Hospital competition and management accounting: an empirical analysis against the background of the Health Care Reform 2015

Abstract

The Federal Government has agreed on a health care reform in its coalition agreement. One important goal of the reform has been the improvement of the financial resources, especially of structurally loss-making hospitals. Lasting structural changes in the institutional background have not been considered. Health care markets are highly regulated, e. g. with governmentally fixed prices. Under these circumstances an adequate management accounting can be regarded essential for hospitals: Management Accounting can improve hospitals’ financial position by allowing for cost control, and by doing so preventing market exit. Gained surpluses can be used for quality investments, leading to an increase in quality of care. The paper presented analysis the potential link between hospitals’ market position and the use of management accounting instruments and, doing so, draws conclusions on the competition effects of the reform. In conclusion, hospitals’ use of management accounting tools is independent of their competitive situation. The potentials of gaining competitive advantages over competing hospitals by the use of management accounting tools have yet been unrecognised by German hospitals.