Using resource consumption accounting and target costing methods together as a management aid in hospitals: A hospital application

Health is a fundamental right guaranteed by the constitution. Public hospitals have an important role in providing healthcare services by the state, and they are also the unit that uses the most resources in the healthcare sector. Private hospitals also have a significant share in the healthcare sector. While the private sector aims to provide healthcare services for profit, the public sector aims to serve the community. The Social Security Institution is the largest recipient of healthcare services. Considering that hospital revenues are determined by the public authorities, hospital managers need to use cost and management accounting data to achieve the desired profit margin or maintain the sustainability of their existing services. Hospital management also needs to consider patient expectations while using their existing resources effectively. In this study, the Resource Consumption Accounting and Target Costing methods will be used to effectively utilize the existing resources in the hospital, reduce costs, and increase quality, taking into account patient expectations. The aim is to provide hospital managers with a different perspective by using these two methods in a hospital. The study was conducted in the Brain and Nerve Surgery department of a public hospital, and unit costs for 10 types of treatments were determined using the Resource Consumption Accounting method. Then, the Target Costing method was applied. It is believed that the study can serve as an example for both private and public hospitals.