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This study aims to provide insights into management accounting changes (MACs) and potential roles of big data analytics (BDA) in accelerating the MACs in an Indonesian public hospital as a response towards the adoption of the diagnosis-related groups (DRG)-based payment system.

A mixed-method approach was used to collect and analyse data from a referral public hospital in Indonesia. First, a BDA simulation was carried out to reveal its usefulness in predicting and evaluating patient costs, and finally improving the cost recovery rate (CRR) of each DRG case. This part formulated and tested the mathematical models that predict patient cost, the CRR and determinants (length of stay/LOS, severity/SEV, patient age/AGE and gender/SEX). For this purpose, data of the top ten inpatient cases of 2018 were collected and analysed. Second, semi-structured interviews with senior staff and doctors were carried out to understand cost control strategies implemented in the hospital and the management and doctors’ perceptions regarding the application of tested mathematical models for cost control. Old institutional economics and new institutional sociology were used to gain insight about how and why management accounting practices changed in the hospital.

The findings show that the absence of detailed per-case/patient cost information has not only hindered further evolvement of MACs but also stimulate tensions between managerial and medical worlds in the studied Indonesian public hospital. The simulation of BDA in this study was not only discovering the determinants of case cost recovery but also enabling the prediction of CRR of patients immediately after admission. The application of BDA and casemix accounting in the hospital will potentially become catalysts of discussion and mutual learning between managerial and medical staff in controlling patient costs.

This paper provides a more comprehensive picture of the potential roles of BDA in cost control practices. The study assesses the feasibility of BDA application in the hospital and evaluates the potential roles and acceptance of BDA application by both management and doctors.

The purpose is to assess the impact of clinical costing approaches on the quality of cost information in seven countries (Denmark, England, France, Germany, Ireland, the Netherlands and Portugal).

Costing practices in seven countries were analysed via questionnaires, interviews and relevant published material.

Although clinical costing is intended to support a similar range of purposes, countries display considerable diversity in their approaches to costing in terms of the level of detail contained in regulatory guidance and the percentage of providers subject to such guidance for tariff setting. Guidance in all countries involves a mix of costing methods.

The authors propose a two-dimensional Materiality and Quality Score (2D MAQS) of costing systems that can support the complex trade-offs in managing the quality of cost information at both policy and provider level, and between financial and clinical concerns.

The authors explore the trade-offs between different dimensions of the quality (accuracy, decision relevance and standardization) and the cost of collecting and analysing cost information for disparate purposes.

This paper aims to understand why an expected enhanced role of accounting in Indonesian public hospitals has not occurred, although serial organizational changes and reform of hospital payment systems have taken place.

This study adopts a multiple case study research approach. It was carried out in two Indonesian public hospitals. Interviews were the main tool used for collecting data. The primary interviewees were the top managers, accountants and senior physicians in the hospitals surveyed.

Insights from the interviews revealed that the owners’ traditional role of funding deficits plus the conventional mindsets of managements and physicians who are only interested in health outcomes have hindered the infiltration of economic and accounting logic into the management of these two public hospitals. Consequently, the expected accounting innovations, i.e. an enhanced role of accounting in the hospitals’ daily activities did not emerge.

This case study is not a longitudinal study and the interviewees, particularly senior physicians, were selected based on their availability and willingness to participate in the interviews. Thus, the findings should be treated with caution.

An enhanced role of accounting and other accounting innovations would indicate that the hospitals are responding as expected to the institutional and financial reforms.

Contingency theory and institutional theory have been used together in this study which aims to not only discuss the reasons for accounting changes occurring or not occurring, but also to understand the motivations behind the accounting changes or lack of change. Thus, a more comprehensive understanding of accounting innovations is expected.

The purpose of this study is to investigate the implementation of a novel organizational structure in a specialized hospital department. The key issue was to optimize the efficacy of the process “hospital treatment” in a patient‐oriented approach.

A new organizational concept, i.e. the Cologne Consultant Concept (CCC), was developed by and implemented at the Department of Neurology, Cologne University Hospital in August 2007. The outcome of this reorganization was evaluated via a number of critical performance parameters (effects on daily routines and performance data, feedback from quality control and house officers). Furthermore, the strengths and weaknesses of this novel system were compared to the traditional ward‐based system in Germany, the Anglo‐American consultant model and care provided by sub‐specialized teams.

The reorganization of the healthcare services by the CCC provided flexible medical care for inpatients. The independent assignment of patients to a ward, and to a team of physicians offered incentives for case‐oriented and efficient medical treatment. Importantly, the time‐consuming admission process could be distributed evenly between physicians in chronological order. Furthermore, beneficial effects on the department's overall performance compared to the traditional ward‐based system were observed.

The CCC constitutes a valuable new organizational structure that can provide medical care in any specialized hospital department.

Attempts to transform health systems have in many countries involved starting to pay healthcare providers through a DRG system, but that has involved managerial workarounds. Managerial workarounds have seldom been analysed. This paper does so by extending and modifying existing knowledge of the causes and character of clinical and IT workarounds, to produce a conceptualisation of the managerial workaround. It further develops and revises this conceptualisation by comparing the practical management, at both provider and purchaser levels, of hospital DRG payment systems in England, Germany and Italy.

We make a qualitative test of our initial assumptions about the antecedents, character and consequences of managerial workarounds by comparing them with a systematic comparison of case studies of the DRG hospital payment systems in England, Germany and Italy. The data collection through key informant interviews (N = 154), analysis of policy documents (N = 111) and an action learning set, began in 2010–12, with additional data collection from key informants and administrative documents continuing in 2018–19 to supplement and update our findings.

