Measuring Diagnosis and Patient Profitability in Healthcare: Economics Vs Ethics

Th is paper focuses on issues relating to gauging profi tability under circumstances in Czech healthcare organizations. At present, the trend in healthcare management is for more frequent utilization of advanced economic and cost accounting tools. Th ese qualitatively improve the decision-making process in healthcare establishments, as well as aiding provision of accurate data on the cost and revenue of the outputs of hospital organizations, such as the various diagnoses and types of patients. Herein the authors present analysis of the profi tability of such patient and diagnose-types (DRG) in selected hospital departments of Czech regional hospital. Revenue from insurance payments is compared with costs calculated via the Activity-Based Costing method so as to discern more accurately the proceeds of a given DRG and patient. Th e results of the study highlighted crucial diff erences between the income generated by individual cost objects (i.e. patients and DRGs). Utilizing such information could greatly benefi t decision-making and enhance cost eff ectiveness of the hospital services. However, any healthcare establishment worldwide is strictly curtailed in this by the ethical standards it must uphold when making decisions on potentially raising profi tability. Th e fi nal part of the study discusses the fi ndings of the profi tability analysis performed by the authors in the given context of general healthcare organizations management.