Most U.S. hospitals do not derive their revenues directly from patients. Instead, revenues come through third parties, such as insurance companies and government agencies. Until the 1980s, these payments generally reimbursed the hospital’s costs of serving patients. Such payments, however, are now generally flat fees for specified services. For example, the hospital might receive $7,000 for an appendectomy or $28,000 for heart surgery—no more, no less.
How might the method of payment change the demand for accounting information in hospitals?
Relate your answer to the decisions of top management.