Accounting and Control in Health Care: Behavioural, Organisational, Sociological and Critical Perspectives

Examining the joint effects of strategic priorities, use of management control systems, and personal background on hospital performance

“…These systems comprise financial, strategic, and operational metrics (Bisbe and Malagueño, 2012;Ittner and Larcker, 1998) designed to capture various hospital activities to facilitate planning and decision-making as well as to produce desired hospital outcomes effectively (Abernethy et al, 2007). Not only are PMS widely used in practice (Ittner and Larcker, 1998; 4 Hospitals are critical to the Belgian economy, accounting for approximately 11% of the Belgian gross domestic product (the Organisation for Economic Co-operation and Development [OECD] average is 9.6%) and with an average annual growth rate of 4% in the first decade of the twenty-first century (OECD, 2011).…”

“…Previous empirical findings suggest that greater participation of doctors in management teams is positively associated with increasing engagement in quality improvement initiatives and improved strategic decisions (Veronesi et al, 2013). In contrast, there are relatively few empirical studies in the management accounting literature that assess the effectiveness of PMS used by doctor managers, despite clear evidence that the use of bureaucratic control mechanisms in hospitals differs according to the top-level managers' personal background (Abernethy et al, 2007). This paper aims to fill this gap.…”

“…However, formal management control systems (MCS) are seen to be problematic in hospitals (Aidemark and Funck, 2009). Questions about the use of monetary incentives for goal congruence, the power of physicians and nurses over operational processes, various priorities imposed by a large diversity of influential stakeholders, and austere budgets that constrain expansion and restructuring combine to create unparalleled complexities for the effective use of MCS (Abernethy et al, 2007). Previous research in management accounting thus calls for a better understanding of MCS in hospitals (e.g., Bai et al, 2010;King and Clarkson, 2015), especially factors that influence the effectiveness of formal performance measurement systems (PMS) (Ballantine et al, 1998;Cardinaels and Soderstrom, 2013).…”

Medical professionals’ responses to a DRG performance management system for hospital care in the Netherlands. Reinterpreting ‘perverse effects’, such as upcoding and patient selection, using arguments of professionalism and managerialism

“…Medical procedures including all efforts, activities and services are thus condensed into a series of products, providing a relatively simple metric for monitoring and evaluating professional performance (Abernethy and Stoelwinder 1995, Wallace 1995, Noordegraaf 2006. DRG-based performance management systems provide system managers a tool for evaluating the functioning of hospitals, hospital departments, and medical professionals and to steer based on considerations of cost-efficiency or care expenditures (Preston 1992, Abernethy et al 2006. The DRG system introduced in the Netherlands in 2006 can in this regard be characterized as a performance management system used by public and private system managers to monitor and steer the performance of Dutch hospitals and medical professionals.…”

“…As DRG systems partition medical procedures into categories and products, they provide metrics to guide monitoring and management of the performance of medical departments, hospitals, and even the overall healthcare system (Covaleski, Dirsmith andMichelman 1993, Lehtonen 2007). DRG systems are used by ministries of health, public regulators, and health insurance companies to adjust the financial incentives of medical professionals and stimulate changes in their behaviour, the ultimate aim being to increase efficiency and reduce costs (Preston 1992, Abernethy et al 2006, Lehtonen 2007. The current research examines this function of DRG systems as performance management systems specifically for the healthcare sector.…”