Health policies and health systems across the European Union are increasingly interconnected, both because of patients getting healthcare across the EU, and because of professionals working in different countries. Given the relevance of patient mobility in the EU agenda (see for example Directive 2011/24/EU), it is of the utmost importance that governments design a reimbursement system with realistic tariffs. It is difficult, however, to correctly measure the cost related to the different therapeutic and diagnostic treatments provided by hospitals and other healthcare providers. In fact, simply transferring systems and methods from for-profit corporations to providers of healthcare services could lead to erroneous results (Alexander and, 1998), especially when decisions concerning the appropriateness of different medical treatments can be influenced by cost evaluations. Advanced cost accounting techniques, such as Activity Based Costing (ABC), are therefore more appropriate for measuring the costs of healthcare activities. Since its inception, ABC had proven to be particularly suited to cost assessment in health care institutions (Baker). As a matter of fact, its theoretical roots – based on the formal recognition of the “multiple level variability” underlying costs amounts – enable an increase in the accurateness of cost measurement in a context in which complexity plays undoubtedly a crucial role (Grisi, 1997; De Rosa, 2000). Despite its attractiveness, ABC rate of adoption remained considerably low, even in the healthcare sector. The main causes of this lack in general acceptance of ABC are commonly attributed to the difficulties and costs almost inevitably associated with its practical implementation. Furthermore, the “unwieldy and subjective” procedure that leads to the appraisal of resource usage within the conventional ABC framework is often considered problematic. In particular, over-estimates of the resources used by activities is a common effect produced by this procedure in the practical implementation of ABC systems, thus inducing under-appraisals of the levels of unused capacity. These undesirable effects may be particularly relevant in contexts – such in the healthcare sector – where the appropriate understanding of cost data may be linked to factors that normally diverge from those strictly pertaining to economic logic. In order to solve this problem, a new approach – called Time Driven Activity Costing or TDABC – has been more recently devised and tested in practice, including in healthcare environments (Kaplan and Porter, 2011). TDABC improves existing ABC framework in two ways. Firstly, simplifies the costing systems by removing the need to interview and survey personnel for allocating resource costs to activities performed. Secondly, it uses the capacity cost rate to drive departmental resource costs to cost objects; this result is obtained by assessing the demand for resource capacity that is implied in the level of activities performed. In this paper we study the methods and results of cost analysis of selected healthcare activities offered by the Anatomical and Histological Pathology Unit of the teaching hospital of Trieste, Italy (Azienda Ospedaliera Universitaria Ospedali Riuniti di Trieste). We experimentally apply time-driven ABC techniques to both histopathology and cytopathology examinations, obtaining results that can provide a useful insight for further research in the field of cost accounting in healthcare.

An analysis of advanced cost accounting techniques in healthcare activities

BERTONI, MICHELE;DE ROSA, Bruno;REBELLI, ALESSIO;ZANCONATI, FABRIZIO
2016

Abstract

Health policies and health systems across the European Union are increasingly interconnected, both because of patients getting healthcare across the EU, and because of professionals working in different countries. Given the relevance of patient mobility in the EU agenda (see for example Directive 2011/24/EU), it is of the utmost importance that governments design a reimbursement system with realistic tariffs. It is difficult, however, to correctly measure the cost related to the different therapeutic and diagnostic treatments provided by hospitals and other healthcare providers. In fact, simply transferring systems and methods from for-profit corporations to providers of healthcare services could lead to erroneous results (Alexander and, 1998), especially when decisions concerning the appropriateness of different medical treatments can be influenced by cost evaluations. Advanced cost accounting techniques, such as Activity Based Costing (ABC), are therefore more appropriate for measuring the costs of healthcare activities. Since its inception, ABC had proven to be particularly suited to cost assessment in health care institutions (Baker). As a matter of fact, its theoretical roots – based on the formal recognition of the “multiple level variability” underlying costs amounts – enable an increase in the accurateness of cost measurement in a context in which complexity plays undoubtedly a crucial role (Grisi, 1997; De Rosa, 2000). Despite its attractiveness, ABC rate of adoption remained considerably low, even in the healthcare sector. The main causes of this lack in general acceptance of ABC are commonly attributed to the difficulties and costs almost inevitably associated with its practical implementation. Furthermore, the “unwieldy and subjective” procedure that leads to the appraisal of resource usage within the conventional ABC framework is often considered problematic. In particular, over-estimates of the resources used by activities is a common effect produced by this procedure in the practical implementation of ABC systems, thus inducing under-appraisals of the levels of unused capacity. These undesirable effects may be particularly relevant in contexts – such in the healthcare sector – where the appropriate understanding of cost data may be linked to factors that normally diverge from those strictly pertaining to economic logic. In order to solve this problem, a new approach – called Time Driven Activity Costing or TDABC – has been more recently devised and tested in practice, including in healthcare environments (Kaplan and Porter, 2011). TDABC improves existing ABC framework in two ways. Firstly, simplifies the costing systems by removing the need to interview and survey personnel for allocating resource costs to activities performed. Secondly, it uses the capacity cost rate to drive departmental resource costs to cost objects; this result is obtained by assessing the demand for resource capacity that is implied in the level of activities performed. In this paper we study the methods and results of cost analysis of selected healthcare activities offered by the Anatomical and Histological Pathology Unit of the teaching hospital of Trieste, Italy (Azienda Ospedaliera Universitaria Ospedali Riuniti di Trieste). We experimentally apply time-driven ABC techniques to both histopathology and cytopathology examinations, obtaining results that can provide a useful insight for further research in the field of cost accounting in healthcare.
978-2-9544508-9-6
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11368/2890407
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