Authors : Enaam Almusawi, Akeel Almagtome and Ameer Saheb Shaker
Abstract: This study examines the impact of lean accounting information on the financial performance of healthcare institutions. Specifically, it analyzes the impact of value stream costing as a lean accounting tool in improving the financial performance indicators of healthcare institutions based on a case study applied in a private hospital. A quantitative case study approach is carried out to assess the financial performance measures under the traditional costing system of the case hospital. The quantitative analysis is also used to identify how the implementing of value stream costing in the case hospital affects the financial performance measures. The findings show that implementing the value stream costing enables managers to distinguish between the value added activities and non value added activities and consequently eliminating the waste and saving the available resources for more effective using. Therefore, the healthcare managers can utilize the lean accounting information to determine the real cost of their services and then improve the financial performance indicators. The study also shows that the analysis of activities into value added and non value added activities allow the managers to improve the competitive advantage by utilizing the cost reduction gained by value stream costing to set a lower price for their services. This study fills up the gap in the literature on the financial performance of healthcare institutions, since, there is a little literature discussing the relationship between value stream costing and financial performance in the healthcare setting. It also provides the healthcare administrators the necessary information to improve both of competitive advantage and financial performance by revealing the real cost of the hospital’s services.
Enaam Almusawi, Akeel Almagtome and Ameer Saheb Shaker, 2019. Impact of Lean Accounting Information on the Financial performance of the Healthcare Institutions: A Case Study. Journal of Engineering and Applied Sciences, 14: 589-599.