Allocation of Medical Equipment Costs to Medical Procedures

Abstract

Despite the little amount of information about the contribution of hardware and software to the cost of providing health care, much of the raise in the sector’s expenditures in the last decades has been pointed out as result of the increasing use of medical equipment. This study presents a method to analyze the way medical equipment consumes resources during medical procedures and to estimate the costs of these resources. Focusing on the medical procedure, the method combines Time-Driven Activity-Based Costing (TDABC) and Total Cost of Ownership (TCO) to evaluate the role of medical equipment in the process of delivering health care. The method is composed of two phases: (1) mapping of the resource consumption structure, from medical procedure activities to resources and (2) identification and allocation of costs, from resources to activities. The method does not consider human resources’ costs but only the ones directly related to the equipment (such as accessories, disposables and maintenance). The results showed that the cost contribution of equipment in a medical procedure depends on the way it is used in each procedure and on the hospital’s specific practices.