Health Economics Resource Center (HERC)

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Managerial Cost Accounting (MCA)

CDW Disclaimer

VA data, including HERC data, are currently in transition to the VA Corporate Data Warehouse (CDW), a national VA data repository. The National Data Systems (NDS) oversees the request and approval process through the Data Access Request Tracker (DART) system. For more information on data available at CDW and the current request procedures, please see the VHA Data Portal (VA intranet site - contact HERC for the url).

The Managerial Cost Accounting System (MCA, formerly Decision Support System (DSS)) is an activity based cost allocation system that generates estimates of the cost of individual VA hospital stays and health care encounters. MCA data are available to VA investigators who obtain permission and follow Federal privacy regulations.

MCA consists of a set of programs that uses relational databases to provide cost and other information needed by managers and clinicians. MCA has been implemented throughout the U.S. Department of Veterans Affairs (VA) healthcare systems.

MCA extracts costs from the VA payroll and general ledger. These are assigned to departments based on activity reports from physicians and managers (at some sites, all staff provide activity reports). Six categories of expense are assigned in this step. Overhead (the cost of departments that do not produce patient care) is distributed to patient care departments using a step-down method.

Costs of intermediate products are then determined. Examples of intermediate products are: chest x-rays, units of blood, 15-minute clinic visits, or days of stay in the intensive care unit. They are called intermediate products to distinguish them from the final product--a patient encounter, which is a bundle of intermediate products. Relative Value Units (RVUs) are assigned to each product based on an estimate of the relative costs of the resources needed to produce it. Facilities are encouraged to modify RVUs to reflect local factors.

MCA relies on pre-existing VA databases for information on what care was provided and which patients utilized it. These data are combined with unit cost estimates to estimate the cost of hospital stays and outpatient visits.

VA researchers can obtain more detailed information on MCA on our Intranet site.