Ferd MitchellMany ongoing changes in the U.S. healthcare system suggest that basic charts of accounts (COAs) for healthcare organizations may need to be reassessed and redesigned.

A shift in emphasis from “volume payment” to “value payment” is forcing a reexamination of what “value” means and how it is to be dealt with in accounting procedures.

Another shift from treating patients for presented symptoms to “population health care” is raising further questions as to how outreach efforts to provide such care are to be treated financially.

Cheryl MitchellMoreover, changes described in the Affordable Care Act (ACA) are creating competitive pressures that have prompted insurance companies to form new provider networks.  The networks are intended to play an essential role in standard insurance policies that are to be sold in the new health insurance marketplaces (also called exchanges). 

The attitudes of individuals and small-business employers toward the total costs they experience related to health care are becoming important in determining network viability. And many individuals without prior healthcare coverage, and with minimal past experience with how the U.S. healthcare system works, will now be able to access the system, and will be evaluating their new experiences.

All of these changes have a theme in common: Organized delivery systems, hospitals, and large group practices face the need to expand their concepts of the expenses that should be included in COAs.

Recent articles in hfm have reinforced this point. In their cover story in the August 2013 issue (“ The Big Deal About Big Data”), Keith D. Moore, Katherine, Eyestone, and Dean C. Coddington note the need for broadening the data typically used, to include more information from external sources. Included should be “market research of patients, their needs, and their experiences….” 

In the same issue of hfm, Oregon Governor John Kitzhaber presents a list of “ principles for metrics” applying extended measurement concepts. 

In a recent posting, we have also further explored the concepts of “unmeasured costs.” 

A common theme for these discussions is that financial record-keeping now needs to be extended to a new group of accounts that deal with the ways in which individuals assess the relevance and value of services that they are receiving. Of particular importance are expenses that are “real” to individuals but that providers often neglect. 

Such costs may include transportation costs to obtain care; costs due to obligations at home, such as child or parent care when alternative arrangements have to be made; time taken off from work and loss of income; time spent waiting for care as a perceived burden on productivity; follow-up costs, such as obtaining prescription drugs; and the costs of following care instructions at home, for compliance with medical orders.

All of these costs are very real to patients and their families, and affect attitudes toward the care they receive. These costs also affect the attitudes of employers when employees are impacted, and insurance companies where sales of policies are impacted.

Reflecting these costs in COAs can be quite difficult, but it is of critical importance. With such accounts, providers can assess “how they are doing” in meeting the total needs of their patients. Providers can also demonstrate to funding organizations the values of the extended services that they offer. 

Expanded accounting can allow providers to better advocate for expanded payment for many of the services that they provide—to increase value, reach out for population care, and adapt to the ACA. 

Organizations that can use their accounting systems to demonstrate improvement in expanded services can better justify higher payments from all funding sources—and build community recognition through strategic news stories and press releases.  


Ferd H. Mitchell is an attorney, Mitchell Law Office, Spokane, Wash., and a member of HFMA’s Washington-Alaska Chapter.


Cheryl Mitchell is an attorney, Mitchell Law Office, Spokane, Wash.

Publication Date: Thursday, September 05, 2013