An activity-based costing approach for detecting inefficiencies of healthcare processes

Abstract

Purpose – The purpose of this paper is to set out a methodological framework to investigate how the integration of an activity-based costing (ABC) logic into the pre-existent accounting system supports healthcare organizations in identifying the inefficiencies related to their diagnostic therapeutic pathways (DTP) and related reengineering interventions. Design/methodology/approach – The BPM-ABC methodological framework has been applied to the case of a specific surgery pathway, at the Orthopaedic Division of a University Hospital in Italy. Findings – The case-study described in the paper points out: first, how the Business Process Management (BPM)-ABC methodology is able to produce significant information about consumed resources and the costs of the activities, useful to highlight opportunities for DTPs improvement; second, the barriers related to a pre-existing accounting system based on cost centres that can hinder the implementation of the BPM-ABC model. Practical implications – The case study points out the role of the ABC as a management tool for supporting decision-making processes. The ABC allows inferring information for two purposes. First, ABC supports a cost containment process as it allows highlighting the most cost-consuming activities and resources. Second, the ABC allows identifying reengineering paths, distinguishing between incremental and radical ones. Originality/value – This study represents a remarkable reference raising the awareness of the pivotal role accounting systems play in the management of the organizational processes.

Evaluating the Use of the Activity Based Costing Method in the Construction Industry in the V4 Countries

“…It consists of three basic elements: Process Management, Cost Analysis using ABC, Balanced Scorecard. [9], [10], [11] argue that process management can affect the level of costs, profits, value added, and other attributes of the business's value-creation processes. The ABC method is the main tool.…”

Breast cancer treatment pathway improvement using time‐driven activity‐based costing

“…Several studies have described the implementation of ABC in the health care sector, in clinics and hospitals . Other studies have shown that it is possible to use ABC to measure inefficiencies in care trajectories and, by applying business process reengineering, to identify inefficiencies in care trajectories in a hospital, integrating the logic of this method within an existing accounting system …”

“…It is also important to have complete staff buy‐in, and employees may be reluctant to implement the system . Moreover, it can be difficult to obtain information on activities from a system that focuses on cost centers . Finally, even if an organization succeeds in implementing an initial model, it must be constantly updated by questioning the stakeholders in the organization to make sure the model reflects any changes…”

O fluxo de usuários no SUS coordenado pela regulação assistencial: um estudo dos processos para acesso a organizações de saúde de média complexidade

“…Promover BPM habilita a organização a conhecer seus processos, o que pode auxiliar os gestores a redesenhar os fluxos de trabalho para torná-los mais eficientes e eficazes e para reduzir custos desnecessários (CANNAVACCIUOLO et al, 2015). BPM pode ainda, auxiliar na execução de um programa estratégico por permitir melhor adequação entre a estratégia organizacional e os processos de negócios da organização (TRKMAN, 2010).…”