Time-Driven Activity-Based Costing and Its Use in Health Economic Analysis: A Systematic Literature Review

With rising global healthcare expenditures, there is an increasing demand for value-based healthcare (VBHC). Time-driven activity-based costing (TDABC) has been proposed as a key component of VBHC for addressing cost-related challenges. This study aimed to review the application of TDABC in health economic analyses across the continuum of care, explore its methodological advantages, and assess adherence to the 7-step or 8-step methodological reporting frameworks.

This systematic review was conducted by screening the MEDLINE, Embase, and Scopus databases following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, including all studies published until April 2025. Studies that used TDABC for diagnosis and treatment of health conditions were included, while costing studies involving any surgeries were excluded. The NVivo qualitative data analysis software was used to analyse data through content analyses.

A total of 32 studies met inclusion criteria, including 25 partial economic evaluations (costing) and seven full economic evaluations (EEs). Time-driven activity-based costing was predominantly applied in cancer treatment and management, followed by diabetes care. This methodology proved applicable across all stages of healthcare, helping to accurately identify the cost of care and resource waste, enhancing value in healthcare, and overcoming the current cost accounting challenges. Studies that used hybrid data collection approaches combining direct observation with staff input were more likely to report detailed and actionable cost assessments. Studies using 8-step framework demonstrated improved methodological adherence and reduced reporting variability.

Time-driven activity-based costing supports more accurate, transparent, and resource-sensitive health economic analysis enabling informed decision making and system-level efficiency. Its application across diverse care stages and conditions demonstrates its adaptability and relevance for modern health-economic evaluation. Policy makers and healthcare providers should consider adopting TDABC to strengthen costing practices and advance the transition toward value-based healthcare.

ID CRD42023447085.