Cost accounting adoption, slow for decades, now at hyper speed
Summary
Every month, UPMC’s top brass gathers to study three very important green, red and blue squiggly lines that bounce up and down and up again across the length of several charts. The lines represent the academic health system’s “cost per” unit in key areas. Using the numbers, leaders of the Pittsburgh-based system learned, for example, that their nursing cost per case was up 3% in March compared with what had been budgeted, the product of 2% higher expenses and 1% lower volume. “That’s why you’re seeing that improved productivity, because we actually reduced our fixed-cost infrastructure,” said Robert DeMichiei, executive vice president and chief financial officer at UMPC. “We had not only the data and the measurements and the insight into our operations, but we also had the management willpower and initiative.”
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