Activity-based Costing Research Articles

Does Transforaminal Endoscopic Lumbar Discectomy Provide More Value than Microdiscectomy? An Application of the Operative Value Index

BACKGROUND AND OBJECTIVES: A few studies have compared the value (outcomes per dollar spent) provided by transforaminal endoscopic discectomy (TED) vs microdiscectomy (MD) for lumbar disc herniations. Here, we attempt to address this gap using a novel Operative Value Index (OVI), which combines a procedure-specific patient-reported outcome with intraoperative cost data based on time-driven activity-based costing. METHODS: MD (n = 95) and TED (n = 23) performed by neurosurgeons at our institution from 2017 to 2022 were retrospectively identified. Time-driven activity-based costing was applied to identify both direct and indirect costs for all cases. Individual costs were obtained by direct observation, electronic medical records, and through consulting multiple departments (including business operations, sterile processing, plant operations, and pharmacy). Oswestry Disability Index (ODI) scores were prospectively collected at baseline and 3 months after surgery. Our primary outcome of interest was the OVI, defined as the percent change in the ODI per $1000 spent intraoperatively. Generalized linear mixed model regression was performed to assess whether TED was associated with significantly different OVI as compared to MD. Similar analyses were also performed for operative times and length of stay. RESULTS: The average intraoperative cost of a TED was $3698, as compared to $3410 for an MD. For both procedures, this total cost was largely driven by the cost of supplies and personnel. Multivariable regression revealed that MD was associated with significantly higher OVI (β-coefficient: 7.2, P < .05) and lower operative times (β-coefficient: - 34.6 minutes, P < .01) compared with TED, with no significant differences in length of stay (P = .17). CONCLUSION: When performed by surgeons at our institution from 2017 to 2022, MD was associated with a 7% greater improvement in ODI per $1000 spent intraoperatively. Continual assessment of value over time (both for established procedures and new techniques) will become increasingly important with the emergence of value-based care.

Abstract 4143262: Unlocking Value: Revealing the Hidden Cost of Outpatient Interstage Care

Background: Interstage programs decrease morbidity and mortality and are potentially resource intensive. The accurate cost of these programs is unknown. Understanding cost and outcomes of care is necessary to provide high-value care for this population. Time-driven activity-based costing(TDABC) provides an accurate way to understanding costs that occur at the level of the patient. Research Question: What is the outpatient cost of the interstage period to the health care system? Methods: Single-center study of outpatient interstage care. Direct observation (over 9 months) and retrospective review were utilized to develop process maps. Outpatient interstage and pediatric visits were timed by 5 observers. Cost of personnel was calculated in dollars per minute utilizing median national health system salary data. Results: Patients attended a median of 13 cardiology, 5 pediatric, 3 physical therapy(PT), 4 occupational therapy(OT), and 7 speech therapy(SLP) visits while interstage. Total cost of interstage visit personnel was $258.18[$208.59-$389.24] and equipment cost was $1457.79. Total cost of a pediatric visit was $123.55[$130.80-$167.12]. Total cost of outpatient PT, OT, and SLP was $70.58, $66.68 and $72.43, respectively. Total cost of the outpatient interstage period was $6417.38[$5808.94-$8338.96] per patient.(Table) In interstage clinic, patients spent 132[89-165] minutes with providers and 64[41-66] minutes waiting.(Figure) In pediatric clinic, patients spent 73[71-76] minutes with providers and 9[6-13] minutes waiting. Conclusion: This work demonstrates that while challenging, TDABC analysis can be applied to complex interstage care to understand costs and move to deliver high-value care for this population. While caring for a child during the interstage period is time and resource intensive, it carries a relatively low cost to the health care system with a total cost of $6417.38 per patient. Additional work is needed to understand costs of inpatient interstage care.

