Development of an HMO Cost Management System

Research in Healthcare Financial Management, Vol. 8, No. 1, 31-41.

Posted: 8 Nov 2016

See all articles by Raef A. Lawson

Raef A. Lawson

Institute of Management Accountants

Date Written: October 18, 2003

Abstract

A large HMO's financial reporting system was geared solely to providing information needed for external regulatory reporting. The system was unable to provide the information needed to effectively manage the HMO's health centers and their constituent medical departments. This paper describes the development by the HMO of a new financial reporting system designed to provide the detailed information needed to manage its health center operations. Design of the system required consideration of appropriate ways to measure departmental revenues, resolve information system issues, and allocate expenses to departments. The new system provided health center administrators with a tool that enabled them to focus on improving the organization's decision making and its cost effectiveness.

Keywords: health care, HMO, activity based costing, performance management system

Suggested Citation

Lawson, Raef A., Development of an HMO Cost Management System (October 18, 2003). Research in Healthcare Financial Management, Vol. 8, No. 1, 31-41.. Available at SSRN: https://ssrn.com/abstract=2854540

Raef A. Lawson (Contact Author)

Institute of Management Accountants ( email )

10 Paragon Drive
Montvale, NJ 07645-1760
United States
2014741532 (Phone)
2014741603 (Fax)

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