Costing Healthcare Services Using Time-Driven Activity-Based Costing: A Simple Step-By-Step Guide for Data Collection and Analysis

Lumbwe Chola, Ryan McBain and Y-Ling Chi
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Lumbwe Chola: Health Management and Health Economics Department, University of Oslo
Ryan McBain: Division of Health Care Delivery, RAND Corporation
Y-Ling Chi: Center for Global Development

No 271, Policy Papers from Center for Global Development

Abstract: Cost information is essential for priority setting and optimized resource allocation in the healthcare sector, especially in low- and middle-income countries (LMICs) where resource constraints and opportunity costs are significant. In recent years, a costing approach labelled time-driven activity-based costing (TDABC) has gained prominence, as a means for more closely estimating unit costs. TDABC is a process-based micro-costing methodology that adopts a patient perspective to identify resources that are allocated over the course of service provision, mapping each step of a patient journey. Unlike other activity-based costing methods, TDABC includes the recording of the amount of time that resources are utilized for each activity. The manuscript is developed as a step-by-step guide for researchers, students and policy makers intending to undertake TDABC. While there are many academic resources explaining the theory and steps to conduct TDABC, in this paper, we provide easily accessible descriptions of methods for collecting data, tools that can be adapted to diverse research questions and settings, as well as practical data collection “tips” we learned from applying approaches on the ground.

Pages: 32 pages
Date: 2022-10-24
New Economics Papers: this item is included in nep-hea
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