Introduction
Healthcare enterprises have control systems designed for highly qualified professional operators which have the necessary purpose of making them aware of their financial responsibilities, but also that of supplying them with tools to assist them in their decision-making and in consciously carrying out the assignments they are responsible for. These control sessions, which are practically implemented through the reporting procedures, should hence be viewed as opportunities for understanding and drawing up appraisals and evaluations, and taking ameliorative measures whenever the comparison between reported and budgeted data display anomalies or problems. Rather than viewing these sessions as individual performance and skill appraisals, periodical assessments should be viewed as a source of clues aimed at developing problem solving skills and at encouraging learning processes by the staff members in charge, in line with an accurate interpretation of management control.

1. The Reporting System: General Issues
The reporting system represents a fundamental operating mechanism in the process aimed at making healthcare workers aware of their responsibilities in efficiently achieving the objectives of healthcare enterprises. The term reporting relates to the activity aimed at the communication to a subject responsible for the granting and employment of certain resources, of information on management performance that may prove significant for his decision-making activity. The purpose of this specific system, as part of the broader management control system, is to communicate to mangers in an unambiguous, reliable and timely manner, the elements required to: . get to know past trends and/or the current performance of management, by analysing this information also in comparison with preset parameters; . identify the reasons for the variances and any corrective measures to be taken; . take action with respect to the programming process, by redesigning the short- and medium/long-term objectives, and/or the management plans required to pursue them (1). As a rule, the communication process may be represented as a neat sequence of phases: 1) Defining the contents of the message;
2) Coding;
3) Transmission;
4) Reception;
5) Decoding;
6) Interiorisation or failure to interiorise.
In order to activate such phases, at least two subjects need to be involved: The author (controller) and the receiver. However, not seldom, the subjects involved are more than two, and this happens when the requirements exist to activate communication processes of a transversal nature, originating from one subject and directed to several receivers, through the involvement of the management control office, which represents the operating tool through which the communication process takes place. This instance makes the situation much more complicated since, in order to grant attainment of the objective (interiorisation by the final receiver of the message to be communicated), the subjects controlling the process “upstream” are to activate an articulate series of interactions through which they need to address the performance of the subjects operating “downstream”, they need to check its consistency compared to the objective and eventually correct its course in the desired direction. This information detection system is aimed at generating the data on consumptions and on activity levels which are to be handed over to the managers in charge of activating or employing resources. Since the data produced by the controller are employed for decision-making purposes, it is not sufficient for such data to be abstractly reliable; they have to become information, which means they have to be consistent with the receiver’s information requirements and have to be placed at his disposal in line with the required methods and timing. This aspect, which is significant in any company environment, is even more important in the healthcare sector, in which on one side the prevailing attitude among operators is still strongly influenced by medical and juridical deeds, whilst little importance is given to the manner whereby productive factors are combined to obtain such results, and on the other side failure to fix an actual price for the services sold to the users, the heterogeneity, the personalised nature, or in any case the difficulty met in quantifying the services rendered and the need to respect the professional autonomy of the medical component, make it difficult to set parameters that are easily interpreted, such as in the case of partial results for each “activity area” or the variances from shared standard costs. Besides, the relations between management accounting and reporting are not restricted to the fact that the data produced through the former represent an input for the latter. Indeed, there also is a relationship in the opposite direction, due to the fact that the interaction between the controller and the receiver of the information activated for reporting processes, if properly managed, can also generate profitable bidirectional information flows. In particular, if the information receiver reaches the point of viewing management control not as an auditing type procedure, but as an operating mechanism designed to improve the quality of the decision-making process, he will help to increase the controller’s understanding of the ways in which the activities he is responsible for are carried out, thus making it possible to identify possible mistakes made during previous phases, or in any case improvements in management accounting system procedures themselves. (2) The subjects activating the communication process can be: . The management control office; . A subject having responsibilities of a hierarchical type, such as Managing Director, Medical Director or Administrative Director; . A subject with coordination responsibilities, such as the decision-making activity or surgical block coordinator jointly in charge of several divisions. On the other hand, the possible receivers within the reporting system are: (3) . The bodies making up high-level management of a healthcare enterprise (Managing Director, Medical Director, Administrative Director, Auditors’ Conference or Medical Council). . The staff members in charge of a responsibility centre, both in connection with the centre itself and with any profit centres that are part of it; . The staff members in charge of functional responsibilities; . The staff members in charge of coordination responsibilities. A well developed reporting system enables the management control department to prepare documentation of a heterogeneous nature. Amongst the many cataloguing systems suggested in literature, the most significant appears to be the one based on the receiver’s information requirements that the document is designed to meet. Indeed this classification, besides being consistent with the decision-making support tool nature typical of the reporting system, also reflects a possible organisation of reports by contents, which means that documents meeting similar requirements will be comparable in contents. The different information requirements can be broken down into three classes, relating to the assessment of results attained versus set parameters, identification of emerging phenomena and of existing trends, and gathering of the data required to make certain choices. We can therefore identify three classes:
1) Control reports (assessment of results attained, identification of phenomena and trends);
2) Decision-making reports (obtaining data to aid choices):
3) Fact-finding reports (obtaining context data).
In practice, it is possible to prepare documents which attempt to satisfy information requirements of different kinds at the same time. In principle a report may relate to consumptive or pre-consumptive data, it may be distributed at regular intervals, upon the controller’s decision or upon the receiver’s requests, and it may have a preset or customised structure.(4)

