Business Strategy Business Strategy: Getting to Goal — The Role of Cost Accounting in U.S. Health Systems' Transformation

This IDC Health Insights report discusses the growing importance of cost accounting in U.S. health systems' analytics and IT strategy and important considerations hospitals should make when adopting cost accounting tools. Cost accounting is playing an increasingly important role in U.S. health systems and hospitals, as they make the transformation to value-based care. Cost is one of the key goals for health systems making this transition; the oft-cited triple aim is, after all, to increase access and value while reducing cost. But most cost accounting approaches in healthcare have been minimally effective, and the new emphasis on value-based care in the industry has called them into question, as health systems begin to demand rigorous and accurate approaches to understanding their costs that they can apply to pricing, contracting, operational decision making, measuring outcomes, planning strategy, interacting with payers, and even the value of the care itself when cost is linked to outcome. Providers making cost accounting investments should consider: