cost analysis in wockhardt

Cost Analysis in Wockhardt Hospital

CHAPTER-1

The Oxford College of Business Management. 1


1.1.1 COST –IT’S RELEVENCE IN DECISION MAKING

Cost is a measurement in monetary terms, of the amount of resources used for

the purpose of production of goods or for rendering service. Cost is measured by the

sacrifice made in terms of resources or price paid to acquire goods and services. Here

two things can be stated:

(1) Resources are in short supply, and

(2) Nothing in the world is free.

Most of the tasks performed by a hospital management are concerned with decision

making to make the best use of limited resources and exercise managerial control so

that resources are not wrongly or wastefully used. Relevant and reliable cost data will

enable managers to discharge their responsibilities more effectively, efficiently and

rationally.

1.1.2 COST ANALYSIS

Cost analysis is defined as re-arranging and reclassifying cost and income data in such

a manner and detail as to reveal significant relationship to management.

Cost analysis is the process of identifying and expressing the financial impact of a

particular service or commodity. It is the process of apportioning or allocating the cost



of department on the basis of statistical data that measures the amount of services

rendered by that department.

It is an effective management tool for controlling cost because each cost component

can be carefully analyzed and compared with the revenue to give an accurate financial

picture of the department so that management can take corrective actions.

1.1.3 MARGINAL COSTING

Marginal costing is the ascertainment of marginal cost by differentiating between

fixed and variable cost. It is used to ascertain the effect of changes in volume or type

of output on profit.

1.2 THEORITICAL BACKGROUND

1.2.1 INTRODUCTION TO COST ACCOUNTING

Modern business needs frequent information about business activities to plan

accurately for the future, to control business results, and to make a proper appraisal of

the performance of persons working in an organization. The fulfillment of these goals

requires details about costs incurred and benefits obtained which are provided by what

is known as “cost accounting”.

Cost accounting is the recent development in the accounting world. Due to the failure

of financial accounting in providing cost information to the managers, the

industrialists became more and more conscious about cost. Due to the growing

competition and partly because of the increased government control over pricing has



encouraged growth and development of cost accounting at the beginning of the 20 th

century.

Cost accounting is the art or process of recording, analyzing and classifying of

expenditure for the purpose of product costing or service costing, ascertainment of

profitability, operational planning and cost control. Cost accounting is a forward

looking approach which is related to the recording, analyzing and classifying of

expenditure with the object of ascertaining the total and per unit cost of a product or

service.

Cost accounting is the classifying, recording and appropriate allocation of expenditure

for the determination of the costs of products or services, and for the presentation of

suitably arranged data for purposes of control and guidance of management. Thus,

cost accounting relates to the collection, classification, ascertainment of cost and its

accounting and control relating to the various elements of cost.

1.2.2 NEED FOR COST ACCOUNTING

Cost accounting is required because it provides the following:

It ascertains the true cost of production.

It classifies the cost into direct and indirect.



It provides a system of standard that is compares the actual with

predetermined

standards.

Assists in fixation of selling price and calculation of tender price.

It provides assistance in cost control

It gives assistance in planning and decision-making.

1.2.3 DEFINITION OF COST ACCOUNTANCY

The institute of cost and management accountants, London, has defined the term ‘cost

accountancy’ as “the application of costing and cost accounting principles, methods

and techniques to the science, arts and practice of cost control and the ascertainment

of profitability. It includes the presentation of information derived there from for the

purpose of managerial decision making.”

According to Gordon shillinglaw, cost accounting is defined as “the body of concepts,

methods and procedures used to measure, analyze, or estimate the costs, profitability

and performance of individual products, departments, and other segments of a

company’s operations, for either internal or external use or both, and to report on

these questions to the interested parties.”

According to Wheldon, “cost accounting is the application of accounting and costing

principles, methods and techniques in the ascertainment of cost and the analysis of



saving or excess cost incurred as compared with previous experience or with

standards”

1.2.4. FEATURES OF COST ACCOUNTANCY

The main features of cost accountancy may be given as follows:

1. Cost accountancy is a special branch of accountancy dealing with the

ascertainment of cost of product or services.

2. Cost accountancy is both a science and an art.

3. It follows the same double entry system as in financial accounting.

4. It involves the process of accumulation, classification, analysis, recording and

ascertainment of costs.

5. It determines the total and per unit cost of products and services.

6. It provides data for fixing the selling price of products and services.

7. It provides data to the management for exercising effective control over costs.

8. It provides data to the management for the use in forward planning and

decision-making process.

1.2.5. SCOPE OF COST ACCOUNTANCY

Cost accountancy includes the following subjects:

1. Costing:

Costing refers to the techniques and processes of ascertaining costs. Costing

consists of the principles, rules, methods and techniques (accumulation,



classification, analysis and allocation) used to determine the costs of products and

services.

2. Cost accounting:

Cost accounting is the science which records and determines scientifically the

accurate cost of manufacturing or service per unit and controls and guides the

person involved in the organization of production.

3. Cost control:

Cost control guides the organization by setting up targets, measurement of the

actuals, comparison of the actuals with targets to ascertain the variances, analysis

of variances and taking corrective actions to eliminate the variances.

4. Budgetary control:

Budgetary control is a system whereby the budgets are used as a means of

planning and controlling costs.

5. Cost audit:

Cost audit is the verification of the correctness of cost accounts and a check on the

adherence to the cost accounting plan.

1.2.6. OBJECTIVES OF COST ACCOUNTING

The primary object of cost accounting is to find out the cost of unit of

production of a commodity or service. According to J.R. Batliboi – “the main

objects of cost accounts, irrespective of the branch of industry to which they



are applied should always be to express faithfully and accurately the true

costs.”

The objectives of cost accounting may be summarized as follows:

1. To ascertain the total and per unit cost of the commodity produced,

work performed and service rendered.

2. To ascertain the profitability of different products, jobs or work-

orders.

3. To exercise effective control over wastage and loss of materials

during production

4. To provide means to measure the efficiency of labour.

5. To exercise effective control on the total cost of labour engaged in

each department of the business.

6. To exercise effective control on the idle time of workers and

machines.

7. To enable the manufactures to study comparative costs of different

periods and to throw light on the extent and causes of variation.

8. To provide statistical data for the purpose of submitting quotations or

tenders.

9. To provide reliable information and statistical data for framing the

future policy of the manufacturing concern.

10. To collect data for the preparation of cost accounts.



11. To provide for cost control through budgetary control and standard

costing systems.

12. To present and interpret data for management planning, decision

making and control.

1.2.7. ADVANTAGES OF COST ACCOUNTING

Cost accounting system renders invaluable services to the manufactures, management,

employees, investors, consumers and government. These services or advantages may

be summarized as follows:

ADVANTAGES TO MANUFACTURERS AND MANAGEMENT:

The main advantages of a sound costing system to the manufacturers and management

are as follows:

1. Ascertainment of cost:

The principle object of cost accounting system is to ascertain scientifically the cost of

production and this is also the main advantage of cost accounting system. The cost

accounting system enables the manufacturer to ascertain exact cost per unit, per job or

per contract not only at the final stage of completion but also at various stages of

production or execution.

2. Disclosure of profitable and unprofitable activities:



Cost accounting system discloses the profitable and unprofitable activities of

a business and thus affords valuable suggestion or elimination of those, which are

less profitable or completely unprofitable, and for an expansion or adoption of

those, which are profitable.

3. Provision of basis for determination of selling price:

By disclosing actual cost of production, cost accounting system provides the

businessman with a reliable basis for fixing selling price of his products. Thus it

saves the manufacturer from losses, which may arise due to injudicious fixation of

prices without actually looking to the cost of production.

4. Comparison of cost:

Cost accounting system furnishes reliable data for comparing costs in

different periods, for different volume of output, in different departments and in

different establishments.

5. Check on the accuracy of financial accounts:

Cost accounting system provides an independent and most reliable check

on the accuracy of financial accounts by means of the reconciliation of profits as

shown by cost accounts and final accounts.

6. Calculation of tender price or quotation price:



Cost accounting system provides a reliable basis for preparing tenders or

quotations at which the manufacturer agrees to supply goods to a prospective

customer at some future date.

ADVANTAGES TO THE CREDITORS AND INVESTORS

A sound business concern with a good system of costing attracts more investors as it

becomes easier to judge the financial strength and creditworthiness of the business.

ADVANTAGE TO THE GOVERNMENT

It provides ready figures for use by the government for applications to the problems

like price fixation, price control, tariff protection, wage level fixation, payment of

dividends or settlement of disputes.

ADVANTAGES TO THE CONSUMERS

The ultimate aim of costing is to reduce cost of production to the minimum and

maximizes the profits of the business. A part of the benefit resulting from the

reduction of the cost is usually passed on to the consumers in the form of lower

prices.

1.2.8 LIMITATIONS OF COST ACCOUNTING

The following are the main limitations of cost accounting:

Installation of costing system is expensive:



Many formalities are to be observed by a small and medium size concern due to

which the establishment and running costs are so much that it becomes difficult for

these concerns to afford its cost.

Cost accounting lacks a uniform procedure:

It is possible that two equally competent cost accountants may arrive at different

results from the same information

It increases the workload:

All business organizations are required to prepare financial accounts to determine

the profit and financial position. Installation of cost accounting system along with

financial accounting increases the workload.

Handling futuristic situation:

The contribution of cost accounting for handling futuristic situation has not been

much. For example, it has not evolved any tool for handling inflationary situation.

1.2.9 COST SHEET OR STATEMENT OF COST

Cost sheet is a statement designed to show the output of a particular accounting period

along with break up of costs. The data incorporated in cost sheet are collected from

various statements of accounts, which have been written in cost accounts.

There is no fixed form for preparation of cost sheet but in order to make the cost sheet

more useful it is generally presented in columnar form. The information to be



incorporated in cost sheet would depend upon the requirement of the management for

the purpose of control.

