Process Mapping and Activity-Based Costing of the Intravitreal Injection Procedure.

PURPOSE/AIM OF THE STUDY: To quantify the cost of performing an intravitreal injection (IVI) utilizing activity-based costing (ABC), which allocates a cost to each resource involved in a manufacturing process. MATERIALS AND METHODS: A prospective, observational cohort study was performed at an urban, multi-specialty ophthalmology practice affiliated with an academic institution. Fourteen patients scheduled for an IVI-only visit with a retina ophthalmologist were observed from clinic entry to exit to create a process map of time and resource utilization. Indirect costs were allocated with ABC and direct costs were estimated based on process map observations, internal accounting records, employee interviews, and nationally-reported metrics. The primary outcome measure was the cost of an IVI procedure in United States dollars. Secondary outcomes included operating income (cost subtracted from revenue) of an IVI and patient-centric time utilization for an IVI. RESULTS: The total cost of performing an IVI was $128.28; average direct material, direct labor, and overhead costs were $2.14, $97.88, and $28.26, respectively. Compared to the $104.40 reimbursement set by the Centers for Medicare and Medicaid Services for Current Procedural Terminology code 67028, this results in a negative operating income of -$23.88 (-22.87%). The median clinic resource-utilizing time to complete an IVI was 32:58 minutes (range [19:24-1:28:37]); the greatest bottleneck was physician-driven electronic health record documentation. CONCLUSIONS: Our study provides an objective and accurate cost estimate of the IVI procedure and illustrates how ABC may be applied in a clinical context. Our findings suggest that IVIs may currently be undervalued by payors.

The roots of budgetary and financial accounting in Brazil / Las raíces de la contabilidad presupuestaria y patrimonial en Brasil / Raízes da contabilidade orçamentária e patrimonial no Brasil

Abstract This article presents evidence of Italian influences on the Brazilian Public Sector Accounting in the early twentieth century, using the analytically structured history approach and the institutional theory. The study presents the institutional work developed by accountant Carlos de Carvalho in employing a new accounting methodology at the time. The article proposes a new perspective on the literature on the history of accounting in Brazil, suggesting that the emergence of budgetary and financial accounting was due to the innovation of local practices in a municipality of the state of São Paulo, and then expanded to the entire state, influenced by the Italian legal doctrine. Therefore, the use of dual accounting in Brazil during the early twentieth century was first disseminated in practice and transformed into legislation afterward. The Italian roots that influenced this movement are present in the current model, which is being reviewed by the current process of convergence to international IPSAS standards.

Resumen El artículo presenta evidencias de la influencia italiana sobre la contabilidad del sector público en Brasil a principios del siglo XX. El análisis aplica la metodología de la historia estructurada y el aspecto sociológico de la teoría institucional. Se narra el trabajo institucional desarrollado por el contador Carlos de Carvalho al emplear una nueva metodología contable en ese momento. Este estudio reposiciona la literatura histórica sobre contabilidad en Brasil, puesto que propone que el surgimiento de la contabilidad presupuestaria y patrimonial se debió a la innovación de las prácticas locales en un municipio influenciado por los métodos empleados en la contabilidad dual italiana de la época, difundida y estandarizada en la ley. Las raíces italianas que influyeron en este movimiento permanecen presentes en el modelo actual, que está siendo revisado por el proceso actual de convergencia hacia las normas internacionales IPSAS.

Resumo Este artigo trata da influência italiana na contabilidade do setor público no Brasil do início do século XX. A análise aplica a metodologia de história estruturada e a vertente sociológica da teoria institucional. Narra-se o trabalho institucional desenvolvido pelo contador Carlos de Carvalho ao empregar uma nova metodologia contábil. Este estudo reposiciona a literatura sobre história da contabilidade no Brasil, pois propõe que a contabilidade dual (orçamentária e patrimonial) iniciou sua evidenciação conjunta em um município (São Carlos-SP), mas só alcançou sua integração no Estado de São Paulo sob a influência doutrinária e legal italiana. Seu uso foi difundido primeiro e transformado em lei depois. As raízes italianas da inovação contábil do início do século XX no Brasil continuam presentes no modelo atual, que vem sendo revisto pelo processo de convergência às normas internacionais de contabilidade do setor público (international public sector accounting standards [IPSAS]).

