Cost accounting is traditionally viewed as manufacturing support system so it is usually used for product related systems. Nursing homes are the entities that provide healthcare services to patients seeking special treatments. The cost accounting for nursing homes will revolve around the services provided by them and we considered them as our major ‘cost objects’. It offers the most extensive care a person can get outside a hospital. Nursing homes offer help with custodial care—like bathing, getting dressed, and eating—as well as skilled care given by a registered nurse and includes medical monitoring and treatments. Services also include services provided by specially trained professionals, such as physical, occupational, and respiratory therapists.
Operating Costing or Service Costing
Each particular service is treated as separate units in operating costing. This method of costing is used where the cost of operating is a service such as nursing home. This method of costing is used to ascertain the cost of such particular service. In the case of a Nursing Home, a cost unit is treated as the cost of a bed per day and cost objects includes all the services provided (to the bed) throughout its treatment in the nursing home. We visited the ‘Anand Dham’ Nursing home in Bhopal and tried to find out what services are provided there and what are the cost objects related to them.
wage scales, utilities, property costs, real estate taxes)
The services nursing homes offer vary from facility to facility. Services include: Room and board
Monitoring of medication
24-hr emergency service
Social and recreational activities