Assessing the long-term care (LTC) service needs of older adults based on time-driven activity-based costing (TDABC)–a cross-sectional survey in central China

BackgroundThe global population’s aging has led to an increasing demand for long-term care (LTC), especially in developing countries like China. Comprehensive assessment of LTC service demands by including the time and cost analysis is crucial to inform the planning and financing of LTC resources, yet such research is lacking in China. Our research team has developed a quantitative index system of the medical and nursing services needs of older adults (QISMNSNE) based on the framework of Time-Driven Activity-Based Costing (TDABC), providing a valuable tool for measuring LTC service needs. This study aimed to assess the LTC service needs of older adults in China and the factors associated with such needs.MethodsA cross-sectional study was conducted in Changsha City, Hunan Province, China, from June 2021 to December 2022. A stratified multistage cluster sampling method was used to recruit 1,270 older adults from five nursing homes and three communities/streets in three regions of Changsha City. The LTC service needs were assessed by calculating the service time required from caregivers, nurses, and doctors and the total service time (min/d) using the QISMNSNE. Participants’ disability, activities of daily living (ADLs), mental status and social involvement (MSSI), and sensory and communication (SC) were assessed using standard scales. Generalized linear regression models were used to analyze factors associated with LTC service needs.ResultsThe participants had an average age of 76.41 ± 8.38 years, with 43.7% being female. The median service time required from caregivers, nurses, and doctors was 53.34 min/d, 3.66 min/d, and 0.33 min/d, respectively, and the total service time was 83.31 min/d. The generalized linear regression model identified the following factors that were associated with higher total service time: aged 75–84 years, living in nursing homes, income over 5000 per month, ADLs, MSSI (9 ~ 40), SC, and having 3 ~ 4 kinds of geriatric comorbidity (P < 0.05).ConclusionsOlder adults have a high need for LTC services, especially those provided by caregivers, indicating an urgent need to expand and improve LTC systems. The LTC service time needed is associated with multilevel factors encompassing socio-demographic, functional, and psychological aspects. This study offers preliminary insights into the needs, demands, and costs of LTC services for older adults and provides essential guidance for future planning and financing of LTC resources.

What is the True Cost of Motion Preservation? A Time-Driven Activity-Based Cost Analysis of Anterior Cervical Discectomy and Fusion versus Disc Replacement

Total disc replacement (TDR) has become a viable alternative to anterior cervical discectomy and fusion (ACDF) for select patients. Although most comparative studies have assessed outcomes, cost differences remain largely uninvestigated. This information is critical as we move towards value-based reimbursement. To address this knowledge gap, we used time-driven activity-based costing (TDABC) to compare total intraoperative costs between the two procedures. Total cost was divided into direct (personnel and supply cost) and indirect costs (administrative and overhead costs). Individual costs were determined through direct observation, electronic medical records, and through querying multiple departments (including business operations, sterile processing, plant operations, and pharmacy). Timestamps for all involved personnel and material resources were documented, in conjunction with process mapping of the intraoperative period. Total intraoperative costs were estimated for all ACDFs (n=810) and TDRs (n=54) from 2017 to 2022. Regression analyses were performed to identify factors associated with total cost. A total of 810 and 54 patients underwent one- and two-level ACDFs and TDRs, respectively. The average total intraoperative cost for an ACDF was $6,776 +/- $2,808, compared to $12,026 +/- $4,235 for TDR. Supply cost accounted for the majority of total cost for both procedures ($4,173 +/- $2,225 for ACDF and $9,532 +/- $4,010 for TDR). On multivariable linear regression analysis, TDR was associated with roughly $3,885 of additional cost compared to ACDF (p<0.001), as well as $4,072 in additional supply cost (p<0.001), most of which was driven by the higher cost of implants (p<0.001). TDABC is a highly useful methodology for estimating differences in true costs between procedures and determining cost drivers. TDRs were associated with an additional $3,885 of total intraoperative cost as compared to ACDFs, the majority of which was driven by the cost of implants.

Cost estimation of preventive dental hygiene care using Time-Driven Activity-Based Costing (TDABC)

Objectives: This study used Time-Driven Activity-Based Costing (TDABC) to measure the value of preventive dental hygiene care and offering a more practical and adaptable cost management method than compared to traditional cost accounting approaches.. Methods: A descriptive survey was conducted using 164 questionnaires collected from dental hygienists actively involved in preventive dental care. The cost data related to labor, materials, and overheads, were anlyzed using detailed classifications of procedures such as scaling, fluoride application, and sealant application. Results: The total allocated cost of 10,163,355 South Korean Won (KRW) was divided by the total working time of the dental clinic (23,520 min), providing a unit cost of 432 KRW/min. Among the three preventive dental care procedures, scaling had the highest total activity cost of 5,867,243 KRW. Conclusions: This study provides valuable evidence for the implementation of an appropriate fee system for preventive dental care performed by dental hygienists. Therefore, this study contributes to the establishment of a fair and rational reimbursement structure.

Penentuan tarif sewa kamar kost melalui perhitungan harga pokok kamar menggunakan metode activity based costing (Studi kasus Eben Kost Manado)

Achieving maximum profit is closely tied to specific calculations regarding the costs incurred to produce a service product, such as the cost of a room. Activity-Based Costing (ABC) is one method used to calculate the cost of a room by evaluating expenses based on the resources consumed by various activities. The objective of this research is to determine room rental rates by calculating the cost of a room using the Activity-Based Costing method at Eben Kost Manado. The research employed a qualitative descriptive approach. Data collection techniques included interviews and documentation. The findings indicate that the room rental rates determined using the Activity-Based Costing method are lower compared to those set by Eben Kost because the ABC method allocates all activity costs to each room type precisely based on each activity's consumption.

Enhancing financial management in healthcare: The impact of Activity-Based Costing and Time-Driven Activity-Based Costing methodologies in Kordan's private sector in Jordan

This study examines the effectiveness of implementing Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) in Jordan’s private healthcare sector focusing on managing costs while maintaining quality care. A descriptive and analytical approach was adopted involving 213 individuals working in the financial affairs departments of private hospitals in Amman representing various types of institutions. The key variables of interest were the accuracy of cost measurement, expense reduction, cost allocation and various cost management approaches. The main findings indicate that implementing ABC and TDABC significantly improved cost management and cost reduction within these institutions. These systems have been effective in enhancing the accuracy of cost measurement, improving profitability, reducing unnecessary expenses, and achieving better cost allocation, thereby leading to better financial stewardship. This study underscores the critical importance of integrating these systems into healthcare financial frameworks. Moreover, it highlights the need for further training for financial managers and accountants to fully leverage these approaches and contribute to ongoing improvements in healthcare financial management. Additionally, this research presents empirical evidence from an underrepresented region where no prior studies have been conducted, thereby contributing to the existing body of knowledge and offering valuable insights for future initiatives in Jordan. The study also provides useful guidance for implementing these cost-management approaches more broadly in other regions and countries.

Do vaginal swabs alter empirical clinical management in obstetrics and gynaecology: A retrospective case-series and activity-based costing of the vaginal swab.

Vaginal swab microbiological testing is commonly performed as routine clinical management for various obstetric and gynaecological presentations. The clinical utility and cost-effectiveness of vaginal swab microscopy, culture and susceptibilities (MCS) in altering empirical management is ill-defined. To describe the clinical use of vaginal swabs in a tertiary women's hospital emergency department (ED), measure the impact of vaginal swabs on altering empirical clinical management, and to determine the economic cost of vaginal swab MCS. Retrospective case-series of vaginal swabs collected at a single, tertiary women's ED between January 2021 and July 2021. Symptomatology, clinical diagnosis, test results, and pre-swab and post-swab clinical management were determined upon medical record review. Economic costs of vaginal swab MCS were retrospectively determined via internal accounting records, permitting unit-level activity-based costing. A total of 660 vaginal swabs from 584 clinical episodes were included. Vulvovaginitis was the most common indication for swab collection (34.5%, 167 samples). Altered empirical management was observed in 9.8% of all swabs (95% CI 7.4-12.2%), with marked variability between clinical indications. Antimicrobial initiation was the most common alteration in management (8.9%, 95% CI 8.7-9.1%). The estimated cost of vaginal swab MCS was $29.71 AUD; labour, consumables and disposal costs accounted for 69.3, 29.8 and 0.9%, respectively. The impact of vaginal swab MCS on empirical clinical management is context-specific and variable. The majority of swabs performed do not impact upon empirical management. Antimicrobial initiation is appreciably more common than antimicrobial cessation with vaginal swab results.

