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Related Experiment Videos

Activity-based resource allocation: a system for predicting nursing costs

M J Crockett1, M DiBlasi, P Flaherty

  • 1Braintree Hospital Rehabilitation Network, MA 02184, USA.

Rehabilitation Nursing : the Official Journal of the Association of Rehabilitation Nurses
|January 7, 1998
PubMed
Summary

Hospitals can now accurately determine nursing costs per patient using an activity-based management system. This approach improves contract negotiations and cost accounting in the evolving healthcare reimbursement landscape.

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Area of Science:

  • Healthcare Management
  • Nursing Economics
  • Cost Accounting

Background:

  • Hospitals face evolving reimbursement models, shifting from revenue generation to cost management.
  • Traditional nursing cost allocation, bundled into room rates, hinders accurate contract negotiation.
  • Accurate patient-specific nursing cost data is crucial for financial viability in managed care.

Purpose of the Study:

  • To implement an activity-based management system for precise nursing cost determination.
  • To differentiate nursing costs based on patient diagnosis and care intensity.
  • To enhance the accuracy of hospital cost accounting systems.

Main Methods:

  • Developed and implemented an activity-based management (ABM) system within the nursing department.

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  • Differentiated nursing costs by diagnostic group and intensity of nursing care.
  • Applied the system to patient care costing at Braintree Hospital Rehabilitation Network.

    • Main Results:

    • Enabled accurate calculation of nursing costs for individual patients.
    • Facilitated successful contract negotiations with insurers in a managed care setting.
    • Improved the overall accuracy of the network's cost accounting system.

    Conclusions:

    • Activity-based management provides a viable solution for accurately costing nursing care.
    • Accurate nursing cost data empowers hospitals in negotiating managed care contracts.
    • Implementing ABM enhances financial transparency and operational efficiency in healthcare settings.