Activity-Based Costing and Time-Driven Activity-Based Costing for Assessing the Costs of Cancer Prevention, Diagnosis, and Treatment: A Systematic Review of the Literature.

BACKGROUND: A review of the literature on economic analyses in cancer (prevention, diagnosis, and treatment) using activity-based costing (ABC) or time-driven activity-based costing (TDABC) for measuring costs and to examine how these approaches have been applied to assess and manage cancer costs. METHODS: This review followed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) statement. We conducted a search for studies that used ABC or TDABC to calculate the cost of cancer in prevention, diagnosis, and treatment. Only English- and Portuguese-language articles were retrieved from Medline, Lilacs, ScieLO, and Embase (January 1990 to August 2016). RESULTS: In total, 421 studies were evaluated. However, only 27 papers were included. The first publications were from the early 2000s, but most of the studies were published in 2016 (n = 10). Most of the studies were carried out in the United States (n = 6) and Belgium (n = 6). Cancer treatment was the major focus of all studies (n = 20), followed by screening programs evaluations (n = 4) and diagnosis (n = 3). Among treatment modalities, economic analysis of radiotherapy was the most common topic of study. Retrospective clinical data represented 57.6% of the studies. More than 50% of the studies presented unspecified economic analysis. The hospital perspective was the most prevalent perspective among the studies (46.1%). CONCLUSIONS: ABC and TDABC economic analyses are a promising area of studies in oncology costs.

Assessing the effect of standardized cost systems on financial performance. A difference-in-differences approach for hospitals according to their technological level.

Promoting the improvement of standardized cost systems (CS) is one of the measures available to health policy makers for the purpose of improving efficiency in hospitals over the long-term. Nevertheless, very few studies evaluate the relationship between alternative CS and the costs really incurred. We use data from 242 hospitals of the Spanish National Health Service (NHS) between 2010 and 2013 in order to explore the determinants of the cost per adjusted patient day, using a difference-in-differences approach where the treatment is the implementation of an advanced CS. We also investigate if the association between advanced CS and unit cost is different depending upon the technological level of the hospital. Results show that hospitals with more advanced CS contained their costs better. However, the latter effect of advanced CS is lower in hospitals with a greater endowment of high technology. Results suggest that health authorities should support the development of CS, particularly in high-tech hospitals, which are usually larger and more complex hospitals that tend to accumulate a greater portion of NHS hospital sector expenditure.

Uncommon combinations of ICD10-PCS or ICD-9-CM operative procedure codes account for most inpatient surgery at half of Texas hospitals.

STUDY OBJECTIVE: Recently, there has been interest in activity-based cost accounting for inpatient surgical procedures to facilitate "value based" analyses. Research 10-20years ago, performed using data from 3 large teaching hospitals, found that activity-based cost accounting was practical and useful for modeling surgeons and subspecialties, but inaccurate for individual procedures. We hypothesized that these older results would apply to hundreds of hospitals, currently evaluable using administrative databases. DESIGN: Observational study. SETTING: State of Texas hospital discharge abstract data for 1st quarter of 2016, 4th quarter of 2015, 1st quarter of 2015, and 4th quarter of 2014. PATIENTS: Discharged from an acute care hospital in Texas with at least 1 major therapeutic ("operative") procedure. MEASUREMENTS: Counts of discharges for each procedure or combination of procedures, classified by ICD-10-PCS or ICD-9-CM. MAIN RESULTS: At the average hospital, most surgical discharges were for procedures performed at most once a month at the hospital (54%, 95% confidence interval [CI] 51% to 55%). At the average hospital, approximately 90% of procedures were performed at most once a month at the hospital (93%, CI 93% to 94%). The percentages were insensitive to the quarter of the year. The percentages were 3% to 6% greater with ICD-10-PCS than for the superseded ICD 9 CM. CONCLUSIONS: There are many different procedure codes, and many different combinations of codes, relative to the number of different hospital discharges. Since most procedures at most hospitals are performed no more than once a month, activity-based cost accounting with a sample size sufficient to be useful is impractical for the vast majority of procedures, in contrast to analysis by surgeon and/or subspecialty.

