Clinical process analysis and activity-based costing at a heart center

Area of Science:

• Health Services Research
• Healthcare Management
• Cost Accounting

Background:

• Hospital management faces challenges in cost studies, productivity, efficiency, and quality of care.
• Understanding the links between resources and patient outcomes is crucial for effective hospital administration.
• There is a need for robust tools to manage administrative costs and support strategic decisions.

Purpose of the Study:

• To implement and evaluate a process analysis and activity-based costing (ABC) model at a Heart Center.
• To utilize the ABC model as a tool for administrative cost information, strategic decision-making, quality improvement, and cost reduction.
• To explore the potential of process-based costing in hospital management.

Main Methods:

• A commercial software package (QPR) with ProcessGuide and CostControl was employed.
• All processes within the Heart Center were mapped and graphically outlined.
• Processes and activities, including healthcare procedures, research, and education, were linked to costs and services.

Main Results:

• The construction of the ABC model was time-consuming but enabled new analytical possibilities.
• The system facilitated process and activity analysis, simulation, and price calculations.
• Cost analysis identified substantial variations in costs for individual coronary artery bypass grafting (CABG) patients.

Conclusions:

• A process-based costing system is applicable and valuable for hospital management.
• The implemented ABC model provides a foundation for improved cost control and quality enhancement.
• Further application of such systems can lead to more efficient resource allocation and better patient outcomes.