1.2.10 ADVANTAGES OF COST SHEET

The advantages of cost sheet are as follows:

1. It discloses the total cost and the cost per unit of the units produced during

the given period.

2. It enables the management to have a close watch and control over the cost

of production.

3. It acts as a guide to management and helps in formulating useful policies.

4. It helps in fixing up the prices more accurately.

5. It helps to minimize the cost of production.

6. It helps to submit quotations with reasonable degree of accuracy against the

tenders.

7. By preparing cost sheet it is possible to find out the variations in costs and

to eliminate the adverse factors and conditions, which go to increase the

total cost.

1.2.11 METHODS OF COSTING

Basically there are two methods of costing as per CIMA terminology viz:

i) Specific order costing:

It is the category of basic costing methods applicable where the work consists of

separate jobs, batches or contracts each of which is authorized by a specific order



or contract. Job costing, batch costing, and contract costing are included in this

category.

ii) Operation costing:

It is the category of basic costing methods applicable where standardized goods or

services result form a sequence of repetitive and more or less continuous

operations or process to whish costs are charged before being averaged over units

produced during the period.

1.2.12 TYPES OR TECHNIQUES OF COSTING

Following are the main types of costing for ascertaining costs:

1. Uniform costing:

It is the use of same costing principles and /or practices by several undertakings

for common control or comparison of costs.

2. Marginal costing:

It is the ascertainment of marginal cost by differentiating between fixed and

variable cost. It is used to ascertain the effect of changes in volume or output on

profit.

3. Standard costing:



A comparison is made of the actual cost with a pre-arranged standard and the cost

of any deviation (variance) is analyzed by causes. This permits the management to

investigate the reasons for these variances and to take corrective action.

4. Historical costing:

It is ascertainment of costs after they have been incurred. It aims at ascertaining

costs actually incurred on work done in the past. It has a limited utility, though

comparison of costs over different periods may yield good results.

5. Direct costing:

It is the practice of charging all direct costs, variable and some fixed costs relating

to operations, processes or product leaving all the other costs to be written off

against profits in which they arise.

6. Absorption costing:

It is the practice of charging all costs, both variable and fixed to operations,

processes or products. This differs from marginal costing where fixed costs are

excluded.

1.2.13 MEANING OF MARGINAL COSTING

The Chartered institute of management accountants, England, defines the term

“marginal cost” as follows:



Marginal cost is the amount at any given volume of output by which aggregate

costs are changed if the volume of output is increased or decreased by one unit. In

this context a unit may be a single, a batch of articles, an order, a stage of

production capacity or a department. It relates to the change in output in the

particular circumstances under consideration.

According to CIMA terminology marginal costing is the ascertainment of

marginal cost and of the effect of changes in the volume or type of output by

differentiating between fixed costs and variable costs. In this technique of costing

only variable costs are charged to operations, processes or products, leaving all

indirect costs to be written off against profits in the period in which they arise.

It is clear from the above that only variable costs form part of product cost in the

technique of marginal costing because only variable costs are charged if output is

increased or decreased and fixed costs remain the same.

1.2.14 FEATURES OF MARGINAL COSTING

The following are the main features of marginal costing:

It is a technique of costing which is used to ascertain the marginal cost

and to know the impact of variable cost on the volume of output.

All costs are classified into fixed and variable cost on the basis of

variability.

Variable costs alone are charged to production. Fixed costs are

recovered from contribution.



Selling price is based on marginal cost plus the contribution.

Profit is calculated by deducting marginal cost and fixed cost from

sales.

The profitability of product/department is based on contribution made

available by each product/department.

1.2.15 ADVANTAGES OF MARGINAL COSTING

The following are the main advantages of marginal costing:

It is simple to understand and easy to operate.

In marginal costing, it is established that profit is a function of sale and

not of production as profit depends on sales volume and not on

production volume.

There is no problem of computing fixed overhead recovery rates and

there under or over recovery as fixed overheads are charges against the

contribution.

It facilitates control over variable cost by avoiding arbitrary

apportionment or allocation of fixed cost.



It is very useful tool of planning. It guides the management about the

profitability of earning profit at various levels of production and sales.

It is a very valuable technique in decision-making. It provides

information to the management in making decisions like make or buy,

selling price fixation etc.

It helps in cost control by concentrating on variable cost, as the fixed

cost is non -controllable in the short period.

It helps in evaluation of performance of different departments,

divisions and sales man.

It is a valuable adjunct to standard costing and budgetary costing.

1.2.16 LIMITATIONS OF COST ACCOUNTING

Marginal costing technique has certain limitations, which must be kept in

mind while making use of this technique

1. The separation of expenses into fixed and variable presents certain

technical difficulties where as marginal costing technique assumes that all

expenses can be divided into fixed and variable. In fact, no variable cost is

completely variable and no fixed cost is completely fixed. Actually, most

of the expenses are semi variable and it is difficult to segregate them into

fixed and variable.



2. With the development of technology, fixed expenses have increased and

their impact on production is much more than that of variable expenses.

Therefore, a system of costing which ignores fixed expenses is less

effective because a significant proportion of the cost representing fixed

expenses is not taken care of.

3. Marginal costing technique is difficult to be applied in contract or ship

building industry where the value of work-in-progress is high in relation to

turnover.

4. Marginal costing technique cannot be successfully applied in cost plus

contracts unless a high percentage over the marginal cost is charged from

the contractee to cover the fixed costs and profits.

5. Some times an order from a new customer is accepted at a very low price

on the argument that if marginal cost is little less than the price of the

order it will give some contribution. This may some times lead to general

reduction in selling price and thus to losses.



CHAPTER-

2



2.1. RESEARCH METHODOLOGY OF THE STUDY



Emory defines research as “An organized inquiry designed and carried out to provide

information for solving a problem”

Research methodology is always a comparison between options and choices that are

frequently determined by the availability of resources. There is no one best approach,

rather, the most effective approach for understanding and resolution of a chosen

problem depends on a large number of variables, not least the nature of the problem

itself.

Bechhofer says, “The research process is a clear cut sequence of procedures following

a neat patron and a messy interaction between the conceptual and empirical world,

deduction and induction accruing at the same time.”

Types of research:

1. Descriptive research:

Descriptive study is a fact-finding investigation with adequate

information. It is designed to gather descriptive information and provides information

for formulating more sophisticated studies. Using one or more appropriate methods

the data is collected.

2. Analytical study:

Analytical study is a system of procedures and techniques of analysis

applied to quantitative data.

2.2 RESEARCH DESIGN

The research design is considered to be the blue print for action, which is made before

the respective action to be undertaken. How ever it needs to be flexible.



A research design is a logical and systematic plan prepared for directing a research

study.

It specifies

The Objectives of the study.

The methodology and techniques adopted for achieving the objectives.

Statement of the problem identified in the organization.

The sources and type of information collected.

A research design is the program that guides the investigator in the process of

collecting, analyzing and interpreting observations.

2.3 SOURCES OF COLLECTING DATA

The search for an answer to research questions calls for collection of data. Data are

facts, figures and other relevant materials, past and present, serving as basis for study

and analysis.

2.3.1 Primary data:

Primary data are first hand information directly collected from the original

source. The various methods of collecting these data were through observation, oral

interview, discussions and personal visiting to the concerned department with prior

appointments.

2.3.2 Secondary data:

Secondary data are the readily available data that do not require the trouble

of constructing tools and administering them. The sources of collection of these data



were accounting records like purchase record, stock book, handouts, magazines, web

sites etc

2.5 STATEMENT OF THE PROBLEM

“Analysis of costs of tests to assist the price revision of a laboratory.”

2.6 NEED OF THE STUDY

Costing is the backbone of any organization to review its existing cost and to

formulate new products.

Costing for this department (pathology) was not carried out for the last 2 years, as per

the company policy the prices of this department is revised once in 2 years.

Thus the need of the study is strongly recommended by the organization.

2.7 SCOPE OF THE STUDY

This study helps in identifying, classifying and ascertaining cost for each test,

which in turn helps the management in fixing the selling prices effectively and

efficiently.

The scope of this study is confined only to the pathological department

(laboratory) of Wockhardt Hospital & Heart Institute (WHHI).



The scope of this study does not include the areas of design and development,

planning and control of materials, stock maintenance, inventory, marketing,

human resource department etc.

2.8 OBJECTIVES OF THE STUDY

The objectives of the study are as under:

1. To identify and ascertain the cost associated with the corresponding tests.

2. To analyze the profit based on the cost identified.

3. To review the selling price.

4. To provide a basis for setting standard cost.

2.9 OPERATIONAL DEFINITION OF THE CONCEPTS

Pathology department (laboratory)

It is a department, which provides the information to doctors in order to assist

them in arriving at correct diagnosis for the treatment and prevention of diseases.

Reagents

Reagents are chemical solutions used to get the appropriate results of the

corresponding test.

Control /Calliberation



They are chemical solutions that are required to be run through the machine

regularly to check whether it performs with in the normal range and provides the

results accurately.

In other words they are used to cross check or verify if the machine is in its proper

condition and whether the results of the tests are being provided accurately.

2.10 REVIEW OF LITERATURE

1) Cost Accounting: Principle and Practice

S.P Jain and K.L Narang.

2) Cost Accounting:

Jawahar lal

3) Fundamental of Cost Accounting:

Sikka T.R

4) Advanced cost Accounting and cost analysis & control:

B.M Lal Nigam and G.L.Sharma.

5) Methodology of Research in social sciences:

Dr.O.R Krishnaswamy

6) Managerial Accounting for hospital:

G.R.Kulkarni.

7) Websites:

www.wochardthospitals.com

www.whhi.com

www.msn.com


http://www.msn.com/


www.msn encarta.com

2.11 LIMITATIONS OF THE STUDY

1. This unit study is confined to the pathology department of a hospital.

2. The study does not take into consideration the extra cost that might be

incurred in case of spillage of reagents by the technicians.