Discharges with surgical procedures performed less often than once per month per hospital account for two-thirds of hospital costs of inpatient surgery.

STUDY OBJECTIVE: Most surgical discharges (54%) at the average hospital are for procedures performed no more often than once per month at that hospital. We hypothesized that such uncommon procedures would be associated with an even greater percentage of the total cost of performing all surgical procedures at that hospital. DESIGN: Observational study. SETTING: State of Texas hospital discharge abstract data: 4th quarter of 2015 and 1st quarter of 2016. PATIENTS: Inpatients discharged with a major therapeutic ("operative") procedure. MEASUREMENTS: For each of N=343 hospitals, counts of discharges, sums of lengths of stay (LOS), sums of diagnosis related group (DRG) case-mix weights, and sums of charges were obtained for each procedure or combination of procedures, classified by International Classification of Diseases version 10 Procedure Coding System (ICD-10-PCS). Each discharge was classified into 2 categories, uncommon versus not, defined as a procedure performed at most once per month versus those performed more often than once per month. MAIN RESULTS: Major procedures performed at most once per month per hospital accounted for an average among hospitals of 68% of the total inpatient costs associated with all major therapeutic procedures. On average, the percentage of total costs associated with uncommon procedures was 26% greater than expected based on their share of total discharges (P<0.00001). Average percentage differences were insensitive to the endpoint, with similar results for the percentage of patient days and percentage of DRG case-mix weights. CONCLUSIONS: Approximately 2/3rd (mean 68%) of inpatient costs among surgical patients can be attributed to procedures performed at most once per month per hospital. The finding that such uncommon procedures account for a large percentage of costs is important because methods of cost accounting by procedure are generally unsuitable for them.

Comparison of cost determination of both resource consumption accounting and time-driven activity-based costing systems in a healthcare setting.

Objective The aim of the present study was to explore the differences between resource consumption accounting (RCA) and time-driven activity-based costing (TDABC) systems in determining the costs of services of a healthcare setting. Methods A case study was conducted to calculate the unit costs of open and laparoscopic gall bladder surgeries using TDABC and RCA. Results The RCA system assigns a higher cost both to open and laparoscopic gall bladder surgeries than TDABC. The total cost of unused capacity under the TDABC system is also double that in RCA. Conclusion Unlike TDABC, RCA calculates lower costs for unused capacities but higher costs for products or services in a healthcare setting in which fixed costs make up a high proportion of total costs. What is known about the topic? TDABC is a revision of the activity-based costing (ABC) system. RCA is also a new costing system that includes both the theoretical advantages of ABC and the practical advantages of German costing. However, little is known about the differences arising from application of TDABC and RCA. What does this paper add? There is no study comparing both TDABC and RCA in a single case study based on a real-world healthcare setting. Thus, the present study fills this gap in the literature and it is unique in the sense that it is the first case study comparing TDABC and RCA for open and laparoscopic gall bladder surgeries in a healthcare setting. What are the implications for practitioners? This study provides several interesting results for managers and cost accounting researchers. Thus, it will contribute to the spread of RCA studies in healthcare settings. It will also help the implementers of TDABC to revise data concerning the cost of unused capacity. In addition, by separating costs into fixed and variable, the paper will help managers to create a blended (combined) system that can improve both short- and long-term decisions.

