PROFITABLE CAPITATION REQUIRES ACCURATE COSTING

In the name of costing accuracy, nurses are asked to track inventory u se on per treatment basis when more significant costs, such as general overhead and nursing salaries, are usually allocated to patients or t reatments on an average cost basis, Accurate treatment costing and fin ancial viability require analysis of all resources actually consumed i n treatment delivery, including nursing services and inventory, More p recise costing information enables more profitable decisions as is dem onstrated by comparing the ratio-of-cost-to-treatment method (aggregat e costing) with alternative activity-based costing methods (ABC), Nurs es must participate in this costing process to assure that capitation bids are based upon accurate costs rather than simple averages.