Integrating Activity-based Costing with Continuous Enhancement: A Strategic Approach to Operational Efficiency and Cost Management

The main objective of this research is to show how integrating activity-based costing (ABC) with continuous improvement processes can enhance cost management and operational efficiency. The development of automated firms and global firms has necessitated a shift in principles and measurement accuracy. The principles and concepts have been modified based on economic theory, moving from stable continuous improvement to continuous enhancement, or Kaizen enhancement. The accuracy of the proposed costing system has improved by using modified activity-based costing. The current research has focused on multi-variation in explanatory variables, including the costing system and the degree of enhancement. The suggested costing system should include the modified version of activity-based costing and the new form of continuous enhancement system. The concept of an intelligent supply chain has led to the idea of a cooperative game between all parties in the firm/chain. Intelligent automated systems are closed-loop systems where all members are partners, aiming to maximize global benefits. Resilient considerations indicate different attempts to measure and estimate the multi-effects of externalities and other external effects. This work has closed-to-open excess quantitative models, achieving the cooperative state between different partners. Findings show that ABC helps manufacturing and service sectors identify non-value-adding activities, optimize resource allocation, and reduce costs by providing detailed insights into the true cost of operations. Its integration with continuous improvement strategies amplifies these benefits, enabling businesses to streamline processes, improve efficiency, and enhance profitability. ABC is a valuable tool for identifying non-value-adding activities and optimizing resource allocation. By providing a more accurate understanding of how resources are consumed, ABC can help organizations improve their efficiency, reduce costs, and enhance customer satisfaction.

Revolutionizing Textile Manufacturing: Sustainable and Profitable Production by Integrating Industry 4.0, Activity-Based Costing, and the Theory of Constraints

The textile industry, a cornerstone of daily life and a highly globalized sector, faces significant environmental challenges due to its high water and energy consumption and extensive chemical usage. This study proposes a comprehensive green production planning and control model integrating Industry 4.0 concepts, activity-based costing (ABC), and the theory of constraints (TOC). The model utilizes mathematical programming to optimize product mix, maximize profitability, and minimize environmental impact. It leverages real-time sensing technologies and ERP systems to facilitate waste recovery, reduce carbon emissions, and achieve energy savings. Various carbon emission cost models, including continuous and discontinuous tax functions, are explored to balance corporate profitability with environmental sustainability. The findings demonstrate the model’s potential in optimizing resource utilization, reducing the environmental footprint, and enhancing profitability.

Patient-Level Value Analysis in Total Hip Arthroplasty: Optimizing the Value of Care Delivery

Background: Value is defined as the ratio of patient outcomes to the cost of care. One method to assess value is through patient-level value analysis (PLVA). To our knowledge, this tool has not previously been implemented in the setting of total hip arthroplasty (THA). The purposes of this study were to perform PLVA for a 1-year episode of care among patients undergoing primary THA and to identify characteristics that affect value in a metropolitan health-care system. Methods: The patient-reported outcome (PRO) measure database of the institution was queried for all primary THAs from 2018 to 2019. The PRO measure that was utilized was the Hip disability and Osteoarthritis Outcome Score, Joint Replacement (HOOS-JR). Cost was evaluated with use of time-driven activity-based costing (TDABC) for a 1-year episode of care (consisting of the day of surgery, inpatient stay, discharge facility, postoperative appointments, and physical therapy). The primary outcome was the 1-year value quotient, or the ratio of the 1-year change in HOOS-JR to the cost of the episode of care (VHOOS). The value quotient was compared among all included patients and evaluated for variables that may affect the overall value of the episode of care. Results: In total, 480 patients were included in the analysis. The mean improvement in the HOOS-JR was +34.9 ± 16.1 (95% confidence interval [CI]: 33.5, 36.3). The mean cost was $13,835 ± $3,471 (95% CI: $13,524, $14,146). The largest contributor to cost was implants (39.0%), followed by post-recovery care (i.e., inpatient stay and specialized nursing facilities; 24.1%). Change in the HOOS-JR was poorly correlated with the cost of care (r = −0.06; p = 0.19). THAs performed at an ambulatory surgery center (ASC) with discharge to home demonstrated higher value (VHOOS = 0.42) than THAs performed at a hospital with discharge to a rehabilitation facility (VHOOS = 0.15; analysis of variance F-test, p &lt; 0.01). Conclusions: Our study found that PROs did not correlate with costs in the setting of primary THA. Implants were the largest cost driver. Surgical setting (an ASC versus a hospital) and discharge destination influenced value as well. PLVA is a value measurement tool that can be utilized to optimize components of the care delivery pathway. Level of Evidence: Therapeutic Level III. See Instructions for Authors for a complete description of levels of evidence.

