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Benchmarking in pathology: development of an activity-based costing model
Leslie Burnett1, Roger Wilson, Sally Pfeffer
1PaLMS, Pathology North, Royal North Shore Hospital, St Leonards †Sydney Medical School, University of Sydney, Royal North Shore Hospital, St Leonards, NSW, Australia. leslie.burnett@sydney.edu.au
Benchmarking in Pathology (BiP) enhances laboratory cost analysis by using an activity-based costing model with
Area of Science:
- Health Services Research
- Laboratory Management
- Cost Accounting
Background:
- The Benchmarking in Pathology (BiP) program facilitates laboratory cost determination and performance comparison.
- Previous iterations relied on 'total costs' for expense allocation.
Purpose of the Study:
- To describe the 14-year evolution of the BiP program.
- To detail the implementation of 'avoidable costs' as the primary accounting basis.
- To enhance pathology laboratory benchmarking capabilities.
Main Methods:
- Implemented a hierarchical tree-structured activity-based costing model.
- Utilized 'avoidable costs' for allocating expenses within pathology operations.
- Integrated methods for variable costs, indirect cost imputation, test panels, and blood bank records.
Main Results:
- The model supports cost allocation across multiple sites and organizational structures.
- Enabled benchmarking at various levels: test profiles, workload activities, cost per test, and complexity units.
- Generated comprehensive laboratory management reports.
Conclusions:
- A national BiP program has been successfully developed.
- Activity-based costing with 'avoidable costs' addresses limitations of 'total cost' approaches.
- Benchmarking complexity adjustment refines comparisons by accounting for test-mix and diagnostic complexity.
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