3. The study does not consider the retesting cost incurred in some circumstances

where the test requires to be repeated if it gives abnormal results.

2.12 OVERVIEW OF THE PROJECT

CHAPTER-1 AN OVERVIEW OF COST ACCOUNTING

This chapter throws light on the theoretical background of the topic selected,

introduction, features, scope, advantages and limitations of cost accounting. Basically

this chapter summarizes the theory or conceptual framework with in which the

problem has been investigated.

CHAPTER-2 RESEARCH METHODOLOGY

Second chapter deals with the design of the study i.e. research methodology

used statement of the problem, need, scope, objectives, sources of collecting data,

review of literature and limitations of the study.

CHAPTER-3 COMPANY PROFILE


http://www.msn/


This chapter provides the information regarding the company in which the

study is conducted. It provides with the theoretical background, origin, objectives,

international alliance, milestone achieved by the company.

CHAPTER-4 ANALYSIS AND INTERPRETATION OF DATA

In this chapter all calculations pertaining to the study are calculated, analyzed and

interpreted.

CHAPTER-5 FINDINGS, SUGGESTIONS AND CONCLUSION

This is the final chapter of the study with the findings, conclusion of the over all study

along with the suggestions pertaining to the areas of improvement.



CHAPTER-

3



3.1 INDUSTRIAL BACKGROUND

HISTORY OF HOSPITALS

The term hospital derives from the Latin word Hospitals, which relates to guests and

their treatment. The word reflects the early use of these institutions not merely as

places of healing but as havens for the poor or for weary travelers. Hospitals first

appeared in Greece as Aesculapius, named after the Greek God of medicine,

Aesculapius. For many centuries they developed in association with religious

institutions, such as the Hindu Hospitals opened in Sri.Lanka in the 5th century BC

and the monastery-based European Hospitals of the middle ages (5 th century to 15th

century). The hotel Dieu in Paris, a monastic Hospital founded in 660 AD, is still in

operation today, most people were treated for their illnesses by neighbors and friends

in their homes well into the 1800s. Hospitals changed radically after the civil war in

the early years of the war no Hospitals were available to treat the thousands of

soldiers who were wounded or became ill, but by the war’s end in 1865, 200 hospitals

with more than 137,000 beds had opened in the northern states. In addition to the



military hospitals that emerged during the civil war, many voluntary and public

hospitals appeared in the 1850’s.

Through out the 1850’s and 1860’s it was for more dangerous to receive care in a

Hospital than at home because of poor sanitation. As many as 25% of patients died

after surgery because hospitals of that area were over crowded, poorly ventilated, and

inadequately cleaned. The introduction of antiseptic techniques by British Surgeon

Joseph Lister in 1865 marked a turning point in the safety of Hospitalization.

Patients care also improved as a result of the formal training of nurses at the first

U.S.nursing schools, which were founded independently in a 1873 by Bellevue

Hospitals in New York, New Haven Hospital in connect cut, and Boston’s

Massachusetts general Hospitals. The development of X-rays and the clinical

laboratory in the 2890’s further improved the quality of care available to patients and

prompted the opening of many new hospitals, including religious hospitals and

hospitals that specialized in the treatment of women or children. The number for-

profit hospitals owned by Doctors also increased between 1890 and 1020.

INTRODUCTION

Hospital, institution that provides a broad range of medical services to sick,

injured, or pregnant patients. Hospitals employ medical, nursing, and support staff to

provide in-patient care to pupil who required close medical monitoring and out-

patient care to people who need treatment but not constant medical attention.

Hospitals provide diagnosis and medical treatment of physical and mental health

problems, surgery, rehabilitation, health education programs, and nursing and



physician training. Many hospitals also serve as centers of innovative research and

medical technology.

Hospitals being one of the health care providers are institutions providing medical

treatment and care to the ill and injured people. The state, charities, individuals, and

now corporate bodies are funding and managing them.

Other health care providers being:

-Individual medical practioners.

-Nursing homes.

-Homes for aged.

-Drug/alcohol rehabilitation centers, etc

DISTINCTIVE FEATURES

Vast range of services

Use of sophisticated equipment

Critical role of employees

High cost

Changing profile of hospitals that is they are generally super-speciality and

have foreign tie ups with international healthcare institutions

ENVIRONMENTAL FACTORS

Lack of profit motive (other than corporate hospitals)

Emphasis on service

Absence of competition



Intangible output

TYPES OF HOSPITALS

Hospitals in the United States are classified into the following:

On the basis of the services provided they are classified as:

1. General Hospital

2. Specialized Hospitals

On the basis of the length of the stay by the patients they are classified as:

1. Short stay

2. Long-term care

On the basis of the ownership they are classified as:

1. Not for profit

2. Proprietary/Private/Corporate

3. Government owned

HOSPITAL DEPARTMENTS

Hospitals are typically organized into medical departments, or units, such as an

emergency room surgical suites, intensive care unit, pediatric and maternity wards,

and departments of radiology, anesthesiology, pathology, and rehabilitative medicine.

A hospital emergency department is staffed 24 hours a day by Doctors and nurses

who have been trained to diagnose health problems quickly, these doctors and nurses

perform medical or surgical treatments that stabilize a patient condition so that the

patient can be moved to anther part of Hospital for additional case. When the



emergency room is crowded with patients, emergency department staff identifies and

respond immediately to the most seriously ill or injured patients, a medical approach

called triage.

The surgical suits include the actual operating rooms, where surgical procedures are

performed, and postoperative recovery rooms. All operating rooms have an operating

table that can be adjusted to accommodate the surgical procedure and facilitate the use

of sophisticated monitoring equipment. Instruments and equipment, such as lasers or

television screens, are brought into the operating room as needed. After surgery

patients are taken to the post operative recovery room, adjacent to the operating room,

so they can be monitored as they awaken from anesthesia.

Many hospitals offer two types of ICUs- one for patients who have had surgery and

one for patients with dangerous medical conditions, usually involving the heart.

Some hospitals also have ICUs for new borns or burn patients. Intensive Care Units

use monitoring equipment that transmits data on a patient’s condition directly to the

nurses station. ICUs also have on hand technology and medication that are specific to

the medical needs of the patients they serve. For example, new born ICUs have

equipment that is specifically designed to deliver Oxygen to tiny babies, while burn

units have special ventilation system to reduce the chance that patient will be expose

to infection.

The pediatric unit admits only children and is equipped with instruments and

machines that are suitable for the small size of its patients. Hospitals often prepare

children for a hospital stay by allowing them to visit before being admitted so that the

surroundings will seem less frightening during their stay. Some hospitals allow a



parent to stay in the Childs room during a hospital stay. Pediatric wards often have

play room for their young patients and organized special activities such as parties to

cheer children who are hospitalized during the holidays.

Hospitals also have departments that assists in the treatment of patients but that

are not involved in there day-to-day care. The department of radiology provides

internal images of the body to diagnose and treat diseases, the anesthesiology

department works with physicians to provide the safest type of anesthesia for a patient

during surgery and pain relief after surgery, and the pathology department examines

body tissues in a laboratory t diagnose disease. Some hospitals help patients in their

recovery by providing the services of a department of rehabilitative medicine, which

is often headed by a Doctor and staffed by physical and occupational therapists.

These professionals help patients regain normal physical functions following surgery

and relearn muscular controle and co-ordination in resuming every day tasks.

SERVICES PROVIDED BY HOSPITALS

General Hospitals, regardless of their size, provide patients with a vide range of

services, including emergency treatment, surgery, and medical and nursing care.

Specialized Hospitals, in contrast, may concentrate on a particular group of patients,

such as children, or a disease, such as Cancer, Heart etc., and some specialized

hospitals combined treatment and research.

For instance, Roswell park Cancer Institute in Buffalo,



New York, offers 37 specialized Cancer treatment centers, including centers for

acquired immunodeficiency syndrome (Aids) related Cancers, Brain tumors, and

ovarian cancer, and provides state-of-the-Art treatments for these Cancers that are not

generally available in other Hospitals. The institutes also conducts research on new

Cancer drugs and procedures, such as Photo dynomic therapy, which uses a laser to

activate Cancer-killing chemicals inside tumors. Some General and specialized

Hospitals are also function as tertiary care centers, treating the most difficult and

complex cases or the most seriously ill patients. These may include patients who need

heart, lung, or liver transplants. Many Hospitals that serve as teaching institutions

train residents (Medical school graduates who are doing post graduate training) in

general medicines are specialty areas. Teaching Hospitals also train others interested

in a Health case career, including nurses and laboratory specialists. Although some of

these hospitals are relatively small and train only a few Doctors in teaching

programmes that are affiliated with medical schools approximately 300 Hospitals are

University-based academic medical centers that offer both medical training and

opportunities for medical research. Academic medical centers are usually massive

urban Hospitals linked closely with major medical schools. Although academic

medical centers represent only 6% of all U.S.Hospitals, they care for about 20% of all

patients nation wide because they serve as referral Centers for specialized

consultation or for advanced diagnostic and therapeutic procedures for patients in

wide Regional areas. The medical center of the University of California at San

Francisco annually admits almost 27000 patients and treats about 340,000 out patients

in its clinics and 53,000 patients in its emergency room and trauma center.



INTRODUCTIO TO WOCKHARDT LIMITED

Wockhardt Limited, established nearly four decades ago, is a research and technology

oriented Pharmaceutical Company. It is the number one Pharmaceutical Company in

the United Kingdom and 4th largest in India, operating in 13 countries. It is also

credited

as the only super-specialty healthcare provider in India from the past 15 years.

Wockhardt has emerged as a leading player in domestic as well as international

markets, with widely accepted and effective drugs and formulations.

Research and Development

As a front-runner in multi-disciplinary R&D programs, Wockhardt comprises a team

of 350 eminent scientists largely focused on developing innovative technologies and

New Drug Discovery. The company has a dedicated team of over 90 scientists

engaged in new drug discovery research and has several new chemical entities in the

field of sepsis and anti-infective.

