Activity Based Costing Method Pdf Download
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The number of times an article is cited in Google Scholar was considered, for in ISI Web of Knowledge and Scopus only the journals or databases within it counted and not all the bases where this article is. For example, the article Improving hospital cost accounting with activity-based costing on 13/03/2012, shows that its citation number is 59, in Scopus. Now, when we use the same article and check it on Google Scholar, the number of citations shown is 119, this means that all bases where this article appears are counted. The time used for the search was 1990 to 2011.
The keywords index found in the portfolio was also analyzed. The highlight is the keyword activity-based costing the search root word, followed by health services, economics, hotels. This may imply that the ABC method is used in service organizations with the intention of reducing costs and improving productivity. For articles on health, there is a reservation: they focus their application of the ABC method in restricted areas or department of a health organization.
The following analysis refers to the authors featured in the portfolio and its references (Figure 8). The most cited author in the literature is Chan, Yee-Ching Lilian with article Improving hospital cost accounting with activity-based costing, published in Health Care Management Review in 1993. This article was checked in Google Scholar and had 119 citations on 13/03/2012, and this number tends to increase every day that it is checked due the fact, that this or any other article is being cited in research and studies. References in the article portfolio have been cited 2 times. The second most cited paper in the literature (75 citations in Google Scholar and not once in the portfolio references) and present the articles portfolio is A new method of accurately Identifying costs of individual Patients in intensive care: the initial results of Edbrooke, D. L.; Stevens, V. G., Hibbert, C. L., published in Intensive Care Medicine in 1997.
Also in Figure 8, the most cited authors in the references were Baykasoǧlu, A. and Gunasekaran, A., with 8 and 5 citations respectively. It is important to note that the citations of these authors do not relate to those contained in the portfolio, but to other works by them. The next and final analysis relates to the most outstanding items in the portfolio and its references, as shown in Figure 9. The articles present in the portfolio and the most cited in the references are: Improving hospital cost accounting with activity-based costing (Chan, Yee-Ching Lilian); Logistic costs case study - an ABC approach (Themido, I., Arantes, A., Fernandes C., Guedes, A.P.); and Application of activity-based costing (ABC) is a Peruvian NGO healthcare provider (Waters, H., Abdallah, H.; Santillán, D.), each with two citations.
Therefore, it is important to note that a well-structured costing method according to the needs of the organization supports consistent decision-making and is an efficient management tool. An organized cost analyzes and control system, appropriate to the aims of the organization, outlines what is happening, how best to allocate resources and therefore optimize the results.
Recently, time-driven activity-based costing (TDABC) is put forward as an alternative, more accurate costing method to calculate the cost of a medical treatment because it allows the assignment of costs directly to patients. The objective of this paper is the application of a time-driven activity-based method in order to estimate the cost of childbirth at a maternal department. Moreover, this study shows how this costing method can be used to outline how childbirth costs vary according to considered patient and disease characteristics. Through the use of process mapping, TDABC allows to exactly identify which activities and corresponding resources are impacted by these characteristics, leading to a more detailed understanding of childbirth cost.
The objective of this study is therefore twofold. First, this study describes the application of a time-driven activity-based costing model to estimate the costs of childbirth over the full cycle of care at the maternity department from the viewpoint of the hospital. The second goal of this paper is to outline how the TDABC costing method can provide insights into how childbirth costs vary according to considered disease and patient characteristics. Recently, time-driven activity-based costing was suggested as an alternative, more accurate method to calculate hospital costs as it allows the assignment of costs directly to patients [9, 10]. The method is relatively easy to implement since it only requires two parameters: (1) cost per time unit of supplying resources to activities and (2) the time required by the resource to carry out one unit of activity. By the use of multiple time drivers, TDABC enables the design of cost models that capture the complexity of processes far better than traditional accounting methods. In particular, process maps allow the incorporation of variation caused by underlying determinants along the processes. Hence, it is a well-suited costing method to track the expenses involved in the intricacy of activities in organizations such as hospitals [9, 10].
