About the Book Code Blue, McDermott & Stocks Accounting Version
Mar 26, 2015
About the Book
Code Blue, McDermott & StocksAccounting Version
Learning Objectives
• Understand the format and purpose of a textbook/novel
• Introduction to service industry accounting
• Introduction to the healthcare industry
• Review of employment opportunities
Introduction to Text
• Format is textbook/novel– Novel section (pages 15 - 171)
provide background on industry necessary in understanding service industry accounting
– Supplement section (pages 172 - 253) provide technical material on design of service industry cost accounting
Introduction to Text
• Format is textbook/novel– Learning in context– Material is more interesting and
therefore easier to understand when presented in a real-world framework
– People understand theory when attached to a story that illustrates the principle
Introduction to Text
• Exercises and problems are found on McDermott’s web page.
Introduction to Text
• Medical, Economic and Accounting Terms used in Text --page 254
• Abbreviations used in the text--page 262
• Cast of characters--page 13
Why Service Industry Cost Accounting?• In 1954 the number of jobs in
service industries passed the number in manufacturing
• Services industries presently constitute 75% of the economy
Why Service Industry Cost Accounting?• Price competition is driving many
service industries to costing systems– In recent years, hospitals alone have
spent in excess of $4 billion designing and implementing cost accounting
• Service industry cost accounting is different from the traditional manufacturing cost accounting
Why illustrate with a hospital cost accounting case study?• Hospital cost accounting is
relatively new and addresses issues such as quality, ABC costing etc.
• Hospital cost accounting is the most comprehensive of the service industry cost accounting systems– Principles learned can be applied to
other service industries
Why illustrate with a hospital cost accounting case study?• The health care industry provides
many opportunities for accountants– It is currently the largest industry in
the U.S.– It is bigger than the second and third
industries combined (Education and Defense)
Employment Opportunities
• Consulting--one of the fastest growing consulting fields in the country
Employment Opportunities
• Financial Accounting--prospective reimbursement has made healthcare one of the most complex areas in revenue recognition
• Cost Accounting--developed in the early 1980s with the introduction of prospective reimbursement– New and exciting job opportunities
Hospitals are big business
• It is not unusual for a regional medical center to have in excess of– $250 million annual operating budget– 2,000 employees– 60+ revenue and cost centers
The End