Institutional Pressures for Adopting New Cost Accounting Systems in Finnish Hospitals: Two Longitudinal Case Studies

Abstract

INTRODUCTIONThis study explores the motivation and rationale of cost and management accounting change in two Finnish university hospitals. More specifically, the management accounting change studied is the implementation and the adoption of activity-based costing systems, and how these systems, as well as the motivation to implement them, have changed over time. A new cost accounting system is implemented, i.e. an idea is conceived, a project is started and solutions are found. The initiative for the implementation may be intraorganisational or extra-organisational, and the motivation and rationale a combination of economic argumentation and institutional pressure. The actual benefits gained by the adoption of a new costing system will most probably be intangible and non-quantifiable in both industrial and non-profit settings. More properly, the benefits of adopting ABC are seen to relate to the belief systems of organisational actors. Therefore, it may not always be a fruitful approach to study the actual benefits of adopting ABC, but of the belief systems related to the benefits.Speciality health care in Finland is tax-financed. Hospitals are organised in hospital districts, owned by municipalities. A public university hospital finances its operations through patient fees, state subsidies for education and research, and the per-case reimbursement from the municipalities referring the patient (see Figure 1). The municipalities purchase speciality health care through the managed care mechanism, which is also intended to align the municipal speciality health care spending budgets to the hospital district budgets, so as to synchronise the demand and production of speciality health care services. This does not mean that the sum of the health care spending in municipal budgets equals the hospital district's sales budgets, since municipalities may purchase

Institutional Logics in Police Performance Indicator Development: A Comparative Case Study of Spain and Finland

“…For example there may be either financial or professional emphasis in decisionmaking and in the use of KPIs (Reay and Hinings, 2009). Further, political, administrative and social considerations may affect the selection and use of KPIs (Järvinen, 2006;Northcott and Llewellyn, 2003;Oliver, 1992). 1 Wittgenstein (1963, p. 85e, paragraph 217) notes that when explicit justifications (decision-making rationales) for following a rule have run out, there is only the tacit area of taken-for-granted (i.e.…”

“…Järvinen, 2006;Meyer and Rowan, 1977;Oliver, 1991Oliver, , 1992. Rautiainen and Järvenpää (2012) suggest that under multiple institutional logics the responses to institutional pressures are indistinct and entangled, suggesting some manipulation of KPIs.…”

“…We argue that this co-existence of multiple institutional logics with different (case and time specific) emphases can partly explain the differences and even difficulties noted in KPI selection and use, as well as the slightly varying responses to PM pressures in Finland and in Spain (see also Carmona and Grönlund, 2003;Järvinen, 2006;Navarro et al, 2008;Oliver, 1991;Rautiainen and Järvenpää, 2012). For example, financial logic and financial KPI…”

Potential barriers to the application of multi‐factor portfolio analysis in public hospitals: evidence from a pilot study in the Netherlands

“…Such system can facilitate an effective benchmarking process, and can improve the reliability of market information (see Jarvinen, 2006). Furthermore, authors indicate the need of not just making an information system available but also adapting it to the hospital organizational culture and the activities of both, managers and clinicians (Kim and Michelman, 1990;Denis et al, 1991).…”

“…In Europe however, the implementation of information systems is often obstructed due to the specificity of the health care sector, capacity constraints, considerable costs, institutional pressures, loose coupling between accounting data and actual use of resources, as well as a lack of interest on the side of the management (Pettersen, 2001;Mikolla, 2003;Haux et al, 2004;Nyland and Pettersen, 2004;Jarvinen, 2006;Naranjo-Gil and Hartmann, 2007). These factors often raise barriers to the implementation of an adequate hospital information system and the use of this system for strategic management purposes.…”