THE ROLE OF COST MANAGEMENT TOOLS IN REDUCING THE COSTS OF SERVICES PROVIDED IN THE POPULAR MEDICAL CLINIC DEPARTMENT

Abstract

The aim of this research is to introduce cost management equipment in the departments of consulting or popular health clinks. This is essential for spreading indirect industrial costs according to the operations of the organization in an efficient and fair manner. This has a big influence on lowering costs, improving operational performance, and providing management with plenty of information. Activity-based costing and activity-based management technologies were employed in the study to guarantee cost distribution and fairness in calculating, and to provide management with the data they needed to make wise decisions. The results of the study indicate that the cost system used in medical clinics is the traditional method for calculating costs of service. Nevertheless, this approach inadequately represents the true expenses associated with the services provided by medical clinics. The allocation of costs mechanism employed fails to take into account the characteristics of the activity or determine an appropriate billing rate, leading to an inequitable distribution of expenses. Using activity-based costing (ABC) and activity-based management (ABM) tools to assign indirect costs to value-adding activities has been found to promote fairness in distribution and positively impact operational performance, cost reduction, and management information.