DefinePK

Abstract

Purpose: To investigate the perception of private hospitals on taking ABC as a tool to recognize and assign costs.
Design/Methodology/Approach: Structured interviews were conducted with financial managers of private hospitals from which information was gathered using qualitative approach. This method enabled the researchers to gain a better insight into the participants' experiences and beliefs surrounding ABC.
Findings: Cost visibility, financial accuracy, and operational efficiency are the identified beneficial factors in the implementation of ABC. ABC aids in this by providing hospitals the ability to classify their activities into value-added or non-value-added, thereby facilitating decision-making. Nonetheless, with so many hospitals sticking with conventional costing method because they come across as convenient and familiar. The transition to ABC will definitely require initial investment through training and skill in the long run but the long-term benefits of ABC in terms of financial management make it a worthy consideration.
Implications/Originality/Value: The findings of the study show that even though private hospitals acknowledge the advantages of the ABC system for improved financial management, the transition phase/procedure and a resistance to change affect the application of ABC system. Adoption of ABC has the potential to enhance operational efficiency and decision-making in healthcare.