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Should manufacturing techniques cut costs? Quality impact?

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Advocates for standard costing believe that if you perform a procedure many times, you should have a good sample of performance and have the possibility of using statistics to evaluate the performance. Even the performance of surgical operations would be subject to such an approach. These true believers for standard costing believe costs would be contained and quality of healthcare would improve under standard costing.

Those opposed to more standard costing in healthcare believe each person is different with different symptoms, different pain thresholds, and different responses to health initiatives. Human beings deserve to be treated more than items on an assembly line. U.S. healthcare costs exceed two trillion dollars with prospects for sizable increases for decades. Much of the cost is carried by the federal government with the ultimate costs passed on to all citizens through taxation.

Should manufacturing techniques be used to cut costs, what are the quality impacts? Why or why not?

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Solution Summary

Your tutorial is 231 words (no references) and tells you that standard costing can help a surgical practice but not because it would cut costs. The posting explains why.

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No, standard costing should not be used to simply cut costs, for medical procedures or for product manufacturing. It is a "control" and "feedback" mechanism and it would be useful for surgeries just like a good implementation in business. The problem arises when you give INCENTIVES to cut costs instead of using the standards correctly.

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Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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