Innovation rather than Invention is the short-term focus of Wockhardt's R&D

program. As a hospital, their efforts are dedicated and committed to the creation of

patient value. At Wockhardt, we are convinced that a judicious blend of technology,



clinical expertise and personalized care applied in the context of achieving patient

satisfaction can make their pursuit of excellence in health care highly rewarding.

Wockhardt Hospitals, India, currently operates the Wockhardt Hospital & Heart

Institute, Bangalore (http://www.whhi.com/), Wockhardt Hospital & Kidney Institute,

Kolkata (http://www.whki.com/) and Wockhardt Hospitals, Mumbai

(http://www.wockhardthospitals.com/) Wockhardt hospitals, Nagpur and Hyderabad.

Since then, these hospitals have become centers of excellence in their respective

fields, and draw patients not only from their cities, but also from surrounding states

and even neighboring countries. Wockhardt Hospital is planning to set up additional

five super-specialty hospitals in the next three years, of which three will be at

Mumbai and one at Bangalore. All these will have modern and world-class facilities.

Wockhardt Hospitals Limited is a chain of specialty hospitals in India under the

Wockhardt Group. With over a decade of experience since inception, Wockhardt

Hospitals is committed to provide us with the best medical services in the country and

is known for offering a comprehensive and world-class care. It has all the assets that

make it the best, in-fact one of the foremost hospitals in the country.

BRANCHES OF WOCKHARDT HOSPITALS LIMITED

1. Wockhardt Hospital & Kidney Institute, Kolkata


http://www.wockhardthospitals.com/

http://www.whki.com/

http://www.whhi.com/


The Kolkata center has expanded in a big way with the creation of the

Wockhardt Hospital & Kidney Institute – a 70 bedded dedicated urology super-

specialty hospital specialized in handling personalized “day care” service in urology,

gastroenterology and ophthalmology.

Being one of its kinds in eastern India, the center offers several comprehensive health

check-up packages meeting various needs of individuals and corporates.

2. Wockhardt Hospitals, Mumbai

Wockhardt has associated with Harvard Medical International, USA, to bring you

Wockhardt Hospitals, Mumbai. Wockhardt joined hands with the Government of

Maharashtra to set up a 250 - bedded super-specialty hospital in Mumbai, with state-

of-the-art surgical and Medicare facilities. Wockhardt will hold 51 percent of the joint

venture equity and the Government of Maharashtra with the funding assistance of the

World Bank will hold 49 percent.

Wockhardt Hospitals, Mumbai, is equipped with five different super-specialty

focused hospitals, to offer you a comprehensive and world-class care, all under one

roof.

>Wockhardt Heart Hospital

This hospital vows to offer you the best of cardiac care, with an excellent clinical

record of highly qualified and expert cardiac surgeons. It also has interventional

cardiologists with an international collective experience of more than 10,000



cardiothoracic surgeries, 25,000 Angiograms and 8,000 Angioplasties. The hospital is

equipped with Cardiothoracic OT, Cardiac Catheterization Lab, well-equipped ICCU

facility, all designed to meet the international standards.

>Wockhardt Brain & Spine Hospital

This hospital provides extensive medical and surgical care for patients with disorders

of the brain, spinal cord and peripheral nervous system. The neurologists and

neurosurgeons are backed by the most extensive neuro-diagnostic and imaging

facilities including MRI and CT technology. Along with providing general diagnostic

x-ray imaging, Wockhardt Brain and Spine Hospital offers you a magnitude of

imaging services like EEG, EMG, Sensation 10 CT Scanner, Functional MRI with

Spectroscopy, OPMI Multivision etc.

>Wockhardt Bone & Joint Hospital

This hospital specializes in all types of musculoskeletal problems

ranging from trauma to minimal invasive arthroscopy. The clinical team is also

specialized in joint replacement surgery, ligament repair, knee & spine surgery,

minimum access joint surgery, pediatric bone and joint surgeries and sports medicine

> Wockhardt Eye Hospital

This hospital is poised to be the leading center for ophthalmology in Mumbai. It

has specialty clinics in cornea, glaucoma, vitreo-retina and retinovascular,

uveitis, squint, orbital diseases and oculoplasty, cataract & intra-ocular surgery,

diabetic retinopathy and neuro-ophthalmology. The latest treatments and



technology available in the hospital are OCTIII, IOL Master, FF 450 Fundus

Camera, Millennium Micro Surgical System, SP-2000P Non-Contact Specular

Microscope, Corneal Topography and Y.A.G. Laser.

> Wockhardt Minimal Access Surgery Hospital

To minimize surgical trauma, pain and blood loss to the patients, the hospital is

focusing more on the Minimal Access Surgery. Also known as keyhole or band-aid

surgery, it has been used for several years as an alternative to traditional open-

surgery. The hospital will provide excellent services in the areas of neuro-surgery,

abdomen, thoracic, bone & joint, pulmonary and ENT.

WOCKHARDT HOSPITALS & HEART INSTITUTE (WHHI), BANGALORE

VISION:

Maintaining the health of the world’s swelling population ranks amongst the

highest of social priorities and health care providers stand in the front line of

this all effort.

At wockhardt hospital and heart institute, we seek to differentiate ourselves

by our international perspective to deliver exceptional cardiacare.

We will always place our emphasis on consistently securing our patients

prosperity through investing in knowledge and expertise which creates better



lives and delivers superlative values to our patients in a uniquely personalized

way

MISSION:

“To save and enrich the quality life of patients suffering from cardiac disease, through

the efficient deployment of technology and human expertise, in a caring and nurturing

environment with the greatest respect for human dignity and life.”

INTRODUCTION TO WHHI

Wockhardt Hospital & Heart Institute, Bangalore

In 1989, Wockhardt Ltd. instituted a dedicated super-specialty cardiac hospital in

the south Indian city of Bangalore, with a focus to excel in the field of cardiology and

cardiovascular surgery. Since inception, they have grown to become a renowned

tertiary level heart center providing cardiac care to patients of all age group including

infants.

Wockhardt Hospital & Heart Institute is ranked amongst the very best heart

Institutes in India and over the years has performed several thousand successful

cardiac surgeries and over a thousand angioplasties. This center is also tied-up with

five major medical insurance companies and with some of the premier heart institutes

of the world.


http://www.wockhardthospitals.com/index_heart.html


A long standing reputation, for cardiovascular excellence along with premier

diagnostic and therapeutic capabilities, enables them to treat the most complex and

high risk cardiac patients. This has resulted in the institution being recognized

amongst the best heart hospitals in India and a treatment destination for cardiac

patients from not only their cities, but also from surrounding states and even

neighboring countries.

The number of Cardiac surgeries, Angioplasties and Coronary Angiograms

performed each year and the commitment to provide highest quality of cardiac care

with compassion and concern for each patient's well being has earned them the

recognition of being a 'Center of Excellence' in cardiac care.

The services include both invasive and non-invasive procedures along with all

necessary diagnostic facilities.

OBJECTIVES

Setting best practice standards in our services, continuously improving

performance and exceeding the expectations of patients and their families.

Training and developing the best human resource as the key to deliver

Superior patient service.

Consistently investing in technology and infrastructure to match International

Benchmarks.



Building and maintaining long-term patient relationships, so as to become

an essential resource for their well being.

Leading the development of professional standards in Healthcare

Management.

Continuously educating the community in the prevention of cardiac disorders.

International Alliances

A trusted name in Healthcare, Wockhardt Hospitals treat patients from all over South

Asia, South East Asia, the Middle East and Africa. A significant endorsement for

Wockhardt Hospitals is its tie-up with many global health insurance giants.

Wockhardt Hospitals is the first recognized hospital in South Asia on the worldwide

panel of BlueCross BlueShield, the largest provider of health insurance in USA.

The lists of global tie-ups are:

* Blue Cross & Blue Shield Association, USA

* SOS International Inc. Singapore

* Global Emergency Services Inc. USA

* BUPA, UK

* MEDEX Inc. USA

* Global Medicine Management Inc. USA

* Assist America Inc. USA



* GESA Assistance, Singapore

HARVARD MEDICAL INTERNATIONAL (HMI) ALLIANCE

In pursuance of its vision to establish state-of-the-art medical facilities in India with

high degree of clinical excellence, Wockhardt Hospitals has entered into two strategic

alliances with Harvard Medical International (HMI).

A long-term exclusive agreement with Harvard Medical International, Boston,USA,

whereby Wockhardt has access to Harvard's expertise and experience in the field of

surgical and medicare services, as well as in setting up and developing hospitals of

excellence throughout the world.

Wockhardt surgeons and paramedical staff will also benefit from Harvard Medical

training and induction in critical surgical and medicare services at Harvard's institutes

at Boston, USA, as well as at Wockhardt Hospitals.

As an associate hospital of Harvard Medical International, in India, Wockhardt

Hospitals derives knowledge from various Harvard associated hospitals in the world

to bring you the global standards in technology and expertise.



Wockhardt will also benefit from the extensive learning and experience of Harvard

Medical School. This association will always help Wockhardt Hospitals to stay at the

forefront of medical technology and techniques, ahead of others.

Harvard Medical International

Harvard Medical International (HMI) "a non-profit organization" was established to

extend Harvard Medical School's tradition of improving the quality of health care

through excellence in clinical medicine, medical education and biomedical research.

Adhering to the standards that have made Harvard one of the most respected

academic medical institutions in the world, HMI utilizes the talents of the Faculty of

Medicine, it's affiliated institutions and selected strategic partners. It has an extensive

knowledge base in clinical and biomedical research.

www.hms.harvard.edu/hmi/newindex.html

Partnership Principles

Drawing upon the resources of Harvard Medical School and its affiliated institutions,

HMI is creating unique programs for Wockhardt hospitals committed to high quality

healthcare. The guiding principles used by HMI in this relationship are to maintain

medical integrity, objectivity and academic independence.


http://www.hms.harvard.edu/hmi/newindex.html


A Partnership of Medical Excellence

Harvard Medical International will associate with Wockhardt Hospitals in improving

patient-centered quality care particularly in the areas of:

# Facility development and Leadership programs

# Nursing excellence

# Quality management

# Organizational strategic planning and development

# IT strategies and provider network development

# Clinical education and clinical investigator training

# Research program development

# Adapting to managed care environment

Nursing Care

Wockhardt follows global standards in nursing care. We believe that good nursing

practices create sensitive healthcare institutions.

