There are no prerequisites.

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Course Description

This thoroughly revised new edition of Management Accounting in Health Care Organizations provides management accounting concepts and techniques to help prepare students for managerial work in health care. Using introductory-level instruction and a user-oriented approach, the new edition includes information regarding the role of management accounting in health care organizations, and covers the impact of the Affordable Care Act on managerial responsibilities, recent changes in operational budgeting practices - including a focus on 'budget drivers,' the importance of managing the revenue cycle, and other factors that have fundamentally altered the use of management accounting in health care organizations over the past several years.

Throughout this course, the author introduces concepts and techniques that will help students identify, analyze, and apply key management accounting principles. The use of practice case studies at the end of each chapter allows students to master the techniques rather than simply memorize them.


David W. Young

David W. Young is a professor of management, emeritus, at Boston University (BU) School of Management, where he was nominated four times for BU's prestigious Metcalf Award for teaching excellence. While at BU, he taught undergraduate, MBA, executive MBA, and executive nondegree courses on financial accounting, management accounting, and responsibility accounting systems. His courses were taught in for-profit, nonprofit, and health care contexts.

In addition to his teaching and service awards, David has received several research awards, including "best article of the year" from both the American College of Healthcare Executives and (three times) the Healthcare Financial Management Association.

David earned a BA from Occidental College, an MA in economics from the University of California, Los Angeles, and a doctorate from Harvard Business School. He was selected to be a Milton Fund Fellow at Harvard Medical School, and he was elected to Beta Gamma Sigma (the national honor society for accredited business programs).

Course Specifics

Oct 3, 2018
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Identify four forces that are affecting health care costs
  • Cite five drivers of health care costs
  • Recognize alternative ways to address the drivers of health care costs
  • Recall the nature of the health care 'food chain' and its implications
  • Identify the effect of the Affordable Care Act on health care costs

Chapter 2

  • Identify the potential uses of full-cost information
  • Recognize the relationship between full-cost accounting and the economist's three factors of production
  • Note the concepts of cost object, cost center, direct and indirect costs, overhead, and cost allocation methods
  • Recognize differences between mission centers and support centers
  • Cite alternative ways to allocate support center costs into mission centers so as to determine each mission center's full cost
  • Define the link between full-cost accounting information and pricing decisions

Chapter 3

  • Define fixed, variable, step-function, and semivariable costs
  • Note the uses and limitations for cost-volume-profit (CVP) analysis
  • Identify the special considerations involved in preparing a CVP analysis
  • Cite differences between unit contribution margin and total contribution

Chapter 4

  • Note the rationale for the statement, 'Different costs are used for different purposes'
  • Recognize differences between full costs and differential costs, noting when each should be used
  • Define the role of sunk costs in alternative choice decision making
  • Recognize the role of allocated overhead cost in alternative choice decision making

Chapter 5

  • Recall additional cost accounting terminology
  • Identify health care's stage 2 cost accounting challenge
  • Define the concepts of activity-based costing and overhead cost drivers
  • Note the distinctions among facility-sustaining, product-sustaining, batch-related, and unit-level activities in an activity-based costing system
  • Recognize the usage of multiple overhead rates in attaching manufacturing overhead to products during stage 2

Chapter 6

  • Recognize the relationship between cost accounting and responsibility accounting
  • Note the defining characteristics of a responsibility center, different responsibility center options, and the basis for choosing one type over another
  • Identify the four phases of the management control process and the characteristics of each

Chapter 7

  • Note the issues that senior management must consider if its organization's profit centers are to be most effective
  • Recognize the relationship between the responsibility accounting structure and managers' incentives
  • Identify the role of transfer prices in a responsibility accounting system
  • Identify how matrix-like organizational structures can complicate the design effort
  • Note issues that exist in designing an appropriate motivation process for an organization's employees
  • Recognize the influence informal decision making has on an organization's success

Chapter 8

  • Define payback period, net present value, and internal rate of return, noting their role in programming
  • Identify the issues involved in choosing a discount rate for assessing a capital project
  • Recognize the impact of political and behavioral matters on the choice of capital projects
  • Recall the issues associated with undertaking a benefit-cost analysis, especially when it involves quantifying the value of human life

Chapter 9

  • Recognize the organization context in which operational budgeting takes place
  • Identify the budgeting context, which includes the organization's cost structure, strategic success factors, organizational structure, and motivation process
  • Recall the components of the operating budget and the mechanical aspects of formulating it

Chapter 10

  • Identify differences between the operating cycle and the financing cycle of the cash budget
  • Define the role of an organization's debt structure in cash management
  • Recognize advantages and disadvantages with regards to leverage, noting the distinction between financial risk and business risk
  • State the role of profit as a financing mechanism for the fixed assets and working capital needed to support organizational growth
  • Identify items that are measured in the statement of cash flows

Chapter 11

  • Note the role of a flexible budget in a responsibility accounting system
  • Identify the different types of variances that can occur in a variance analysis
  • Recognize the uses and limitations of variance analysis and the relationship between variance analysis and the reporting phase
  • Classify the criteria for a reporting phase that can communicate action-oriented information to managers
  • Identify issues involved in measuring nonfinancial information and programmatic performance

Chapter 12

  • Specify criteria for a good responsibility accounting system as well as key characteristics of such a system
  • Identify the context in which the responsibility accounting system exists, comprising in addition to the management control process, the activities of strategy formulation, conflict management, motivation, authority and influence, patient (or client) management, and cultural maintenance
  • Note the types of questions that senior management needs to address to be certain that the responsibility accounting system is well designed
  • Recognize the issues involved in managing an effort to introduce a new or redesigned responsibility accounting system

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