The folly of using RCCs and RVUs for intermediate product costing.
Two measures for computing the cost of intermediate projects--a ratio of cost to charges and relative value units--are highly flawed and can have serious financial implications for the hospitals that use them. Full-cost accounting, using the principles of activity-based costing, enables hospitals to measure their costs more accurately, both for competitive bidding purposes and to manage them more effectively.
Young
David W
DW
Boston University School of Mangement, The Crimson Group, Inc., Cambridge, MA, USA. DavidYoung204@cs.com
D000066:Accounting / Q000379:methods*; D003365:Costs and Cost Analysis / Q000379:methods; D005377:Financial Management, Hospital / Q000458:organization & administration; D017721:Hospital Costs; D015895:Relative Value Scales; D014481:United States