Constant interaction and training from Harvard Medical faculty has inculcated not just

high levels of academic orientation but also a feeling of "Service from the Heart".

Continuous nursing education programs and a specialized one-year course in

Cardiovascular and Thoracic nursing make Wockhardt nurses excel in

the art of patient care.

Milestones



The 1st Hospital in India to perform Minimally Invasive Coronary

Artery Bypass surgery.

The 1st Single specialty dedicated Heart Center in South India.

The 1st Corporate Hospitals to cross 1000 Open Heart surgeries in

Karnataka and now having performed over 7800 Cardiac surgeries.

The 1st Hospital to perform Intra-Coronary Stent Implantation, Mitral

Valvuloplasty, Rotablator, Coil Closure for Ductus & Internal Carotid

Angioplasty in Karnataka.

The 1st Corporate Hospital to introduce Primary Angioplasty & Intra

Coronary Ultrasound facilities in Karnataka.

The 1st Hospital in India to perform Vertebral Artery Angioplasty.

The 1st Hospital in India to launch an Emergency Cardiacare services

through "The Wockhardt Cardiac Line."



The 1st Hospital in South Asia to be recognized by the American

BlueCross BlueShield.

Association on their worldwide network of participating hospitals.

The 1st heart hospital to achieve ISO 9002 certification.

Pioneered Stone Management and Key Hole surgery in Eastern India

and Bangladesh.

CHAPTER-4



ANALYSIS

The term “Analysis” is used to mean the simplification of financial data by

methodological classification of the given data.

The data once collected need to be processed, as they cannot straight away provide

answers to research questions. They are like raw materials, which needs processing.

Data processing involves classifications & summarization of data.

Data processing is an intermediary stage of work between data collection and data

analysis.



To analyze the data it was first classified according to different sections in the

pathology department i.e. Biochemistry, Haematology, serology, microbiology, &

clinical pathology. Than other information like the tests done under each of these

sections, the equipment/ instrument used, reagents, controls & calibrations and other

consumables required were classified & coded.

After classification and coding the mass data was tabulated in a concise logical order

in rows and columns along with its statistical figures to analyze the cost.

In order to extract meaningful information from the collected data, data analysis is

carried out. The data was first classified, coded and tabulated for the purpose of

analyzing & interpreting the same.

INTERPRETATION

Interpretation means explaining the meaning and significance of the data so

simplified/Analyzed. However, both analysis and interpretation are inter linked and

complementary to each other. Analysis is useless without interpretation and

interpretation with out analysis is difficult or even impossible. The objective of

analysis is to study the relationship between the various elements of a financial

statement by interpretation.



Under the technique of marginal costing the total cost is divided into variable cost and

fixed cost.

Table showing the total variable cost per unit

WOCKHARDT HOSPITALS LIMITED

: LABORATORY (PATHOLOGY) COSTING

TOTAL

V.C

JAN-07 NAME OF

THE TEST

REAGENTS

USED COST

No/of/

Test

Reagen

t

Control

/

Caliber

ator

Consu

me-

ables

TOTAL

V.C

JAN-08

1(A)

BIOCHEMI

STRY

(HITACHI)

21.44 Glucose

(FBS, PPBS,

PLBS, RBS)

Glucose (FBS,

PPBS, PLBS, RBS) 8,938 800

11.17

2

.74 1.89 15.80

29.80

Urea Urea 11,332 500

22.66

2

.74 1.89 27.29

25.20

Creatine Creatine 5,991 450

13.3

1

2

.74 1.89 17.94

41.68

Total bilirubin Total bilirubin 9,166 450

20.3

7

2

.74 1.89 25.00

23.89 Alkaline Alkaline 10,479 450 23.2 2 1.89 27.92



phosphateser phosphateser 9 .74

43.08

SGOT AST 9,549 450

21.2

2

2

.74 1.89 25.85

43.08

SGPT ALT 9,549 450

21.2

2

2

.74 1.89 25.85

Total protein Total protein 800 280

2.8

6

2

.74 1.89 7.49

19.22

Albumin Albumin 6,352 450

14.1

2

2

.74 1.89 18.75

34.98

GGT GGT 24,010 400

60.0

3

2

.74 1.89 64.66

42.37

Cholesterol Cholesterol 14,096 750

18.7

9

2

.74 1.89 23.42

38.59

Triglycerides Triglycerides 28,861 700

41.2

3

2

.74 1.89 45.86

66.20 HDL-

cholesterol HDL-cholesterol 16,002 120

133.

35

2

.45 1.89 137.69

LDL-

cholesterol LDL-cholesterol 39,414 400

98.5

4 1.89 100.43

23.31 Uric acid Uric acid 9,094 500

18.1

9

2

.74 1.89 22.82

GTT

GTT (5 times of

glucose) 78.95 78.95

Random urine

creatine

Random urine

creatine (creatine)18 17.93



CALCULATI

ONS:

CONTROL: Cost

No of

test

Precinorm U 3,523 3900 0.90

Preipath U 3,970 3900 1.02

CALIBRATO

R:

C.F.A.S 9,555 11700 0.82

2.74

Calibrator kit

for HDL 10,279 4200 2.45

CONSUMABL

ES:

Hitergent wash 4,443 11700 0.38

Lamp Cost 17715 11700 1.51

1.89

INTERPRETATION – 1(A)



In the pathology department under biochemistry section on the equipment named

Hitachi 17 different tests are being done. To do these tests the required reagent cost is

divided by the number of tests done using that reagent, to get the reagent cost per test

along with this the other costs like the control/caliberator and consumables costs are

added to get the total variable cost per test.

The current cost when compared to the cost in jan-06 there is an increase as well as

decrease in the cost of the tests. The costs for some tests have decreased because the

suppliers have offered discounts, i.e.glucose-44% discount is given, creatine-50%,

cholesterol-54%, bilirubin, SGOT &SGPT-49%, and urea & albumin-20%.

Hence the variable costs for these tests have gone down, but the costs of remaining

tests have gone up for e.g. HDL cholesterol in the year 07 was costing 66.62/- but for

the year –08 it is 137.69/- therefore there is an increase of 71.07/-.

Note: - The tests for which the cost in jan-07 has not been mentioned are the newly

introduced tests.


TOTA

L

V.C

JAN-07

NAME OF

THE TEST

REAGENT

S USED COST

No/of

/

Test Reagent

Contr

ol/

Calibe

rator

Cons

ume-

ables

TOTAL

V.C

JAN-08

1(B)

BICHEMISTR

Y

ERBA/TECNO

168:



47.90 LDH LDH 1,401 25 56.04 56.04

188.24 CPK CPK 6810 35 194.57 194.57

162.57 Amylase Amylase 5,818 35 166.23 166.23

15.24 Calcium Calcium 1,115 40 27.88 27.88

19.5 Phosphorous

Phosphorou

s 441 20 22.05 22.05

45.36 Magnesium Magnesium 1,489 30 49.63 49.63

INTERPRETATION- 1(B)

In the biochemistry section on the equipment named ERBA/TECNO 168, six

different types of tests are being done. When compared to the year 2007 the cost has

increased in the year 2008 i.e. the cost for CPK in the year-07 was 188.24/- but in the

year-08 it is increased to 194.57/- hence there is an increase in variable cost up to

6.33/- per unit.



Table showing the variable cost per unit

TOTA

L

V.C

JAN-

07

NAME OF

THE TEST

REAGEN

TS USED

COS

T

NO/O

F/

TES

T

REAGE

NT

CONTR

OL/

CALIBE

RATOR

CONS

UM-

ABLES

TOTAL

V.C

JAN-08

1(C) ELECYS

1010

97.74 T3 T3 8,531 175 48.75

36.7

3 81.14 166.62

149.24 T4 T4 17,847 175 101.98

36.7

3 81.14 219.85

104.32 TSH TSH 9,721 175 55.55

36.7

3 81.14 173.42

160.56 FSH FSH 11,865 70 169.50

203.

28 81.14 453.92

202.85 LH LH 11,866 70 169.51

203.

28 81.14 453.93

281.74 Prolactin Prolactin 17,477 70 249.67

210.

78 81.14 541.59

246.91 PSA PSA 12,247 70 174.96

394.

73 81.14 650.83

CKMB 6,273 75 83.64 21.8 81.14 186.58



125.93 CKMB 0

67.98 TNT TNT 17,753 75 236.71

25.8

1 81.14 343.66

347.64 Beta HCG Beta HCG 18,392 70 262.74

435.

55 81.14 779.43

INTERPRETATION - 1(C)

On the equipment named ELECYS 1010- under biochemistry section as shown above

the variable cost per unit of all the tests have increased. For example T3 the cost for

the year-07 was 97.74/- there is been an increase up to 166.62/- in the year-08

therefore there is an increase of 66.88/- per unit.