1) The control report offers the opportunity to monitor both the performance the unit (or units) the receiver is responsible for and the evolution of the reference environmental context. This monitoring activity is carried out by expressing the variances occurring between a number of indicators taken as reference parameters, such as for instance the data reported at the end of the previous period or those forecasted for budget purposes for the healthcare enterprises employing this tool. The reports used to transmit the data detected by the management accounting system fall within this category, and may either be synthetic or analytical reports. A synthetic report summarises into a single document all the significant management phenomena which have characterised the operating unit or profit centre, or even a hospital or the whole healthcare enterprise, over the reference period. On the other hand, the analytic report observes a specific phenomenon in greater detail: for instance, it may offer an explanation as to an anomalous increase in costs borne for medical aids within a hospital outpatient’s clinic. Control reports are usually of a consumptive nature, since it is reckoned that it is useful to supply the receiver with information on a specific phenomenon only retrospectively.

2) The decision-making report is aimed at supplying the information required to make specific choices. Let us take into account, for instance, a report containing the information required to establish the fee level to be charged to patients in connection with a specific service, or to carry out a financial feasibility comparison between a cost-effective production and purchase from a third party of the service supplied within a protected facility, or else report the results of a cost-effect analysis relating to the performance of a specific piece of medical equipment.

3) Fact-finding reports include trend reports, conveying historical data sequences relating to the same reference item, and comparative reports, which compare several similar reference items at the same time. The data under examination become part of an information record on which the programming, operating management and control management activities are based and often prove useful as a statistical source, such as in the case in which periodical reports need to be prepared. Furthermore, they make the information available to the various team members more homogenous, they represent a useful organisation coordination tool, both in vertical and in horizontal terms; for the same reason, they help receivers to attain a cultural integration and hence also a sense of belonging to the same company.

2. Report Planning Criteria
Based on the principle whereby information does not play a neutral role but is, on the contrary, aimed at a specific and prearranged purpose, the planning and preparation of a report a closely related to the aim the document is designed for. (5) However, as a rule, it is possible to identify a number of criteria or requirements which must be complied with when planning a reporting system:
1) significance;
2) succinctness;
3) hierarchization;
4) controllability of reference variables;
5) balance between timeliness and accuracy;
6) reliability;
7) understandability;
8) comparability.

Significance. The measures included in the report must be such that they enable the receiver to carry out an efficient monitoring activity of the management variables that he deems to be crucial, that is of the elements that in his opinion make it possible to effectively reach the objectives of the operating unit or of the function he is responsible for.

Succinctness. As a rule, a report designed to convey to the reader an excessive amount of figures may discourage the receiver from reading it, or at least not adequately emphasise the variables which are actually significant. Synthetic control reports in particular are documents designed for rapid consultation, since they are aimed at stressing chief factors and not at analysing their causes.

Hierarchization. This is a corollary of the first two principles, according to which the information synthesis degree must reflect the distribution of responsibilities set by the organisation structure. In other words, the higher the hierarchic position of the receiver within the enterprise, the more aggregate is the form in which the data must be presented to him.

