Activity based costing of diagnostic procedures at a nuclear medicine center of a tertiary care hospital

Abstract

Context:Escalating health care expenses pose a new challenge to the health care environment of becoming more cost-effective. There is an urgent need for more accurate data on the costs of health care procedures. Demographic changes, changing morbidity profile, and the rising impact of noncommunicable diseases are emphasizing the role of nuclear medicine (NM) in the future health care environment. However, the impact of emerging disease load and stagnant resource availability needs to be balanced by a strategic drive towards optimal utilization of available healthcare resources.Aim:The aim was to ascertain the cost of diagnostic procedures conducted at the NM Department of a tertiary health care facility by employing activity based costing (ABC) method.Materials and Methods:A descriptive cross-sectional study was carried out over a period of 1 year. ABC methodology was utilized for ascertaining unit cost of different diagnostic procedures and such costs were compared with prevalent market rates for estimating cost effectiveness of the department being studied.Results:The cost per unit procedure for various procedures varied from Rs. 869 (USD 14.48) for a thyroid scan to Rs. 11230 (USD 187.16) for a meta-iodo-benzyl-guanidine (MIBG) scan, the most cost-effective investigations being the stress thallium, technetium-99 m myocardial perfusion imaging (MPI) and MIBG scan. The costs obtained from this study were observed to be competitive when compared to prevalent market rates.Conclusion:ABC methodology provides precise costing inputs and should be used for all future costing studies in NM Departments.

The Cost of Radiology Procedures Using Activity Based Costing (ABC) for Development of Cost Weights in Implementation of Casemix System in Malaysia

“…Indeed, by using ABC cost that is precise and accurate from activity that is specific or service and to date in Malaysia, ABC system never implemented fully (Laurila et al 2000). Hada et al (2014), mentioned that the ABC method could generate more accurate data on costing especially on Nuclear Radiology procedures and hence it should be employed by all relevant departments. Aldogan et al (2014), mentioned that via the ABC method, the hospital management would be able to generate the indirect cost involved and this can then improve the analysis of profit or income, indirectly enabling them to make decisions on costs.…”

Applying Time Driven Activity-Based Costing to Calculate Cost of Computed Tomography Scan in a Teaching Hospital

“…It can be applied to various services in the hospital and hence proven to be a reliable method to estimate real costs. [15,16] …”

“…Based on the previous studies, we applied TDABC method to calculate CT scan costs. [16][17][18][19][20] …”

“…964.64/hour and Rs. 16.07/minute. The cost of machine hours includes rental charges, machine expenses (depreciation, repairs and annual maintenance) and power consumed during working hours.…”

Process evaluation of health system costing – Experience from CHSI study in India

“…[3,4] Addressing the information gap, studies are now being undertaken more frequently to estimate health system costs in Indian settings. Of the existing cost studies, some are procedure/ surgery specific [5][6][7][8][9][10][11], disease/treatments specific [12][13][14][15][16][17][18][19][20] and some estimate public healthcare facility costs [21][22][23][24][25][26][27]. The existing costing studies largely focus on a single health facility or condition; do not cover all health care services and do not cover all types of health care providers, most importantly the private sector.…”