National Medical Care Company

National Medical Care Company

Introduction

National Medical Care Company, popularly known as “Care” was set up in 2003.

It is a Joint-Stock Company having its registered office in Riyadh, Kingdom of Saudi Arabia.

It has various branches, including Riyadh Care Hospital, National Care Hospital, Care company for Pharmaceutical and Medical Distribution, and Family Medicine Care Center, all set up under different conditions.

The main activities of this business are the establishment, owning, equipping, managing, maintaining, and operating hospitals, health centers, and units.

Financial statements of the company are prepared as per the IFRS that are accepted in the Kingdom of Saudi Arabia.

Literature Review

Hospitals are basically indulged in activities like providing services related to health care, which are focused on preserving, restore, save, or improve the patients’ health.

There is an introduction of new accounting and research concept which can be done through an integrated reporting system.

To maintain viability, form all perspectives, it also looks up financial, social sustainability, and environmental aspects.

An integrated reporting system is based on a holistic view at the managerial level rather than the operation level.

TQM management is used to understand the value of the quality and its financial and non-financial impact.

Just In Time system is also a management accounting technique formerly known as the JIT system.

Digital innovation in accounting and management concept is benefited from various perspectives.

The information on cost incurred to manage the hospital is not sufficiently provided through financial accounting.

The principal tool used to generate information related to the cost of various services provided by the hospitals is cost accounting.

Cost accounting is not a separate theory instead, it’s a part of a modern accounting information system, a medium through which information related to cost is collected. Such system is prepared as per the particular information requirements of the users of such information.

Apart from the purpose of providing information relating to unit cost, there are other advantages provided by system of cost accounting.

There are so many innovative techniques developed for management accounting where the famous ones are activity based costing, accounting for strategic management and balanced scorecard.

The new accounting techniques have been designed to new management processes and support new technologies and the challenge of global competition to such a time production system, the search for a ruthless advantage.

There are a large number of hospitals in Saudi Arabia, and also it receives the highest health care services in the Middle East.

As per the estimates of the Saudi Arabia General Investment Authority, the health care services are likely to be demanded at a higher rate by 2020 for various reasons. System of costing is mainly concerned with the manufacturing industry; however, the system of costing prevalent in the medical industry of Saudi Arabia is a crucial area for investigation area as this field has not received much attention.

Implementation of ABC technique

The three main activities in a hospital are: check in of patients, tests or examination through radiology department and generation of reports and provision consultation to the patients.

Conclusion

Modern techniques of accounting such as Activity Based Costing and others have become very crucial for the success and help the organizations to remain ahead in competition.

As ABC is related to cost management accounting, it helps the medical industry in reducing and controlling the costs for carrying out the correct pricing and enhancing the overall hospitals profitability.