Time-Driven, Activity-Based Cost Analysis of Pars Plana Vitrectomy in Rhegmatogenous Retinal Detachment at a Large Academic Center

Purpose: To perform a time-driven, activity-based cost analysis of retinal detachment (RD) surgery and compare it with reimbursement rates. Methods: This economic analysis at a single academic institution used time-driven, activity-based costing methodology to determine the cost of rhegmatogenous RD repair with primary pars plana vitrectomy. A process flow map was created to highlight each surgical case’s operative episodes, including clinical follow-ups. Time logs were obtained from the electronic health record for each operative phase and clinical follow-up. The overhead and anesthesia costs were collected from the institution’s cost accounting system. The direct material and personnel costs were obtained from internal financial data. Results: Seventy-six cases that met the inclusion criteria were included in the cost analysis study. The time-driven, activity-based cost of RD was $6247.17, and the reimbursement was $5442.91. Therefore, each procedure had a net negative loss of $804.26. To break even, the average operation time would need to be reduced from the determined average of 90.49 minutes to 64.90 minutes. Conclusions: This study found that Medicare underestimates the true cost of RD surgery. Changes in referral patterns may be motivated by reimbursement rates lower than the cost of the procedure, which could ultimately affect patient access to care.

Cost Drivers of Pars Plana Vitrectomy for Retinal Detachment: Time-Driven Activity-Based Costing Analysis

Introduction: To determine drivers of day-of-surgery costs for pars plana vitrectomy (PPV) in the management of retinal detachment (RD) repair, the mainstay treatment, based on surgical complexity and intraoperative factors. Methods: Economic analysis was performed using time-driven activity-based costing methodology for patients who had standard (Current Procedural Terminology [CPT] code 67108) or complex (CPT 67113) RD repair with PPV at the University of Michigan in 2021. Data were obtained via the electronic health record and previous literature. PPV expenses were determined with time-driven activity-based costing, a cost calculation that incorporates time and key resource costs, and were analyzed using univariate and multivariate regression. Results: The analysis included 412 PPVs (270 standard and 142 complex based on CPT code). The operating room time was significantly increased in complex cases ( P &lt; .01). Univariate analysis found that complex PPV, cryopexy, staining agent use, retinectomy, simultaneous scleral buckling, perfluoro-N-octane (PFO) use, silicone oil tamponade, and perfluoropropane tamponade were associated with a statistically significant difference in costs ( P &lt; .01); use of laser retinopexy was not significantly associated ( P = .7190). Multivariate analysis found that standard PPV cost an average $5132.33 and significant incremental costs were found for complex PPV (+$1185.55; P &lt; .001), cryopexy (+$465.02; P = .032), staining (+$525.16; P = .04), PFO use (+$1089.54; P &lt; .0001), retinectomy (+$2031.17; P &lt; .0001), and simultaneous scleral buckling (+$916.34; P = .006). Conclusions: The intraoperative factors that increase operating room time and ultimately the incurred cost of complex PPV cases vs standard PPV were identified and economically defined. These findings can improve practice patterns by optimizing costs for effective surgical planning in the management of RD repair.

Estimation of two-year hospital costs of hip and knee periprosthetic joint infection treatments using activity-based costing.