Managers in all three countries developed very similar workarounds to contain healthcare costs to payers. To weaken DRG incentives to increase hospital activity, managers agreed to lower DRG payments for episodes of care above an agreed case-load ‘ceiling' and reduced payments by less than the full DRG amounts when activity fell below an agreed ‘floor' volume.

Empirically this study is limited to three OECD health systems, but since our findings come from both Bismarckian (social-insurance) and Beveridge (tax-financed) systems, they are likely to be more widely applicable. In many countries, DRGs coexist with non-DRG or pre-DRG systems, so these findings may also reflect a specific, perhaps transient, stage in DRG-system development. Probably there are also other kinds of managerial workaround, yet to be researched. Doing so would doubtlessly refine and nuance the conceptualisation of the ‘managerial workaround’ still further.

In the case of DRGs, the managerial workarounds were instances of ‘constructive deviance' which enabled payers to reduce the adverse financial consequences, for them, arising from DRG incentives. The understanding of apparent failures or part-failures to transform a health system can be made more nuanced, balanced and diagnostic by using the concept of the ‘managerial workaround'.

Managerial workarounds also appear outside the health sector, so the present analysis of managerial workarounds may also have application to understanding attempts to transform such sectors as education, social care and environmental protection.

So far as we are aware, no other study presents and tests the concept of a ‘managerial workaround'. Pervasive, non-trivial managerial workarounds may be symptoms of mismatched policy objectives, or that existing health system structures cannot realise current policy objectives; but the workarounds themselves may also contain solutions to these problems.

There has been increased interest in expanding the Medicare Prospective Payment System (PPS) to non-Medicare payers to provide incentives for hospitals to contain costs and to concentrate in those Diagnosis-Related Groups (DRGs) which they can provide efficiently. However, this should not force low-volume, low-cost payers to subsidize high cost payers and should not penalize low Length-of-Stay (LOS), low-cost hospitals. This article proposes a new method proportional pricing to expand PPS incentives to non-Medicare payers with equity for payers and hospitals. It would also allow all-payer rate setting and premium price competition among payers to coexist.

Concern over the rising cost of medical care has caused many countries to investigate and implement different methods of cost containment, particularly for hospital services. In the United States, Medicare replaced its ‘cost‐based’ reimbursement system, in which hospital payments were based on the actual costs incurred in treating patients, with a system that pays hospitals a fixed price per case. Under this new system, all hospital discharges are classified into 467 Diagnosis Related Groups (DRGs) or types of cases based on the patient's age, sex, principal diagnosis, additional diagnoses (comorbidities and complications), surgical procedures performed, and the discharge status. During the first three years of the programme, the payment rate for each DRG is a function of a DRG weight (reflecting relative resource consumption), the hospital's historic costs of treating patients in that DRG, and a federally established rate adjusted for urban/rural differences and census region. In the fourth year the price will be based only on the DRG weight and the federally established rate.

The purpose of this paper is to describe the standardization of cost accounting by diagnosis-related groups (DRG) and how specialized medical care has managed this change in Finland.

Qualitative research material was collected over six years to analyze the changes in the standardization process.

It was found that individual actors customize the process to meet their needs. Because the goal of standardization is comparison, the customization does not result in a homogenous national system.

This paper’s limitation is that it focusses on an investigation of the adoption and use of the DRG system in hospital districts. Extending the research from this area to also cover health centres and regional hospitals could provide a broader picture of the use of the system.

Even though the actors report that they are using the DRG, our research illustrates how the same system is used in different ways and for different purposes in different organizations that impacts the original goal of national cost comparability.

This paper’s contribution is to show how the construction of an accounting system takes shape when spreading through organizations and society, and how its homogeneous nature is managed.

This paper aims to discuss the implementation process for the new diagnosis-related groups (DRG) accounting system in the health-care sector, and the struggle to gain acceptance for the system. The emphasis is on the goals and the expected results of the system, and how the system finally becomes an actuality.

The paper illustrates the framing of an accounting system, that is, how the health organization constructs the goals and the purposes of the system during its implementation. The empirical data consist of interviews, newspaper articles and notes from participatory observations.

The goals and the purposes of the new system were not defined ex ante, but rather emerged as supporters of the system found a common language. This commonality enabled the linking of the interests of the hospital managers with the DRG system. At this point, the actual DRG-based systems for the product categorization and the full-cost pricing system became heterogeneous. Making the system visible through discussion entailed seeing the invisible. Seeing the invisible allowed the system to become a reality (national comparability). Visibility helped the DRG system to gain approval and become a stronger system.

This study is an illustration of a unique social process. The study’s applicability under other circumstances should be considered with caution.

The paper illustrates how the purpose of an accounting system emerges and is constructed through the interaction between various actors.

From 2003, each inpatient's stay at a German hospital will be reimbursed according to diagnosis related groups. The former German hospital financing system, which consisted partly of per diem rates and partly of per‐case rates, was abolished in an attempt to increase efficiency in hospitals. This can be seen as the government's attempt to act on the principles of evidence‐based policy. Since there is no strict global budget for inpatient treatment, it is not certain that those diagnosis related groups will actually decrease overall expenditures on hospitals. Also, it is argued that the introduction of diagnosis related groups in Germany may not be the last step in rebuilding the German health care system. The manner, scope and timing of this reform suggests that it will not succeed. Reforms lead to yet more reforms.