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    This study introduces a simplified activity-based costing model for hospital emergency departments (EDs) to identify cost inefficiencies. It aids in evaluating process improvements for better patient care and resource allocation.

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    Area of Science:

    • Healthcare Management
    • Operations Research

    Background:

    • Hospital emergency departments (EDs) face challenges in accurately assessing costs for process improvement initiatives.
    • Existing cost models can be overly complex, hindering the application of Lean Six Sigma methodologies.

    Purpose of the Study:

    • To present a simplified, activity-based costing approach for EDs.
    • To facilitate Lean Six Sigma cost-benefit analyses by reducing model complexity.
    • To identify and quantify cost inefficiencies in ED processes.

    Main Methods:

    • Developed a simplified activity-based costing model by excluding diagnostic and condition-specific costs.
    • Focused on underlying process activities to reveal cost inefficiencies.
    • Applied the model to evaluate cost savings from reducing discharge delays and the impact of patient boarding.

    Main Results:

    • The simplified model effectively identifies cost inefficiencies in ED operations.
    • Demonstrated the model's utility in quantifying savings from reducing discharge delays.
    • Quantified the financial impact of patient boarding within the ED.

    Conclusions:

    • The proposed cost model is a valuable tool for selecting, prioritizing, and validating Lean process improvement projects in EDs.
    • This approach can be extended to other patient care areas with complex, multi-diagnosis scenarios.
    • Simplified costing enhances the practical application of Lean Six Sigma in healthcare settings.