ABSTRACT
Cleveland Clinic partnered with Harvard Business School to conduct a pilot project to explore the differences between time-driven activity-based costing (TDABC) and relative value unit costing. The goal was to determine whether TDABC could improve the accuracy of cost information and identify value-improvement opportunities for two types of heart-value procedures. Using TDABC, leaders gained a detailed look into process steps that could be consolidated, reduced, or performed with a lower cost mix of personnel.
Subject(s)
Cardiac Surgical Procedures/economics , Cost Allocation/methods , Financial Management, Hospital/methods , Heart Valves/surgery , Value-Based Purchasing , Cardiac Surgical Procedures/methods , Humans , Ohio , Organizational Case Studies , Pilot Projects , Task Performance and Analysis , Time FactorsABSTRACT
*Healthcare organizations can develop a value-based pricing strategy that benefits both patients and the organization. *The value-based pricing strategy of the Cleveland Clinic is based on five key components of value-relationship to cost, payment considerations, quality, market tolerance, and consistency. *Seven interrelated work streams can be used to align pricing inputs around the five components of value-based pricing.