A prospective cohort study was performed at a maternity department located in Belgium. Pregnant women were followed from moment of admission for childbirth to discharge after labour in March and April 2019. To estimate the cost of childbirth, a time-driven activity-based costing approach was applied using data from multiple sources. Information on the clinical pathway along with the associated activities and utilized resources was prospectively collected through structured interviews with medical staff, including nurses, midwives and physicians . Time estimates were obtained from direct observations of staff and are based on the average time spent per activity. All relevant cost data were retrieved from the financial department of the hospital. Patient characteristics were collected by means of a survey conducted by the midwives during intake of the patient (Supplementary files 1 and 2). All patients in the sample were treated by the same nursing team in one particular hospital, hence controlling for hospital and staff variance. Ethical approval from the Medical Ethical Review Committee of the hospital were acquired prior to any data collection. The research was conducted in compliance with the principles of the Declaration of Helsinki. This research adheres to the STROBE guidelines for observational studies, with the STROBE checklist reported in Supplementary file 3.
Health care organizations around the world are under increasing pressure to improve resource utilization and to become more cost effective. At the core of this problem is the lack of accurate cost information associated with specific medical interventions. Recently, time-driven activity-based costing is put forward as suitable, more precise costing method to provide detailed and dynamically cost insights in a complex environment such as hospitals [10, 18, 21]. The purpose of this study was the application of a time-driven activity-based method in order to estimate the cost of childbirth at a maternal department. Moreover, this study sought to extend prior literature by showing how the TDABC costing method can be used to outline how variation in childbirth cost is driven by specific patient and disease characteristics. Acting on the recommendations of Keel et al. , this study followed and reported the seven-step approach explicitly to deepen understanding of the costs incurred during the full cycle of care of a woman giving birth.
First, this study shows how time-driven activity-based costing starts from a documented process map, together with the inclusion of utilized resources and time estimates. Capacity cost rates were calculated for each resource and cost was estimated subsequently. We found that the vast majority of total cost of childbirth is driven by personnel costs. In particular, monitoring after birth was the activity along the pathway consuming most personnel resources and thus contributed heavily to overall cost.
Our study provides new perspectives on the estimation of cost of childbirth in a hospital, and on the determinants driving cost variability. First, while a number of studies have already identified that age, parity and education attainment can drive variability in overall cost of childbirth, our study differs from existing studies in the use of the time-driven activity-based costing approach to analyse the impact of several patient and disease characteristics on cost of childbirth [6, 17,18,19,20, 26]. In addition to providing more accurate cost estimates than traditional methods, this technique allows to exactly identify which activities and resources are most heavily impacted by these characteristics . Despite a growing popularity in other medical disciplines, we did not find any study that uses this technique to estimate and analyse cost variability in childbirth with one exception [9, 10, 18, 21,22,23]. One study implemented in their paper a time-driven activity-based approach to identify cost determinants of a CS . However, this study was performed in Rwanda, where health systems and quality of care are very different in comparison to more developed countries, and the study did not include VD in its scope. Second, our study is also relevant to many applications in other hospital treatments. By explicitly outlining the seven step-by-step approach of Kaplan and Porter, we could guide future initiatives aiming to set up similar short-series using time-driven activity based costing [9, 22].
However, there is also an important limitation to this study. The relatively small size of the sample limits the generalizability of the findings regarding cost estimations. In particular for CS, not many conclusions on the quantitative impact of patient characteristics on cost of birth can be drawn due to the limited number of observations. Nevertheless, this study shows that time-driven activity is a suitable costing method to estimate cost of childbirth and to account for cost variabilities. Future research could elaborate on this study by extending the sample frame. Such an extension could moreover allow researchers to apply statistical analyses to examine the impact of multiple characteristics on cost differences, thereby further investigating the proposed relationships. 2b1af7f3a8