Controllability of reference variables. The measures contained in the report must turn the receiver’s attention towards the variables that are within his control, and in special way towards the consequences of the decisions he has made. In view of the highly interdependent nature of the healthcare systems, which are also open to external influences, it is quite obvious that in most cases, the final result of an action depends on several factors; therefore, the controllability requirement cannot be viewed in a restrictive sense, because in this case this would reduce the motivation to reach specific goals also in the event of unfavourable circumstances.

Balance between timeliness and accuracy. The reporting system borrows in fact both features from the management accounting system. Besides, in refining the latter, these do not need to be regarded as variables to be maximised at all costs; on the other hand, the objective to be pursued is the consistency between the features of the detection system and the timeliness and accuracy requirements of the information receivers. Such requirements are set during the report planning stage, taking into account that: . In order for the information to be acceptably timely, it is sufficient for it to reach the receiver sufficiently aforehand that he may make any necessary decision; . In order for the information to be sufficiently accurate it is sufficient for the reported value to allow the person concerned to assess in a reliable manner the direction and intensity of the phenomenon under way; . The determination of the desired level of timeliness and accuracy cannot disregard the comparison between the benefit resulting from having the information available with specific features and the cost involved in making it available. It is clear that, costs and other circumstances being equal, the timeliness of the report is detrimental to its accuracy.

Reliability. The convenience of subordinating accuracy to timeliness involves the weakness that the data produced must be reliable: if they are not, the receiver is unable to process judgements based thereon, and the report containing such data becomes useless. In such cases, the need to protect one’s credibility encourages the controller to omit the values whose reliability appears doubtful, or to defer the delivery of the report until its reliability has been checked.

Understandability. In view of the complexity of the information conveyed and of the still poor diffusion of this financial approach in the public healthcare sector, it is important that during the document planning phase special attention is devoted to what the receiver is able to understand and acknowledge. It is necessary to use a language that the reader can understand, including graphic features that emphasise the overall legibility of the report, clarify which units of measurement have been adopted and organise the information in a logically consequential manner.

Comparability. Consumptive data have little significance if they are not compared with an adequate reference item. In order for the report to be easily employable, this comparison cannot rely on knowledge, memories or willingness to retrieve the source providing the reference parameters; the report is to indicate in an explicit manner the variance that has taken place. In connection with this aspect, the controller may choose among the following options:
a) budget parameters,
b) historical parameters,
c) comparable actual data parameters.

a) If adequately prepared, the budget undoubtedly represents the predictable reference, since it allows a comparison between the goals to be achieved and the results that have actually been achieved, which is the foundation of the retroaction mechanism.

b) In the absence of budget data, a valid alternative is provided by historical parameters, that is the data reported for the previous period, even if an incremental logic is employed; but this is the logic on which the decision-maker usually bases his actions. A further advantage involved by employing historical parameters is the elimination of data comparability limits resulting from seasonal factors. Indeed it is sufficient to use as a reference the consumptive data relating to the same time interval within the previous financial year.

c) The space comparison is undoubtedly the most questionable. The situations taken into account for comparison purposes may be within or without the healthcare enterprise.

The latter alternative may be immediately excluded, since sizes, staff features, strategies employed, the demographic and epidemiologic context result in each responsibility centre being unique of its kind. The comparison between similar operating units belonging to different healthcare enterprises is still useful for regional or national comparison purposes, but for the person in charge of the individual unit it can at the most be useful for information. (6)

Conclusions
As it can be easily gathered, the control activity is not only an individual task, especially within a healthcare organisation that wishes to view the patient as the final receiver of an operating process aimed at satisfying his requirements as a whole. Having made this necessary statement beforehand, we need to balance the efficiency and specialisation requirements with the quality and organisation flexibility requirements which appear indispensable. Therefore management control (through the reporting system) represents the organisational variable that can strengthen or correct inconsistent attitudes, by means of the quality and attention to the final receiver’s requirements of the healthcare service production process. From this point of view, management control should be viewed as a means for transformation, contributing to the development of transversal relations according to the “internal customer” logic, aiming at an optimisation of the process as a whole. Failing this, it will become a mere surveillance activity carried out with inaccurate methods and tools.

Ubaldo Comite
Professore a contratto
Cattedre di Organizzazione aziendale
Università della Calabria

Translated by Interpres sas