Our aim was to estimate the total costs of all hospitalizations for treating periprosthetic joint infection (PJI) by main management strategy within 24 months post-diagnosis using activity-based costing. Additionally, we investigated the influence of individual PJI treatment pathways on hospital costs within the first 24 months. Using admission and procedure data from a prospective observational cohort in Australia and New Zealand, Australian Refined Diagnosis Related Groups were assigned to each admitted patient episode of care for activity-based costing estimates of 273 hip PJI patients and 377 knee PJI patients. Costs were aggregated at 24 months post-diagnosis, and are presented in Australian dollars. The mean cost per hip and knee PJI patient was $64,585 (SD $53,550). Single-stage revision mean costs were $67,029 (SD $47,116) and $80,063 (SD $42,438) for hip and knee, respectively. Two-stage revision costs were $113,226 (SD $66,724) and $122,425 (SD $60,874) for hip and knee, respectively. Debridement, antibiotics, and implant retention in hips and knees mean costs were $53,537 (SD$ 39,342) and $48,463 (SD $33,179), respectively. Suppressive antibiotic therapy without surgical management mean costs were $20,296 (SD $8,875) for hip patients and $16,481 (SD $6,712) for knee patients. Hip patients had 16 different treatment pathways and knee patients had 18 treatment pathways. Additional treatment, episodes of care, and length of stay contributed to substantially increased costs up to a maximum of $369,948. Treating PJI incurs a substantial cost burden, which is substantially influenced by management strategy. With an annual PJI incidence of 3,900, the cost burden would be in excess of $250 million to the Australian healthcare system. Treatment pathways with additional surgery, more episodes of care, and a longer length of stay substantially increase the associated hospital costs. Prospectively monitoring individual patient treatment pathways beyond initial management is important when quantifying PJI treatment cost. Our study highlights the importance of optimizing initial surgical treatment, and informs treating hospitals of the resources required to provide care for PJI patients.

Costs and resource distribution of direct services for HIV in Uganda

ObjectiveIn high HIV-burden countries like Uganda, financing and resource allocation for HIV services have rapidly evolved. This study aimed to employ time-driven activity-based costing (TDABC) to examine the allocation of...

Averting bankruptcies among the software development houses in Lahore, Pakistan

Pakistan, as the 4th largest technological market globally, is home to over 2000 registered software development houses. However, the industry is not without its challenges, and hundreds of these houses close yearly owing to insolvency, and even more crop up. To understand the financial difficulties these houses face, a sample of 20 small-size and 20 medium-sized software houses has been taken from the hundreds in Arfa Software Technology Park in Lahore, Pakistan. Financial Blueprints of 2 projects per house per year for five years, i.e., 2018-2022, have been obtained. These case studies have been contrasted with those written and published in the developed world. It is found that there is a dearth of costing and pricing mechanisms in software-related projects. This results in under/over-costing the cost and pricing of the projects, which is a leading cause of financial bankruptcy for most software houses. It is proposed that activity-based costing, as the costing technique, and competitive pricing, as the pricing mechanism, may be adopted as the best practice in the software development industry. These solutions, if implemented, could significantly reduce the risk of financial bankruptcy among software houses, potentially transforming the industry's financial landscape.

Sustainable Cost Management and Green Business: The Role of Managerial Accounting Innovations

This research explores the impact of innovations in managerial accounting on sustainable cost management, focusing on the integration of green business practices. The objectives are to analyze how technological, process, strategic, and organizational innovations contribute to cost savings and sustainability performance, and to provide recommendations for practitioners and policymakers. A quantitative research design was employed, utilizing case studies from various industries. Data collection involved detailed analysis of company reports and sustainability metrics, while statistical techniques were used for data analysis. Key findings reveal that big data analytics and real-time reporting significantly enhance energy efficiency and cost savings, aligning with existing literature on the benefits of data-driven decision-making. Activity-Based Costing (ABC) and Environmental Management Accounting (EMA) improve cost allocation accuracy and environmental cost tracking, resulting in substantial cost reductions. Strategic frameworks like the Balanced Scorecard (BSC) and Life-Cycle Costing (LCC) effectively integrate sustainability goals with business objectives, promoting long-term financial and environmental benefits. Organizational practices, including cross-functional teams and strong top management commitment, are crucial for successful sustainability initiatives. The study concludes that these innovations in managerial accounting are vital for achieving sustainable cost management. Recommendations for practitioners include investing in advanced technologies, adopting strategic costing methodologies, and fostering a collaborative organizational culture. Policymakers are advised to create incentives and regulations that encourage sustainable practices. Future research should focus on the long-term impacts of these practices, industry-specific adaptations, and the socio-economic benefits of sustainable cost management. This research contributes to the growing body of knowledge on sustainable business practices and provides practical guidance for enhancing sustainability through managerial accounting innovations.