TOTA

L

V.C

JAN-

07

NAME OF

THE TEST

REAGENT

S USED

COS

T

NO/

OF/

TE

ST

REAGE

NT

CONTR

OL/

CALIBE

RATOR

CONS

UM-

ABLES

TOTAL

V.C

JAN-08

1(D) NYCARD

Glycosylaye

d

Hemoglobi

Nycard

reagent

3960 22 180.00 180.00



172 n

15.67

24 hr urine

Protein Preccugent 1064 50 21.28 21.28

INTERPRETATION - 1(D)

Under this NYCARD instrument two types of tests are being done. The cost of micro

protein for the year-07 was 15.67/- which in the year-08 is increased to 21.28/- that is

there is an increase of 5.61/- per unit


TOT

AL NAME OF

THE TEST

REAGENT

S USED

COS

T

NO/

OF/

REAGE

NT

CONTR

OL/

CALIBE

CONS

UM-

ABLES TOTAL



V.C

JAN-

07

TE

ST RATOR

V.C

JAN-08

1(E) ECOLYTE

-2

ECOSYS-2

26

Electrolyte 68500

26

ABG 68500

13700

0 3600 38.06

0.3

9 38.44

CONTROL

ABG

&ELECTR

OLYTE

CONTROL 5582 14400 0.39

INTERPRETATION –1(E)

Under the biochemistry section there are four instruments that is ECOLYTE –2 and

ECOSYS –2, on which two different types of tests i.e. electrolyte & ABG are done

the cost for both the tests have increased by 12.44/- each




TOTAL

V.C

JAN-07

NAME OF THE

TEST

REAGENTS

USED

CO

ST

NO/O

F/

TES

T

REAG

ENT

CON

TRO

L/

CALI

BER

ATO

R

CON

SUM-

ABLE

S

TOTAL

V.C

JAN-08

2 HAEMATOLOG

Y

(SYSMAX

1000/4500)

Haematology

profile:

Platelet count Cell pack 5,037 2860

1.

76

TC Cell clean 6,115 11700

0.

52

DC Sulfoliser 37499 7800

4.

81

PCV Stromatolyser 37499 7800

4.

81



12.62 RBC

11.

90

1.98

3.

68 17.56

MCV

MCHC

MCH

Haematology

CONTROL 7,738 3900

1.

98

109.56

PT (ERBA -

COAG UNO)

Thromborel -

Dade 2,568 50

51.

36

61.15 112.51

PT CONTROL 4892 80

61.

15

P.T.T Liquiceline 573 20

28.

65

Calcium

chloride 137 80

1.

71

28.39 30.

36 30.36

Blood group Anti-A 224 160

1.

40



Anti-B 229 160

1.

43

Anti-D 404 160

2.

53

Anti-H 299 150

1.

99

4.56 7.

35 7.35

5.74

RC

Reticulocyte

fluid 287 50

5.

74 5.74

14.74

PFM, AEC&

BONE MARROW (Sysmex) 17.56

0.97

BT (Needle cost) 5 1

5.

00 5.00

0.97

CT 15 1

15.

00 15.00

D.DIMER D.dimer 6,000 20

300.

00 300.00

7.10 ESR ESR tubes 1,064 190

5.

60

1.

50 7.10



MP

QBC heam

tubes 10,109 200

50.

55

(Sysmex

reagent cost)

11.

90

52.71

62.

45

3.

68 66.13

COOMBS TEST

(Direct & indirect)

Anti coombs

sera 499 30

16.

63

Anti A lectin 197 10

19.

70

Bovine

albumin 191 20

9.

55

35 45.

88 45.88

LE CELLS (Needle cost) 14 1

14.

00

(Sysmex

reagent cost) 11.9 1

11.

90

25. 3. 29.58



29 90 68

CONSUMAB

LES

Leishman stain 254 240

1.

06

Immersion oil 264 180

1.

47

Ceder wood oil 208 180

1.

16

3.

68

Tri sodium

citrate (ESR)

1.

50

INTERPRETATION –2

Under the hematology section 13 different types of tests are under taken the close

evaluation of each reveals that for all the tests there is been an increase in the cost per

unit.

For example under the hematology profile the cost for the year-07 was 12.62/- but

when compared to the cost in the year-08 it is 17.56/- hence there is an increase of

4.94/- per unit.




TOT

AL

V.C

JAN-

07

NAME OF

THE TEST

REAGENTS

USED

COS

T

NO/O

F/

TES

T

REAGE

NT

CONTR

OL/

CALIBE

RATOR

CON

SUM-

ABLE

S

TOTAL

V.C

JAN-08

3

SEROLOG

Y -ECI

124.61Hbsag 6630 75 88.40

13.

30

37.

67 139.37

171.46HIV 9945 75

132.6

0

11.

66

37.

67 181.93

261.68HCV 16575 75

221.0

0

12.

71

37.

67 271.38

CALCULATI

ONS

Hbsag control 7735 900 8.59

Hbsag

caliberator 12708 2700 4.71

13.30



HIV control 8840 900 9.82

HIV


11.66

HCV control 2873 400 7.18

HCV


12.71

CONSUMAB

LES

NO/OF

TEST

COS

T

Signal reagent 5525 9

49,725.0

0

Universal wash 11050 3

33,150.0

0

82,875.0

0 2,200

37.

67

SEROLOG

Y (CARD

METHOD)

23.9 HBSAG 600 25 24.00 24.00



78

HIV 4150 40

103.7

5 103.75

117.50

HCV 954 8

119.2

5 119.25

7.93 VRDL 255 30 8.50 8.50

32.83 RA 499 15 33.27 33.27

45.77 CRP 2746 60 45.77 45.77

51.60 ASLO 2786 60 46.43 46.43

28 WIDAL 468 15 31.20 31.20

4.90 MANTOUX

TEST 113 20 5.65 5.65

34.35

PREGNANC

Y TEST 640 18 35.56 35.56

INTERPRETATION –3

Under the serology section there are two methods of doing the tests, one is using ECI

instrument & the other one is card method. Under both the methods the cost for the

year-07 has gone up when compared to the cost in the year-08.

Using ECI- for example the cost to do HIV test in the year-07 was 171.46/- but in the

year-08 the cost is 181.93/- hence there is an increase of 10.47/- per test.



Under card method the cost to do HIV test in the year-07 was 78/- when compared the

cost in the year-08 is 103.75/- therefore there is an increase of 25.75/- per unit/test.




JAN-

07

TESTS

NAME OF THE

REAGENT COST

TES

T/

KIT

RE -

AGENT TOTAL

V.C -08

4 MICROBIOL

OGY:

BLOOD

CULTURE & BLOOD AGAR PLATE 25 1 25

SENSITIVITY BA/MA PLATE 25 1 25

BRAIN HEART

INF.BROTH 22 1

22

MULLER HINTON

AGAR PLATE 17 1 17

UREASE 18 1 18

TRIPLE SUGAR IRON 17 1 17

44.86 ISOPROPANOL 77 500 0.154 124.154

URINE

CULTURE &

SENSITIVITY

MAC CONKEY AGAR

PLATE 25 1

25



MULLER HINTON

AGAR PLATE 17 1

17

UREASE 18 1 18

CITRATE 21 1 21

25.63 TRIPLE SUGAR IRON 17 1 17 98

SPUTUM

CULTURE &

SENSITIVITY

MAC CONKEY AGAR

PLATE 25 1 25

BA/CA PLATE 25 1 25

MULLER HINTON

AGAR PLATE 17 1 17

UREASE 18 1 18

CITRATE 21 1 21

23.87 TRIPLE SUGAR IRON 17 1 17 123

ASPIRATED

FLUID

MAC CONKEY AGAR

PLATE 25 1 25

SEMEN C/S BA/CA PLATE 25 1 25

PUS C/S

MULLER HINTON

AGAR PLATE 17 1 17

SUCTION UREASE 18 1 18



TIPS

CATHETER

TIPS CITRATE 21 1 21


BRAIN HEART

INF.BROTH 22 1 22 145

NASAL SWAB

MAC CONKEY AGAR

PLATE 25 1 25

WOUND

SWAB BA/CA PLATE 25 1 25

MULLER HINTON

AGAR PLATE 17 1 17

UREASE 18 1 18

CITRATE 21 1 21


STERILE SWAB 7 1 7 130

THROAT

SWAB BLOOD AGAR PLATE 25 1 25

STERILE SWAB 7 1 7

30.72 DISC 6 1 6 38



SMEAR &

STAIN

(AFB

MALACHITE GREEN

SOLUTION 69 100 0.69

CARBOL FUSELIN 62 100 0.62

SULPHURIC ACID 48 150 0.32 1.63

GRAM &

FUNGAL

SMEAR) ACETONE 82 300 0.27

CRYSTAL VIOLET

STAIN 58 150 0.39

GRAMS IODINE

SLUTION 71 125 0.57

CARBOL FUSELIN 62 100 0.62 1.85

STOOL C/S

< 2 YEARS MA 25 1 25

MACS 25 1 25

SS AGAR 22 1 22

TSI 17 1 17

UREASE 18 1 18

MH 17 1 17

69.84 DISC 6 1 6 130



> 2 YEARS MA 25 1 25

BSA/SS 25 1 25

MH 17 1 17

TSI 17 1 17

UREASE 18 1 18

DISC 6 1 6 108

ANAEROBIC

CULTURE FTM 17 1 17 17

13.92 AFB

CULTURE LJ MEDIUM 28 1 28 28

FUNGAL

CULTURE

SAB/DEATROSE

AGAR 22 1 22 22

INTERPRETATION – 4

In the microbiology section also the variable cost per test have increased , example for

Blood culture & sensitivity the cost for the year-07 was 44.86/- but in the year-08 it is

124.154/- therefore there is an increase of 79.29/- per unit



As mentioned earlier the cost of many newly introduced tests have been calculated

afresh hence they cannot be compared as the current year is only the base year for

such types of tests.




