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Making Sense of Cost Accounting Information in Malaysian Private Healthcare Settings: A Comparative Case Study

23 December 2019
27 January 2020
14 February 2020

Zubir Azhar

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Managing expensive resources is indeed challenging, especially with the presence of high organisational and market expectations. In the context of healthcare industry operated by private hospitals, this claim holds true given the complexity of healthcare activities and the ever-rising operational costs. Thus, establishing sound decision support systems is deemed crucial to support their day-to-day activities. In view of these, this paper unravels how two private hospitals in Malaysia (disguised as Hospicer and Hosvista) make sense of cost accounting information in two major accounting functions, i.e., pricing and cost controlling. It also examines the power struggle between the two groups of decision makers (i.e., accountants and healthcare professionals) in discharging these functions. Using semi-structured interviews, documentary analysis, and observation, this paper analyses both hospitals by relating the ways in which these groups use cost accounting information derived from in-house decision support systems to make informed financial decisions in each hospital. The results suggest that while the cost accounting information has been useful for Hospicer in setting the prices for healthcare services and in controlling the associated costs, it is not necessarily the case for Hosvista. This relates to the role played by the two groups of decision makers, which can be described as either active or passive due to the organisational structure and the power entrusted to them. The paper concludes by discussing the implications of the research findings and possible directions for future research.

Keywords: Cost Accounting Information, Pricing and Cost Controlling, Power Struggle, Malaysian Private Hospitals.


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