Analysis of Determining Inpatient Room Rates Using the Activity-Based Costing Method in a Healthcare Setting

Background: Hospitalization rate determination is crucial for healthcare cost management, yet traditional methods often lead to cost distortions. Specific Background: Muhammadiyah Tuban Hospital has historically utilized conventional costing methods, which have resulted in higher than necessary charges for hospital services. Knowledge Gap: There is limited research comparing traditional costing methods with more accurate and modern approaches like Activity Based Costing (ABC) in the Indonesian healthcare context. Aim: This study aims to compare hospitalization rates at Muhammadiyah Tuban Hospital using traditional methods and the ABC method, to highlight discrepancies and propose a more accurate costing framework. Results: The ABC method yielded significantly lower hospitalization rates across various classes (VIP, Class 1, Class 2, and Class 3) compared to traditional methods. For instance, the ABC rate for the VIP class was IDR 270,619, compared to IDR 495,000 set by traditional methods. Novelty: This study introduces the application of ABC in an Indonesian hospital setting, providing a clear contrast in cost-efficiency against traditional costing. Implications: The findings suggest that adopting the ABC method can lead to more precise and lower hospitalization rates, potentially reducing healthcare costs for patients and improving financial management within hospitals.Highlights: Cost Accuracy: ABC method offers more precise hospitalization rates than traditional methods. Economic Impact: Adoption of ABC can lower patient costs and improve hospital financial management. Innovation: Introduces a modern costing method to Indonesian healthcare, suggesting a shift from outdated practices. Keywords: Activity Based Costing, Hospitalization Rates, Cost Management, Healthcare Economics

Assessing cost and cost savings of teleconsultation in long-term care facilities: a time-driven activity-based costing analysis within a value-based healthcare framework

BackgroundQuebec’s healthcare system faces significant challenges due to labour shortage, particularly in long-term care facilities (CHSLDs). The aging population and increasing demand for services compound this issue. Teleconsultation presents a promising solution to mitigate labour shortage, especially in small CHSLDs outside urban centers. This study aims to evaluate the cost and cost savings associated with teleconsultation in CHSLDs, utilizing the Time-Driven Activity-Based Costing (TDABC) model within the framework of Value-Based Healthcare (VBHC).MethodsThis study focuses on CHSLDs with fewer than 50 beds in remote regions of Quebec, where teleconsultation for nighttime nursing care was implemented. Time and cost data were collected from three CHSLDs over varying periods. The TDABC model, aligned with VBHC principles, was applied through five steps, including process mapping, estimating activity times, calculating resource costs, and determining total costs.ResultsTeleconsultation increased the cost per minute for nursing care compared to traditional care, attributed to additional tasks during remote consultations and potential technical challenges. However, cost savings were realized due to reduced need for onsite nursing staff during non-eventful nights. Overall, substantial savings were observed over the project duration, aligning with VBHC’s focus on delivering high-value healthcare.ConclusionsThis study contributes both theoretically and practically by demonstrating the application of TDABC within the VBHC framework in CHSLDs. The findings support the cost savings from the use of teleconsultation in small CHSLDs. Further research should explore the long-term sustainability and scalability of teleconsultation across different CHSLD sizes and settings within the VBHC context to ensure high-value healthcare delivery.

Inventory Classification with AHP and ABC Analyses: A Case Study for Dental Products Production

This study explores the applicability of the Hierarchical Decision-Making Method (AHP) and Activity-Based Costing (ABC) analyses in the inventory management of dental products. The ABC analysis categorizes products into A, B, and C categories based on financial values. Category A products represent 80% of the total inventory value, while categories B and C represent 15% and 5%, respectively. These products are grouped according to their importance for stock tracking and control. The AHP analysis, on the other hand, ranks products based on criteria such as demand, price, delivery time, depreciation, and importance. The results from AHP showed that some products matched the ABC categories while others fell into different categories. These findings highlight that the combined use of AHP and ABC analyses allows for a more comprehensive and strategic approach to inventory management.