V.C

JAN-07

TESTS

NAME 0F THE

REAGENT COST

TEST

/KIT

RE -

AGENT

CONT-

-ROL

TOTAL

V.C

JAN-08

5

CLINICAL

PATHOLOGY:

URINE

ROUTINE:

SPECIFIC

GRAVITY

BLOOD

PH

16.82 UROBILINOGE

N

URINE

ROUTINE -

MULTISTIX 1399 90 15.54 2.66 18.2

4.00 SUGAR - DIASTIX 161 40 4.03 4.03

5.37 KETONES - KITODIASTIX 218 40 5.45 5.45

ALBUMIN

BILESALTS & SLIDE COST 1.17 1 1.17

BILEPIGMENTS (FOUCHETS) 68 15 4.53 5.7



URINE DRUGS

AMPHETAMIN

ES 2375 22 107.95 107.95

COCAINE 2375 22 107.95 107.95

MARIJUANA

(THC) 2375 22 107.95 107.95

MORPHINE 2375 22 107.95 107.95

PENCY 2375 22 107.95 107.95

URINE

CONTROL 15932 6000 2.66

STOOL

ROUTINE:

STOOL

HANGING

DROP SLIDE 1.17

STOOL FOR

REDUCING

SUBSTANCE COVER SLIP 1

ROUTINE

ANALYSIS

CONTAINER

COST 3.5 5.67

4.53 STOOL FOR

OCCULT

(CONTAINER

COST &

8.03



BLOOD FOUCHETS)

INTERPRETATION – 5

This is the last section of the department and as seen earlier the above figures show a

slight increase in the total variable cost per unit.

For example under the urine routine analysis multistix cost for the year-07 was

16.82/- where as in the year-08 it is 18.20/- therefore there is an increase of 1.38/-per

unit.

CALCULATION OF FIXED COST – JAN-08

SALARIES

Salaries for senior technicians (2)

Rs 12,800/month total amount =25,600/-

Salaries for technicians (10)

Rs 5,650/month total amount = 56,500/-

Salaries for receptionists (2)




Salaries for housekeeping boys (3)


TOTAL SALARIES =1,00,000/-

RENT

The area estimate is 1300 sq.feet

The market rate/sq.feet is Rs 30.

MONTHLY RENT = 39,000/-

DEPRECIATION

Depreciation on computers

Depreciation is calculated at the rate of 20%, the total amount of two systems with

one printer is Rs 75,000.

The depreciated amount will be = 15,000/-

Depreciation on furniture

Depreciation on is calculated at the rate of 20%, the total amount of furniture is Rs

20,000

The depreciated amount will be = 4,000/-

TOTAL DEPRECIATION =19,000/-



POWER

The power consumption is 10 units/hr @ 5.50/unit

The pathology department functions for 24 hours

Daily power consumption = 1,320/-

MONTHLY POWER CONSUMPTION =39,600/-

MISCELLANEOUS EXPENSES

This includes the administrative cost, maintenance cost, marketing cost & annual

maintenance contract cost.

MONTHLY ESTIMATES =25,500/-



Table showing the total of fixed cost is shown as under:

FIXED COST JAN-07 JAN-08

Salaries 94,865 1,00,000

Rent 30,000 39,000

Power 32,400 39,600

Depreciation 16,000 19,000

Miscellaneous 20,835 25,500

TOTAL FIXED COST 1,94,100 2,23,100

Based on the analysis of cost for the individual tests following health check up

packages are revised.



A.EXECUTIVE HEART CHECK

PARTICULARS JAN-07 JAN-08

SALE PRICE 2100 2100

(-) VARIABLE COST

Hematology with ESR 19.72 24.66

FBS & PPBS 21.44 15.8

Blood group & Rh 4.56 7.35

KIDENEY PROFILE Blood urea nitrogen 29.8 27.29

Serum creatinine 25.2 17.94

Uric acid 23.31 22.82 LIPID PROFILE

Sr.cholesterol 42.37 23.42

Sr.triglycerides 38.59 45.86

Urine routine 26.19 36.88

Stool routine 10.24 13.7

VDRL 7.93 8.5 Ultra sound scan 410.28 415

Chest X-RAY 125 130

ECG 28.78 30



LIVER FUNCTINING TESTS

Total bilirubin 41.68 25

Total protein A/g Ratio - 7.48

GGT 34.98 64.66 SGOT 43.08 25.85 SGPT 43.08 25.85 Sr.alkaline phosphate 23.89 27.92

Vacutainer cost 10.75 12.69

Stationeary 22 25

Consultation with physician

100 100

Consultation with dietician

150 1283 150 1284

CONTRIBUTION(PER UNIT)

817 816



B.MASTER HEALTH CHECK


SALE PRICE

(-) VARIABLE COST

Haematology with ESR

FBS & PPBS

Blood group & Rh

KIDENEY PROFILE

Blood urea nitrogen

Serum creatinine

Uric acid

LIPID PROFILE

Sr.cholesterol

Sr.triglycerides

HDL

LDL

LIVER FUNCTINING TESTS

Total bilirubin

19.72

21.44

4.56

29.80

25.20

23.31

42.37

38.59

66.62

-

41.68

2800

24.66

15.80

7.35

27.29

17.94

22.82

23.42

45.86

137.69

100.43

25

2800



Total protein A/g Ratio

GGT

SGOT

SGPT

Sr.alkaline phosphate

Urine routine

Stool routine

VDRL

Ultra sound scan

Chest X-RAY

ECG

Spirometry

Stress test

Vacutainer cost

Stationeary



-

34.98

43.08

43.08

23.89

26.19

10.24

7.93

410.28

125.00

28.78

100

336.34

10.75

22.00

100.00

150.00 1786

7.48

64.66

25.85

25.85

27.92

36.88

13.70

8.50

415.0

130

30

100

340

12.69

25.00

100.00

150.00 1962



CONTRIBUTION

(PER UNIT)

1,014.00 838.00



C.BASIC HEART CHECK

PARTICULARS 7-

JAN8-JAN

PRICE 800 800(-) VARIABLE COST


Blood group and Rh 19.72 24.66

RBS 4.56 7.35 Serum cholesterol 21.44 15.8

VDRL 42.37 23.42 Urine routine 7.93 8.5

Chest X-RAY 26.19 36.88

ECG 125 130 Vacutainer cost 28.78 30

Stationery 10.75 12.69


22 25

100 100 408.7 414.3

CONTRIBUTION

(per unit)

391.3 385.7



D.BASIC HEART CHECK

PARTICULARS 7-JAN

8-JAN

SALE PRICE 550 550(-) VARIABLE COST Hb,TC,DC

FBS 12.62 17.56 Sr. cholesterol 21.44 15.8

Sr. trigiycerides 42.37 23.46

Sr. creatinine 38.59 45.86

Potassium(electrolyte) 25.2 17.94

Urine protine 26 38.44

Vacutainer cost 15.67 21.28

Stationery 10.75 12.69

Consultation with diabetologist

22 25

150 365 150 367.99 CONTRIBUTION

(PER UNIT) 185 182

E.COMPREHENSIVE HEART CHECK




SALE PRICE

(-)VARIABLE COST


FBS & PPBS

LIPID PROFILE

Sr. cholesterol

Sr. HDL cholesterol

Sr. LDL cholesterol

Sr. triglycerides

Chest X-RAY

Ultra sound scan

Stress test

Echocardiography with color Doppler

Vacutainer cost

stationeary

Consultation with cardiologist


CONTRIBUTION (per unit)

19.72

21.44

42.37

66.62

-

38.59

125

410.28

336.34

461.18

10.75

22

150

150

2800

1854

946

24.66

15.80

23.42

137.69

100.43

45.86

130

415

340

465

12.69

25

150

150

2800

2036

764



F.WELL WOMEN PROFILE


SALE PRICE

(-) VARIABLE COST


Blood group

T3

T4

TSH

Pap smear

FBS

VDRL

Urine routine

Ultra sound scan

Vacutainer cost

Stationeary

Consultation with gynecologist

19.72

4.56

97.74

149.24

104.32

-

21.44

7.93

26.19

410.28

10.75

22

150

1800

1024

24.66

7.35

166.62

219.85

173.42

3.48

15.80

8.50

36.88

415

12.69

25

150

1800

1259



CONTRIBUTION

(PER UNIT)

776 541

G. SENIOR CITIZENS PROFILE


SALE PRICE

(-) VARIABLE COST


FBS

LIVER FUNCTION TESTS

Total protine A/g ratio

19.72

21.44

-

1700

24.66

15.80

7.48

1700



SGPT

SGOT

Sr.Alkaline phosphate

LIPID PROFILE

Cholesterol

Triglycerides

Inorganic phosphorous

Urine analysis

TSH

Calcium

PSA

Chest X-RAY

ECG

Vacutainer cost

Stationary


Consultation with geriatrician

CONTRIBUTION

(PER UNIT)

43.08

43.08

23.89

42.37

38.59

-

26.19

104.32

15.24

246.91

125

28.78

10.75

22

150

150 1111

589

25.85

25.85

27.92

23.42

45.86

22.05

36.88

173.42

27.88

650.83

130

30

12.69

25

150

150 1606

94





I.WOCKHARDT HEALTH MANAGEMENT PROGRAMME

PARTICULARS JAN-07

JAN-08

SALE PRICE

(-) VARIABLE COST


FBS & PPBS

Blood group & Rh

Stool examination

Urine analysis

LIPID PROFILE

Cholesterol

Triglycerides

HDL

LDL

KIDNEY PROFILE

Blood urea nitrogen

Creatine

19.72

21.44

4.56

10.24

26.19

42.37

38.59

66.62

-

29.80

25.20

4200

24.66

15.80

7.35

13.70

36.88

23.42

45.86

137.69

100.43

27.29

17.94

4200



Uric acid

LIVER FUNCTION TESTS

Total Bilirubin

Total protein A/G ratio

GGT

SGOT

SGPT

Alkaline Phosphate

PSA

Chest X-Ray

Ultra sound scan

Echocardiography with col.Doppler

Stress test

Spirometry

ECG

Vacutainer cost

stationery


Consultation with cardiologist

Consultation with opthalmologist


Stress screening by psychologist

23.31

41.68

-

34.98

43.08

43.08

23.89

246.91

125

410.28

461.18

336.34

100

28.78

10.75

22

150

150

150

100

150

2936

22.82

25

7.48

64.66

25.85

25.85

27.92

650.83

130

415

465

340

100

30

12.69

25

150

150

150

100

150

3519



CONTRIBUTION

(PER UNIT)

