Code Blue, McDermott & Stocks Accounting Version About the Book Code Blue, McDermott & Stocks Accounting Version

Learning Objectives Understand the format and purpose of a textbook/novel Introduction to service industry accounting Introduction to the healthcare industry Review of employment opportunities

Introduction to Text Format is textbook/novel Novel section (pages 15 - 171) provide background on industry necessary in understanding service industry accounting Supplement section (pages 172 - 253) provide technical material on design of service industry cost accounting

Introduction to Text Format is textbook/novel Learning in context Material is more interesting and therefore easier to understand when presented in a real-world framework People understand theory when attached to a story that illustrates the principle

Introduction to Text Exercises and problems are found on McDermott’s web page.

Introduction to Text Medical, Economic and Accounting Terms used in Text --page 254 Abbreviations used in the text--page 262 Cast of characters--page 13

Why Service Industry Cost Accounting? In 1954 the number of jobs in service industries passed the number in manufacturing Services industries presently constitute 75% of the economy

Why Service Industry Cost Accounting? Price competition is driving many service industries to costing systems In recent years, hospitals alone have spent in excess of $4 billion designing and implementing cost accounting Service industry cost accounting is different from the traditional manufacturing cost accounting

Why illustrate with a hospital cost accounting case study? Hospital cost accounting is relatively new and addresses issues such as quality, ABC costing etc. Hospital cost accounting is the most comprehensive of the service industry cost accounting systems Principles learned can be applied to other service industries

Why illustrate with a hospital cost accounting case study? The health care industry provides many opportunities for accountants It is currently the largest industry in the U.S. It is bigger than the second and third industries combined (Education and Defense)

Employment Opportunities Consulting--one of the fastest growing consulting fields in the country

Employment Opportunities Financial Accounting--prospective reimbursement has made healthcare one of the most complex areas in revenue recognition Cost Accounting--developed in the early 1980s with the introduction of prospective reimbursement New and exciting job opportunities

Hospitals are big business It is not unusual for a regional medical center to have in excess of $250 million annual operating budget 2,000 employees 60+ revenue and cost centers

The End