improve diagnosis.

The solution lies in altering the understanding of healthcare management. Like any other industry, healthcare has to change its profitability management on bottom-up strategy i.e. Cost. Total Cost of care for every affected person and every method is essential for DRG pricing. A Hospital having real-time value data for its each and every affected person and service can declare higher pricing from the insurance companies if they have scientific cost management in place. Accuracy of diagnosis of underutilized assets and non-value added activities can lead the fitness system closer to a affordable entity.
Currently, most fitness system leaders manipulate utilization, cost, and revenues at the department level (Financial Accounting).
Departmental and charge item cost data may be useful to run a department, however it is no way to run high-performing health, in the long run. Physicians make ordering decisions at the patient level; hence, if medical and operational behaviours are to be monitored and modified, fee and profitability analysis ought to additionally happen at the patient and service line level. Knowing the fee is essential however understanding the accurate value is more essential for decision making. Activity-based costing is the internationally acclaimed solution for health service costing upto most accuracy.

Benefits of Service Line Costing & Profitability Analysis
Shifting the business decision from financial accounting (department-level) to cost accounting (patient-level) renders extra beneficial profitability information, answering questions such as:

What level of sources (inputs) has traditionally been consumed to supply patient care (outputs)?

What do these resources value when a product or service is delivered?

Are Revenues masking Costs?

What are the drivers of these costs?

Variability in Cost of Care for Hospitals? Physicians? Patient Types?

Costs for Episodes of Care & Continuum of Care (Claims Analysis)?

Costs by Family Unit? Geographic Zone? Age Group?

Profit by Payer, Service Line, Patient Type, Physician, DRG, Procedure, Diagnosis

Volume to Value-Based Management

When expertly implemented, the layout of a cost accounting gadget is a decidedly interactive process, involving contributions from each medical and financial leaders. This consequences in more correct and relied on data, and consequently a high level of adoption throughout the health system.

The evolution from quantity to value-based healthcare management and DRG pricing can lead to the sought-after harmonious goals of financial sustainability AND elevated patient outcomes. This can only be carried out by using advanced costing methodologies to produce an correct accounting of the real value of care at the procedural, patient, service line, and DRG levels. Australian public healthcare has broadly applied the activity-based costing for ideal utilization of its health resources and the success of its public health system is an illustration for all over the world. It is excessive time for Middle-east to undertake Service line Costing as the base of its Health Economy.


Medi Q Healthcare Group is a unusual name in the Healthcare Industry offering personalized products and services catering to all segments in healthcare throughout the globe. Costing experts, Ms. Christie Scanlon and Ms. Latesh Sen, both seasoned CMA with more than 22 years of experience, have designed a range of cost models and strategic pricing structures for health systems other than automation of healthcare price accounting systems in many hospitals. Mr. Bidhan Chowdhury, a properly skilled healthcare enterprise leader with validated track record of delivering worthwhile commercial enterprise boom & profitable new alliances at leading healthcare companies in India and Middle East is the CEO of the Group




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