Accounting Reports as a Tool in Hospital Management
by WILLIAM B. MANSFIELD Principal, Denver Office
Presented before the Oklahoma Hospital
Association, Tulsa—November 1961
LONG AGO, the general impression of a bookkeeper was that of a man who sat in a corner of the office on a high stool at a drafting table, wearing a green eye shade, armbands, and perhaps in more formal moments, a tight coat. This was a bookkeeper who never dreamed of using the information he had so laboriously compiled. Bookkeepers were slowly converted to accountants and began to learn how much real information was contained in their dusty ledgers and how useful this information could be when properly presented to management. They became reporters, commentators, and observers of business. They could tell groups of non-accountants who were managing the company what was going on. Later, they found that they needed to do more than just report. More and more frequently, they were being asked for opinions and advice on policies, and they became a part of the management team. They found it necessary to leave their offices and find out what was going on around them.
Long ago, the terms administration or management were associated
with the "Boss"—an individual who functioned in mysterious ways and whose actions were neither open to analysis nor question. He was often successful in spite of himself. Accelerated by such factors as inflated costs, technical advances in the field of medicine, and the increase in the size and complexity of hospital operations, the conversion to modern ideas of management in hospitals has been rapid. The concept of a "Boss" has given way to that of a skilled administrator who dispenses policies, delegates authority to scarcely less-skilled subordinates, and makes decisions based in large measure on factual information supplied by a controller.
People responsible for managing the hospital need information in order to know what is going on, what actions should be taken, and what decisions are likely to be most advantageous to the hospital. As the hospital grows, management must rely to a greater extent on information compiled, summarized, and interpreted by the accounting department. Both accounting and statistical information furnish valuable
evidence to management. Accounting expresses in terms of