The development of accounting and business techniques
in health care institutions has paralleled major
events in the industry's history.
Today's health care system and its increasingly sophisticated
financial reporting requirements are as different
from the autonomous hospital-oriented system
of yesterday as electric power utilities are from candles.
Bulk purchasers of health care, such as the government
and insurers, are making new demands and setting new
requirements for the health industry so that responsibility
for public disclosure, uniform reporting and cost
containment are a fact and no longer at the option of the
DEVELOPMENT OF ACCOUNTING SYSTEMS
This was not always the case. For many years, hos-.
pital accounting, as well as the administration of hospitals,
was relatively simple. Each hospital developed
its own system of recording patient receivables, and
that was the extent of its accounting system. Accounting
firms occasionally assisted hospitals but considered
their assistance charitable acts.
Uniformity in reporting was nonexistent. Since hospital
accounting systems were the product of local design
and needs, each system was different and comparison
among hospitals was difficult, if not impossible.
The value of sharing information was not yet apparent
to institutions. In fact, many hospitals refused to divulge
the results of their operations to anyone, even
safeguarding the information internally.
Over the years, a number of associations have issued
guidelines for tightening up financial reporting. Some of
the milestones in the development of hospital accounting