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HSM 340 Cost Categories Discussions 1 Week 3
Discuss the role of direct and indirect cost in the overall costing process.  How does each type affect the decisions made in expense control and analysis.  Healthcare entities classify their cost as direct and indirect.  What is the meaning and significance of these cost categories.  How do they influence the costing and also the decisions made based on these classification.  Focus on our TCO, lesson and text to try to understand these concepts and come-up with your answer. Indirect costs are administrative costs and they can also be the cost of services provided to the entity at large.  Take IT services, they cannot be directly linked to a patient, but we know that no patient care can be completed without IT support.  What other major areas do you feel can be classified as overhead? What about fixed and variable costs?