The birth of clinical accounting: A study of the emergence and transformations of discourses on costs and practices of accounting in U.S. hospitals

Accounting in U.S. hospitals has undergone a number of transformations, particularly at the turn of this century when an accounting based upon principles of cost reimbursement emerged, and then during the late 1960s and 1970s when accounting systems such as the Medicare diagnosis related group (DRG) prospective payment system informed by principles of cost control began to emerge. The purpose of the following analysis is to explore these transformations and the forms of accounting thought and practice which emerged. It is suggested that such an exploration requires the transformations to be placed in their social and historical contexts. This is necessary in order to reveal how changes in accounting thought and practice over the past 100 years are intertwined with changes in medical knowledge and practice, the establishment of hospitals as the primary site for medical treatment, the emergence of private insurance, changing forms of government regulation and changing social and political attitudes towards the cost and provision of health care.