Effectively designing costing systems for hospitals in the United States

Authors

DOI:

https://doi.org/10.58593/cjar.v3i1.35

Keywords:

activity-based cost accounting, strategic management accounting, healthcare costs, healthcare management, pricing strategies, cost negotiations, artificial intelligence

Abstract

This generic qualitative inquiry research study addressed the U.S. healthcare industry’s need for a costing system. Costs fluctuate based on patient needs and physician choices, hindering competitive pricing strategies and revenue management. The perspectives of accounting, finance, IT, and operations hospital leaders (N = 9) with at least 1 year of experience were explored regarding effective strategic management accounting techniques to enhance and improve financial and operational performance in U.S. healthcare. The study found that competitive pricing, patient convenience, hospital complexity, technological investment for patient retention, cost analysis, cost optimization, revenue optimization, and negotiation power were general costing system foci.

The study’s findings included recognizing the business challenge many hospitals face in accurately determining the costs associated with delivering a specific healthcare service and effectively allocating those costs. Costs vary depending on the patient’s needs and the decisions made by the attending physician. Developing a competitive pricing plan holds promise in reducing hospital costs and effectively addressing revenue needs. The data showed that hospital complexity, lack of automation, negotiation power, competitive pricing strategies, and changes in regulatory status play a role in managing direct and indirect hospital costs. Artificial intelligence (MAXQDA and ChatGPT) played a role in the data analysis in this study.

Author Biography

  • Dr. Debra Lee Ann Pierre, Capella University

    Dr. Pierre is an Associate Retirement Benefits Examiner in the Service Review unit within the Quality Assurance department at the New York City Board of Education Retirement System, one of the administration and central offices of the New York City Department of Education. Dr. Pierre’s work experience entails ample reconciliations, reviews, data collection, and analysis, all supporting her role in the research process for the topic of her doctoral research study. Dr. Pierre has a Doctor of Business Administration degree with a specialization in accounting, a Master of Business Administration degree with concentrations in business analytics and management, a Master of Science in Accounting and Taxation degree with a concentration in financial and assurance services, a Bachelor of Science in Business Administration degree with an accounting major and a French minor. Dr. Pierre also has an Associate of Arts degree with a  business concentration. In May 2014, Dr. Pierre published an essay, “A Critic’s Point of View,“ in Shell Keeper Volume 6, a Hillyer College Journal of Poetry, Literary Criticism, and Short Fiction at the University of Hartford. New York City, NY. dpierreb@capellauniversity.edu

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Published

08-01-2025

Issue

Vol. 3 No. 1 (2025): CORALS' Journal of Applied Research

Section

Articles

License

Copyright (c) 2025 Dr. Debra Lee Ann Pierre

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

How to Cite

Effectively designing costing systems for hospitals in the United States. (2025). CORALS’ Journal of Applied Research, 3(1). https://doi.org/10.58593/cjar.v3i1.35

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