Improving health care costing with resource consumption accounting.

Purpose - The purpose of this paper is to explore the differences between a traditional costing system (TCS) and resource consumption accounting (RCA) based on a case study carried out in a hospital. Design/methodology/approach - A descriptive case study was first carried out to identify the current costing system of the case hospital. An exploratory case study was then conducted to reveal how implementing RCA within the case hospital assigns costs differently to gallbladder surgeries than the current costing system (i.e. a TCS). Findings - The study showed that, in contrast to a TCS, RCA considers the unused capacity, which is the difference between the work that can be performed based on current resources and the work that is actually being performed. Therefore, it assigns lower total costs to open and laparoscopic gallbladder surgeries. The study also showed that by separating costs into fixed and variable RCA allows managers to benefit from a pricing strategy based on the difference between the service's selling price and variable costs incurred in providing that service. Research limitations/implications - The limitation of this study is that, because of time constraints, the implementation was performed in the general surgery department only. However, since RCA is an advanced system that has the same application procedures for any department inside in a hospital, managers need only time gaps to implement this system to all parts of the hospital. Practical implications - This study concluded that RCA is better than a TCS for use in health care settings that have high overhead costs because it accurately assigns overhead costs to services by considering unused capacities incurred by a hospital. Consequently, this study provides insight into both measuring and managing unused capacities within the health care sector. This study also concluded that RCA helps health care administrators increase their competitive advantage by allowing them to determine the lowest service price. Originality/value - Since the literature review found no study comparing RCA with TCS in a real-life health care setting, little is known about differences arising from applying these systems in this context. Thus, the current study fills this gap in the literature by comparing RCA with TCS for both open and laparoscopic gallbladder surgeries.

Management accounting use and financial performance in public health-care organisations: evidence from the Italian National Health Service.

Reforms of the public health-care sector have emphasised the role of management accounting (MA). However, there is little systematic evidence on its use and benefits. To fill this gap, we propose a contingency-based model which addresses three related issues, that is, whether: (i) MA use is influenced by contextual variables and MA design; (ii) top-management satisfaction with MA mediates the relationship between MA design and MA use; and (iii) financial performance is influenced by MA use. A questionnaire was mailed out to all Italian public health-care organisations. Structural equation modelling was performed to validate the research hypotheses. The response rate was 49%. Our findings suggest that: (i) cost-containment strategies encourage more sophisticated MA designs; (ii) MA use is directly and indirectly influenced by contingency, organisational, and behavioural variables; (iii) a weakly significant positive relationship exists between MA use and financial performance. These findings are relevant from the viewpoint of both top managers and policymakers. The former must make sure that MA is not only technically advanced, but also properly understood and appreciated by users. The latter need to be aware that MA may improve performance in ways and along dimensions that may not fully translate into better financial results.

In search of the economic sustainability of Hadron therapy: the real cost of setting up and operating a Hadron facility.

PURPOSE: To determine the treatment cost and required reimbursement for a new hadron therapy facility, considering different technical solutions and financing methods. METHODS AND MATERIALS: The 3 technical solutions analyzed are a carbon only (COC), proton only (POC), and combined (CC) center, each operating 2 treatment rooms and assumed to function at full capacity. A business model defines the required reimbursement and analyzes the financial implications of setting up a facility over time; activity-based costing (ABC) calculates the treatment costs per type of patient for a center in a steady state of operation. Both models compare a private, full-cost approach with public sponsoring, only taking into account operational costs. RESULTS: Yearly operational costs range between €10.0M (M = million) for a publicly sponsored POC to €24.8M for a CC with private financing. Disregarding inflation, the average treatment cost calculated with ABC (COC: €29,450; POC: €46,342; CC: €46,443 for private financing; respectively €16,059, €28,296, and €23,956 for public sponsoring) is slightly lower than the required reimbursement based on the business model (between €51,200 in a privately funded POC and €18,400 in COC with public sponsoring). Reimbursement for privately financed centers is very sensitive to a delay in commissioning and to the interest rate. Higher throughput and hypofractionation have a positive impact on the treatment costs. CONCLUSIONS: Both calculation methods are valid and complementary. The financially most attractive option of a publicly sponsored COC should be balanced to the clinical necessities and the sociopolitical context.

