To determine patient cost, healthcare financial managers use
different methods to allocate indirect and direct costs. Cost allocation
is to make sure patients are only paying for services they received.
Indirect costs are things like housekeeping and heat - these costs
are incorporated into direct costs like radiology and lab fees.
Utilization in healthcare is “the quantification or description of the use
of services by persons for the purpose of preventing and curing
health problems, and promoting maintenance of health and well
being” (Carrasquillo, 2013) The utilization rate is directly related to
service volumes which in turn relate to revenue and volume
generation including in-patient stays, ambulatory surgery and service
visits, and ER visits. As utilization rates increase, revenue and
volume increase too (AHRQ, 2022).
Reference
Healthcare cost and utilization project (HCUP) Agency for
Healthcare
Research and Quality accessed 5/19/22
www.ahrq.gov
Carrasquillo, O. (2013) Health care utilization. In: Gellman M.D.,
Turner
J.R. (eds) Encyclopedia of Behavioral Medicine. Springer, New
York, NY
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