Time Driven Activity-Based Costing to Explore the Hidden Knowledge in Healthcare Processes' Costs

This paper presents a TDABC model implemented in a Gynecology and Obstetrics Department to assess and compare three important processes for the completion of childbirth: elective cesarean section, spontaneous delivery, and emergency cesarean section. The childbirth process is a relevant process as the excessive use of cesarean sections and the unmet need for it could emerge as a barrier to achieve the Sustainable Development Goals by 2030. The Gynecology and Obstetrics Department is an organization with a strong attention towards the appropriateness of childbirth processes and the cost associated to these procedures. Therefore, it is a fertile ground to implement the TDABC. The results show that the two activities that differentiate the c-section and Spontaneous delivery processes, respectively "surgery" and "labor", also represent the activities with the highest incidence in terms of cost. The contribution of this paper lies not merely in the application of sophisticated cost accounting methods, like TDABC, but rather in highlighting the potential benefits that TDABC can bring by increasing managers' awareness of the actual costs associated with the processes. According to a Value-based healthcare approach, the emerged improvements are associated to the outcome rather than to the cost. In particular, the improvements are addressed to reduce the inappropriate c-sections. Nevertheless, the application of TDABC has allowed to compute the saving than can be obtained with the reduction of c-sections.