MEASUREMENT: ACCOUNTING FOR RELIABILITY IN PERFORMANCE ESTIMATES.

When evaluating physician performance measures, physician leaders are faced with the quandary of determining whether departures from expected physician performance measurements represent a true signal or random error. This uncertainty impedes the physician leader's ability and confidence to take appropriate performance improvement actions based on physician performance measurements. Incorporating reliability adjustment into physician performance measurement is a valuable way of reducing the impact of random error in the measurements, such as those caused by small sample sizes. Consequently, the physician executive has more confidence that the results represent true performance and is positioned to make better physician performance improvement decisions. Applying reliability adjustment to physician-level performance data is relatively new. As others have noted previously, it's important to keep in mind that reliability adjustment adds significant complexity to the production, interpretation and utilization of results. Furthermore, the methods explored in this case study only scratch the surface of the range of available Bayesian methods that can be used for reliability adjustment; further study is needed to test and compare these methods in practice and to examine important extensions for handling specialty-specific concerns (e.g., average case volumes, which have been shown to be important in cardiac surgery outcomes). Moreover, it's important to note that the provider group average as a basis for shrinkage is one of several possible choices that could be employed in practice and deserves further exploration in future research. With these caveats, our results demonstrate that incorporating reliability adjustment into physician performance measurements is feasible and can notably reduce the incidence of "real" signals relative to what one would expect to see using more traditional approaches. A physician leader who is interested in catalyzing performance improvement through focused, effective physician performance improvement is well advised to consider the value of incorporating reliability adjustments into their performance measurement system.

A new costing model in hospital management: time-driven activity-based costing system.

Traditional cost systems cause cost distortions because they cannot meet the requirements of today's businesses. Therefore, a new and more effective cost system is needed. Consequently, time-driven activity-based costing system has emerged. The unit cost of supplying capacity and the time needed to perform an activity are the only 2 factors considered by the system. Furthermore, this system determines unused capacity by considering practical capacity. The purpose of this article is to emphasize the efficiency of the time-driven activity-based costing system and to display how it can be applied in a health care institution. A case study was conducted in a private hospital in Cyprus. Interviews and direct observations were used to collect the data. The case study revealed that the cost of unused capacity is allocated to both open and laparoscopic (closed) surgeries. Thus, by using the time-driven activity-based costing system, managers should eliminate the cost of unused capacity so as to obtain better results. Based on the results of the study, hospital management is better able to understand the costs of different surgeries. In addition, managers can easily notice the cost of unused capacity and decide how many employees to be dismissed or directed to other productive areas.

The cost of radiotherapy in a decade of technology evolution.

PURPOSE: To quantify changes in radiotherapy costs occurring in a decade of medical-technological evolution. MATERIALS AND METHODS: The activity-based costing (ABC) model of the University Hospitals Leuven (UHL) radiotherapy (RT) department was adapted to current RT standards. It allocated actual resource costs to the treatments based on the departmental work-flow and patient mix in 2009. A benchmark with the former model analyzed the cost increases related to changes in RT infrastructure and practice over 10 years. RESULTS: A considerable increase in total RT costs was observed, resulting from higher capital investments (96%) and personnel cost (103%), the latter dominating the total picture. Treatment delivery remains the most costly activity, boosted by the cost of improved quality assurance (QA), 23% of total product costs, coming along with more advanced RT techniques. Hence, cost increases at the product level are most obvious for complex treatments, such as intensity-modulated radiotherapy (IMRT), representing cost increases ranging between 38% and 88% compared to conformal approaches. CONCLUSIONS: The ABC model provides insight into the financial consequences of evolving technology and practice. Such data are a mandatory first step in our strive to prove RT cost-effectiveness and thus support optimal reimbursement and provision of radiotherapy departments.

