Activity-based Cost Analysis: A Method of Analyzing the Financial and Operating Performance of Academic Radiology Departments1
ABSTRACT To develop a methodology for an activity-based cost (ABC) analysis in an academic radiology department, to test the hypothesis that the business of academic radiology can be separated into three distinct businesses-clinical activity, teaching, and research-and to determine the effect of the current teaching paradigm on clinical productivity.
Forty-seven key departmental activities were defined and distributed among the teaching, research, and clinical businesses. Individual radiologists determined the time spent in each of these activities by completing a detailed log of every activity performed during 2 weeks. All departmental revenue and costs were assigned to each activity in each of the three businesses.
The methodology provided a successful understanding of the relative costs of each of the businesses of teaching, research, and clinical activity. It also provided the departmental costs of performing the separate activities typical of each business. Key findings included the following: Faculty spends 72% of time in clinical activities, research is the most expensive service per direct activity hour, and clinical reads (23%) are the single largest departmental cost element.
ABC analysis can separate academic radiology into three businesses-teaching, research, and clinical-and provide a detailed understanding of the cost structure of each. This analysis identifies opportunities for improved quality of service, productivity, and cost within each business.
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ABSTRACT: Tuberculin skin testing (TST) and chest X-ray are the conventional methods used for tracing suspected tuberculosis (TB) patients. The purpose of the study was to calculate the cost incurred by Penang General Hospital on performing one contact tracing procedure using an activity based costing approach. Contact tracing records (including the demographic profile of contacts and outcome of the contact tracing procedure) from March 2010 until February 2011 were retrospectively obtained from the TB contact tracing record book. The human resource cost was calculated by multiplying the mean time spent (in minutes) by employees doing a specific activity by their per-minute salaries. The costs of consumables, Purified Protein Derivative vials and clinical equipment were obtained from the procurement section of the Pharmacy and Radiology Departments. The cost of the building was calculated by multiplying the area of space used by the facility with the unit cost of the public building department. Straight-line deprecation with a discount rate of 3% was assumed for the calculation of equivalent annual costs for the building and machines. Out of 1024 contact tracing procedures, TST was positive (≥10 mm) in 38 suspects. However, chemoprophylaxis was started in none. Yield of contact tracing (active tuberculosis) was as low as 0.5%. The total unit cost of chest X-ray and TST was MYR 9.23 (2.90 USD) & MYR 11.80 (USD 3.70), respectively. The total cost incurred on a single contact tracing procedure was MYR 21.03 (USD 6.60). Our findings suggest that the yield of contact tracing was very low which may be attributed to an inappropriate prioritization process. TST may be replaced with more accurate and specific methods (interferon gamma release assay) in highly prioritized contacts; or TST-positive contacts should be administered 6H therapy (provided that the chest radiography excludes TB) in accordance with standard protocols. The unit cost of contact tracing can be significantly reduced if radiological examination is done only in TST or IRGA positive contacts.SpringerPlus 01/2012; 1:40. DOI:10.1186/2193-1801-1-40
- Medical Imaging, 12/2011; , ISBN: 978-953-307-774-1
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ABSTRACT: Activity based costing (ABC) is an approach to get insight of true costs and to solve accounting problems. It provides more accurate information on product cost than conventional accounting system. The purpose of this study was to identify detailed resource consumption for chest x-ray procedure. Human resource cost was calculated by multiplying the mean time spent by employees doing specific activity to their per-minute salaries. The costs of consumables and clinical equipments were obtained from the procurement section of the Radiology Department. The cost of the building was calculated by multiplying the area of space used by the chest X-ray facility with the unit cost of public building department. Moreover, straight-line deprecation with a discount rate of 3% was assumed for calculation of equivalent annual costs for building and machines. Cost of electricity was calculated by multiplying number of kilo watts used by electrical appliance in the year 2010 with electricity tariff for Malaysian commercial consumers (MYR 0.31 per kWh). Five activities were identified which were required to develop one chest X-ray film. Human resource, capital, consumable and electricity cost was MYR 1.48, MYR 1.98, MYR 2.15 and MYR 0.04, respectively. Total cost of single chest X-ray was MYR 5.65 (USD 1.75). By applying ABC approach, we can have more detailed and precise estimate of cost for specific activity or service. Choice of repeating a chest X-ray can be based on our findings, when cost is a limiting factor.06/2012; 12:40.