Accounting for Medical Services: Public and Private Hospitals and General Clinics

Vũ Khôi

Author at Wotech Electronics Blog

Effective accounting is the "key" to improving financial management at healthcare facilities under conditions of financial autonomy. In the context of deep and broad economic integration, public hospitals in particular — and Vietnam's entire healthcare system in general — are facing enormous challenges. Having to compete with other economic sectors, especially foreign investors, in delivering medical services is an inevitability already underway. Faced with this reality, applying a new accounting–financial management mechanism and continuously improving the organization of medical service accounting is an important factor in ensuring the operational effectiveness of these units.

Improving accounting work in healthcare facilities ensures that accounting information is fully, accurately, and promptly updated, helping unit leadership and managers make appropriate and timely decisions.

Medical Service Accounting: What You Need to Know

Medical service accounting is responsible for calculating income and expenses within the healthcare facility, processing transactions, and checking, tracking, and managing the unit's assets. In particular, those doing accounting work must closely monitor the import and consumption of medical equipment, instruments, and medicines. Added to that is compiling statistics on medical waste costs by month, quarter, and year.

In addition, medical service accountants are also tasked with mastering the hospital fee schedule in the healthcare sector, service costs, examination and treatment prices, and calculating hospital fees reimbursed by social insurance and cash payments each month. At the same time, they compile inventories of medicines and medical equipment, and prepare budget reports and settlements as required by state agencies.

Basically, accountants must have a firm grasp of professional knowledge as well as legal regulations in order to complete the tasks above well.

Doing medical service accounting well also requires the following skills:

• Filing and deducting VAT by month, quarter, and year.

• Reconciling debts and processing customer and supplier receivable/payable records.

• Ensuring the balance between cost of goods sold and revenue from examination, treatment, and pharmacy services, etc.

• Preparing personal income and corporate income tax settlement files.

• Compiling data and preparing financial statements.

Doing medical service accounting well requires not only knowledge but also care, meticulousness, and experience to handle emerging issues flexibly. It also helps the unit optimize costs and increase revenue more effectively.

Hospital Accounting

At hospitals, the accounting function is usually divided into 2 types: administrative/public-service accounting and corporate accounting.

This classification is based on where they work. Public-service accountants work in state-run public hospitals. Corporate accountants work in private hospitals and clinics that are not under state management.

The distinction exists because of the particular nature of each hospital in terms of investment capital. Public hospitals are managed by the state, so accounting staff must go through civil service examination periods before being appointed to work. Private hospitals and clinics, funded by business investment, have no connection to the state.

Because of this distinction, medical service accounting at public hospitals and private hospitals also differs in many ways. At the same time, this accounting work also differs from that of agencies and businesses in other fields.

Differences in Medical Service Accounting at Public and Private Hospitals

Public Hospitals

• Handle all records related to revenue-generating administrative/public-service accounting.

• Prepare reports and regulations according to the latest circulars applicable to hospital accounting.

• Prepare the salary payment tables specific to hospital accounting.

• Prepare budget withdrawal slips.

• Prepare schedules of payment and advance payment documents.

• Build budget estimates and settle funds for each expense arising in the period.

• Prepare payment document files and settle expenses arising in the period.

• Track, manage, and account for the hospital's pharmacy warehouse; affiliated clinics and subordinate units.

Private Hospitals

• File and deduct value-added tax by month and quarter.

• Deduct and reconcile value-added tax.

• Aggregate costs and prepare costing periods for examination and treatment services.

• Balance revenue and cost of goods sold for examination and treatment services.

• Balance revenue and cost of goods sold for pharmacy services and other services.

• Reconcile receivables and payables and manage debt records.

• Prepare corporate income tax settlement files.

• Prepare financial statements.

• Prepare personal income tax settlement files.

Accounting at General Clinics

General clinics are among the units with more complex medical service accounting operations than other facility types. Below are some insights from working as a general accountant at a general clinic.

Types of General Clinics

Type 1: Examination and treatment services covered by insurance

Including services such as:

• Blood tests

• Ultrasound

• X-ray

• Endoscopy

Type 2: Examination and treatment services not covered by insurance

Similar to insured services, accountants will classify uninsured services when calculating costs. Besides the services above, this also includes:

• ENT examination and treatment

• Surgery

• Other services

How to Do Medical Service Accounting at a General Clinic

– Apply according to Circular 133

• When dispensing medicines for related services:

• Debit Account 154

• Credit Account 152

• When issuing instrument costs for allocated service packages:

• Debit Account 154

• Credit Account 153

• When allocating costs to service packages:

• Debit Account 154

• Credit Account 242

• When depreciating fixed assets for service packages:

• Debit Account 154

• Credit Account 214

• Other expenses:

• Debit Account 154

• Credit Account 111

Challenges in Medical Service Accounting

It can be seen that today's accounting organization at healthcare facilities has largely met the requirement of providing truthful financial information and has had a positive impact on these units' financial management.

However, alongside those positive changes, medical service accounting still faces many enormous challenges:

Data Control

Today, accounting is one of the fields applying information technology to work processes the fastest and most extensively.

However, this very change creates a major challenge in data control, requiring staff to have basic information technology knowledge and skills. If employees are not familiar with the information processing procedures on the software system, losing control of data is a real risk.

Complying With Accounting Standards and New Legal Regulations

Amid rapid market development, accounting standards and regulations have changed considerably. Therefore, accountants need to pay special attention and regularly stay up to date with the latest notices to avoid penalties, justifications, and related troubles.

Cutting Costs, Increasing Productivity

Due to the difficult economy and the outbreak of the Covid-19 pandemic, not only businesses but also public hospitals and private clinics want to optimize costs by cutting budgets and streamlining staff. This change has had a certain impact on accounting departments at these units.

Whereas in the past each accountant handled only one specific function, they may now have to take on several different functions due to staff streamlining.

Using professional accounting software is considered the optimal and most effective solution to solve all of the above problems. Accounting software can automate many formerly manual operations such as data entry and report preparation. Costing and inventory management are also automated, saving time and effort and minimizing errors as much as possible.

Conclusion

Those are the basic information and knowledge about medical service accounting.

With 9 suitable modules and the ability to fully handle financial and accounting operations under Circular 133/2016/TT-BTC and Circular 200/2014/TT-BTC, let SimERP become your companion on the road to conquering success!

Related Articles