1264 681

TABLE SHOWING THE TOTAL CONTRIBUTION AND

PROFIT

PARTICULARS SALES

JAN-

07

CONTRI

B-

UTION

(PER

UNIT)

TOTAL

CONTRIB-

UTION

SALE

S

JAN-

08

CONTRI

B-

UTION

(PER

UNIT)

TOTAL

CONTRIBUT

-ION

A. Basic

Health Screening



400 391 1,56,400 500 386 1,93,000

B. Diabetic

Health Check 300 185 55,500 350 182 67,700

C. Executive

Health Check 70 817 57,190 100 816 81,600

D. Master Health

Check 75 1,014 76,050 100 838 83,800

E. Basic Heart

Check 250 325 81,250 300 154 46,200

F. Comprehensive

Heart Check 400 946 3,78,400 500 764 3,82,000

G. Well Women

Profile 50 776 38,800 100 541 54,100

H. Senior

Citizen’s Profile 250 589 1,47,250 350 94 32,900

I. Wockhardt

Health

Management

Programme

100 1,264 1,26,400 150 681 1,02,150

TOTAL

CONTRIBUTIO

N

11,17,24

0

10,43,450

(-) FIXED COST (-)

1,94,100

(-) 2,23,100



TOTAL PROFIT 9,23,140 8,20,350

INTERPRETATION

As shown in the above table the sales in the month of jan-08 has shown an

increasing trend when compared with the number of units sold in jan-07. Though

the sales is increased, there is a considerable amount of decrease in the profit i.e.

for jan-07 it was 9,23,140/- but in jan-08 it is decreased to 8,20,350/- therefore

there is a decrease by 1,02,790/- it can be said that there is a decrease in profit by

11%.

The reason for this decrease is due to the decrease in contribution per unit in turn

it is the increase in the variable cost per unit of the all the health check up

packages and also because of the increase in the fixed cost due to internal and

external factors.

From the above analysis & interpretation the following revisions in the selling prices

are being considered which is as follows:



1. IF THERE IS AN INCREASES IN THE SELLING PRICE BY 10%

PARTI

C-

ULARS

SELLIN

G

PRICE

1

10%

INCREAS

E

2

REVISE

D

PRICE

(1+2)=

3

(-)

V.C

4

CONTR

I-

BUTIO

N

(3-4)=5

SALE

S

UNIT

S

6

TOTAL

CONTR

I-

BUTIO

N

(5*6)=7

A

800 80 880 414 466 500 2,33,000

B

550 55 605 368 237 350 82,950

C 2,100 210 2,310 128

4

1026 100 1,02,600

D 2,800 280 3,080 196

2

1118 100 1,11,800

E 1,000 100 1,100 846 254 300 76,200

F 2,800 280 3,080 203

6

1044 500 5,22,000



G 1,800 180 1,980 125

9

721 100 72,100

H 1,700 170 1,870 160

6

264 350 92,400

I 4,200 420 4,620 351

9

1101 150 1,65,150

TOTAL 12,25,20

0

(-) F.C 2,23,100

PROFI

T

10,02,10

0



2. IF THERE IS AN INCREASE IN SELLING PRICE BY 15%

PARTI

C-

ULARS

SELLIN

G

PRICE

1

15%

INCREAS

E

2

REVISE

D

PRICE

(1+2)=

3

(-)

V.C

4

CONTR

I-

BUTIO

N

(3-4)=5

SALE

S

UNIT

S

6

TOTAL

CONTR

I-

BUTIO

N

(5*6)=7

A

800 120 920 414 506 500 253000

B

550 83 633 368 265 350 92750

C 2,100 315 2415 128

4

1131 100 113100

D 2,800 420 3220 196

2

1258 100 125800

E 1,000 150 1150 846 304 300 91200

F 2,800 420 3220 203

6

1184 500 592000

G 1,800 270 2070 125 811 100 81100



9

H 1,700 255 1955 160

6

349 350 122150

I 4,200 630 4830 351

9

1311 150 196650

TOTAL 16,67,75

0

(-) F.C 223100

PROFI

T

14,44,65

0

3. IF THERE IS AN INCREASE IN SELLING PRICE BY 20%

PARTI

C-

ULARS

SELLIN

G

PRICE

20%

INCREAS

E

REVISE

D

PRICE

(-)

V.C

4

CONTR

I-

BUTIO

N

SALE

S

UNIT

S

TOTAL

CONTR

I-

BUTIO



1 2 (1+2)=

3 (3-4)=5 6

N

(5*6)=7

A

800 160 960 414 546 500 273000

B

550 110 660 368 292 350 102200

C 2,100 420 2520 128

4

1236 100 123600

D 2,800 560 3360 196

2

398 100 39800

E 1,000 200 1200 846 354 300 106200

F 2,800 560 3360 203

6

1324 500 662000

G 1,800 360 2160 125

9

901 100 90100

H 1,700 340 2040 160

6

434 350 151900

I 4,200 840 5040 351 1521 150 228150



9

TOTAL 1776950

(-) F.C 223100

PROFI

T

1553850



CHAPTER-

5



FINDINGS

The following findings have been interpreted

1) The variable cost for all the health check up packages (test) have increased

due to hike in reagents cost, control/calibration cost and consumables costs.

2) The fixed cost which consists of salaries, rent, power, depreciation and

miscellaneous expenses have been hiked considerably due to internal and

external factors such as employee remuneration, government policies etc.

3) The contribution per unit of all the health check up packages has reduced due

to the increase in variable cost.

4) There has been an increase in the total lost and hence the overall profit is

reduced.



5) The fixed cost for jan-2007 was 1,94,140/- which is increased in jan-2008 by

2,23,100/- net increase in fixed cost to 115%.

SUGGESTIONS

Keeping in view the objectives the following suggestions are put forth:

1. Keeping in view of increase invariable cost and fixed cost the prices are to be

revised once in two years so as to earn fair margin, it is recommended to

increase the selling price by 15% on sales.

2. The hospital is being efficient enough; it requires to have a continuous review

of the costs pertaining to pathology department.

3. The health check up package is mostly under taken by the corporate hence the

hospital should maintain a good relation with the corporate sectors and interact

frequently with employees which in turn will help to gain the patients

confidence and trust in the hospital by organizing health awareness

programmes.



4. The hospital should promote its services by making the public aware of its

facilities and services through media.

5. To maintain and increase its sales volume the hospital needs to concentrate

more on un-captured sectors, by building a good relationship with them in order to

make permanent tie-up.

CONCLUSION

The efficient administration of any organization depends upon the efficient utilization

of its resources- 5Ms namely Men, Machine, Material, Market and Money, a health

care institution is no exception to this.

The pivotal role of money is evident from the fact that, itself being a resource,

money is used for acquiring as well as having command over the other resources and

also for measuring the changes in them.

The rapid growth in health care facilities, scientific and technological innovations

makes the decision making process even more complex. Understanding the financial,

cost and economic implication of decision making is one of the most critical areas

encountered by health care decisions maker.



In the present health scenario, which is very dynamic, it is imperative for a health

care professional to have a sound knowledge of cost accounting and efficient financial

and cost administration/management.

After analysis the data I, have come to a conclusion that no doubt the hospital is

efficient in increasing its sales, but due to the increase in the total cost its profit is

been affected and hence I, also feel that there is an urgent need to revise their selling

price. As per the company policy keeping in view the long run 15% hike in the selling

price is required.



BALANCE SHEET OF WOCKHARDT HOSPITAL

PARTICULARS 2006 2007 2008

SOURCES OF FUNDS

EQUITY SHARE CAPITAL 6 6 25

PREFERENCE SHARE CAPITAL 0 0 25

RESERVES AND SURPLUS 0.5 0.5 0.5

P&L BALANCE -1.7 -10.4 -9.1

TOTAL SHAREHOLDERS FUNDS 4.7 -3.9 41.4

SECURED LOANS 37.9 71.4 79.5

UNSECURED LOANS 13.7 52.8 20

TOTAL BORROWINGS 51.6 124.2 99.5

DEFFERED TAX LIABILITY 4.3 8.3 10.1

TOTAL CAPITAL EMPLOYED 60.7 128.5 150.9

177.7 442.8



377.4

APPLICATION OF FUNDS

GROSS BLOCK 66.3 102.4 115.2

ACCUMILATED DEPRECIATION 19.4 27.6 36.7

NET BLOCK 42 84.8 83.6

CAPITAL WORK IN PROGRESS 20.6 13.3 37.7

INVESTMENT 9.4 13.9 16.4

NET CURRENT ASSETS -20.7 16.5 13.2

TOTAL CAPITAL DEPLOYED 40.7 118.9 140

177.7 377.4 442.8

PROFIT AND LOSS ACCOUNT OF WOCKHARDT HOSPITAL

PARTICULARS

(in Cr)

2006

(in Cr)

2007

(in Cr)

2008

NET SALES 49.1 82.3 129.1



EXPENDITURE 43.4 70.6 107.5

OPERATING PROFIT 5.8 11.7 21.6

OTHER INCOME 0.1 0.1 0.1

EBIDTA 5.9 11.7 21.8

INTEREST COST 4 8.3 9.4

DEPRECIATION 4.6 8.2 9.1

PBT -2.8 -4.7 3.4

TAXES 3.2 3.9 2

NET PROFIT 6 -8.9 1.3



Cost Accounting : Principle and Practice

S.P Jain and K.L Narang.

Cost Accounting :

Bhabatosh Banerjee

Fundamental of Cost Accounting :

Sikka T.R

Advanced cost Accounting:

B.M Lal Nigam and G.L.Sharma.

Methodology of Research in social sciences :

Dr.O.R Krishnaswamy



Managerial Accounting for hospital :

G.R.Kulkarni.

Websites

www.wochardthospitals.com

www.whhi.com

www.msn.com.

www.msn encarta.com.

Nisha

9986103327


http://www.msn/

http://www.msn.com/

Documents

cost analysis in wockhardt