Building the Capacity of Egypt’s Health Insurance Organization (HIO) for Effective Budgeting and Financial Forecasting
Apr 1 2010
As part of efforts to support Egypt's Health Insurance Organization (HIO) to strengthen and reorganize its health care purchasing and payment functions, Health Systems 20/20 led financial management and cost accounting workshops with HIO's financial department.
The goals of the workshops, held January 31-February 4, 2010, were to build staff skills in:
- Pricing services and forecasting future activities based on information provided by beneficiaries, providers, and actuarial staff
- Identifying the cause of variance between forecasted and actual expenses
- Segregating medical expenses by types of clinical services, providers, and contract arrangements
- Facilitating communication among the various functional areas and the financial management department
- Producing timely financial reports
The financial management workshop was attended by 39 HIO accountants and 37 mid- and senior-level HIO financial managers. During the training, Health Systems 20/20 demonstrated how to link HIO's current accounting practices to what should be applied when the HIO accounting system is eventually converted to an economic holding unit with subsidiaries. When the transition takes place, international accounting standards will be applied in addition to the requirements of the uniform accounting system. At the end of the training, small working groups discussed practical cases to make the presented material more relevant to their experiences. The groups each prepared a working paper, in which they discussed possible solutions to the problems presented in the case studies.
The cost accounting training for 39 HIO accountants focused on cost terms, concepts and classifications; variable costing; break-even analysis; short-term decision-making based on the cost–volume–profit relationship; profit planning and budgeting; the economic order quantity and reorder point for materials purchasers; and service department costing using an activity-based approach. This training also concluded with three practical cases. The first case focused on measuring the cost of medical services in hospitals and allocation of overhead costs. The second focused on how to measure the cost of a service per patient and apply it to service pricing decisions, and the third case focused on the issuance of medical bills to patients.