Comparisons of health expenditure in 3 Pacific Island Countries using National Health Accounts.

National Health Accounts (NHA) is an important monitoring tool for health policy and health systems strengthening. A pilot project amongst three Pacific Island Countries (PICs) to assist in developing their NHAs, allowed these countries to identify their sources of health funds, the health providers on which these funds are spent, and the types of health goods and services provided. In this paper we report some of the findings from the NHA exercises in FSM, Fiji and Vanuatu. The development of these NHA country reports have allowed these countries to better understand the flow of financial resources from financing agents, to health providers, and to health functions. The NHA findings across the three countries enabled a comparative analysis of health expenditures between the three countries as well as with countries in the Asia Pacific Region.

Unit cost of Mohs and Dermasurgery Unit.

BACKGROUND: Appropriate pricing for medical services of not-for-profit hospital is necessary. The prices should be fair to the public and should be high enough to cover the operative costs of the organization. OBJECTIVE: The purpose of this study was to determine the cost and unit cost of medical services performed at the Mohs and Dermasurgery Unit (MDU), Department of Dermatology, The University of Texas-MD Anderson Cancer Center, Houston, TX from the healthcare provider's perspective. METHODS: MDU costs were retrieved from the Financial Department for fiscal year 2006. The patients' statistics were acquired from medical records for the same period. Unit cost calculation was based on the official method of hospital accounting. RESULTS: The overall unit cost for each patient visit was $673.99 United States dollar (USD). The detailed unit cost of nurse visit, new patient visit, follow-up visit, consultation, Mohs and non-Mohs procedure were, respectively, $368.27, $580.09, $477.82, $585.52, $1,086.12 and $858.23 USD. With respect to a Mohs visit, the unit cost per lesion and unit cost per stage were $867.89 and $242.30 USD respectively. CONCLUSIONS: Results from this retrospective study provide information that may be used for pricing strategy and resource allocation by the administrative board of MDU.

Contabilidade de custos

A novidade desta décima edição é a adaptação de seu texto às disposições dos Pronunciamentos Técnicos CPC, especialmente do CPC 16, que trata da valoração de estoques, e das Leis nºs 11.638 e 11.941.Ajustado às mais recentes evoluções conceituais e às novas tendências de utilização da Contabilidade de Custos para fins decisórios, gerenciais, este texto reúne uma série de características que o diferenciam positivamente da bibliografia disponível.A primeira entre essas características é torná-lo particularmente apropriado para a realidade brasileira, uma vez que está voltado para as situações típicas observadas no País, para seus institutos legais, para as condições organizacionais prevalecentes no meio empresarial. Assim, ao tratar dos critérios técnicos e legais relacionados, por exemplo, à contabilização dos custos da mão de obra e dos impostos, o texto refere-se explicitamente às condições brasileiras, destacando os principais aspectos relacionados aos encargos sociais existentes no País e aos dois principais tributos indiretos, o ICMS e o IPI. Ademais, foram também consideradas pelo autor as regras implícitas na Lei das Sociedades por Ações relacionadas à operacionalização contábil dos custos.Uma segunda característica do texto é a análise dedicada ao uso da Contabilidade de Custos como instrumento para fins gerenciais. Outra característica a destacar é o enfoque dado à utilização da Contabilidade de Custos para as funções de planejamento e controle, relacionadas ao estabelecimento de padrões, orçamentos e outras formas de previsão, com vistas ao subsequente acompanhamento e análise das variações observadas. Além dos critérios usuais dos sistemas de custo-padrão, o autor desenvolveu modelos para fixar padrões de custos indiretos por unidade. Finalmente, o texto traz uma avaliação crítica da implantação de sistemas de custos...