Financial Management of Health Care Organizations: An Introduction to Fundamental Tools, Concepts and Applications, 3rd Edition

11

RESPONSIBILITY ACCOUNTING

LEARNING OBJECTIVES

• Define decentralization and identify its major advantages and disadvantages ■ Identify the major types of responsibility centers found in health care organizations and describe their characteristics

• Explain the relationship of responsibility, authority, and accountability in the performance measurement of responsibility centers

• Compute volume and rate variances for revenues

• Compute volume and cost variances for expenses

Health care organizations have become increasingly complex over the past quarter century. One of the major changes is decentralization, which presents interesting problems when measuring financial performance. Whereas Chapter Four dealt with measuring the financial performance ...