Case | HBS Case Collection | January 2000 (Revised October 2002)

Cambridge Hospital Community Health Network - The Primary Care Unit

by V.G. Narayanan, Lisa Brem and Ryan Moore

Abstract

The Cambridge Hospital Community Health Network needed to gain a better understanding of its unit-of-service costs, which had been rising at a rate of 10% per year. The network's step-down costing system gave only aggregate costing information, and there was some concern that it might be inaccurately representing the true cost of the intern and resident program, the interpretive services department, and the use of nurse practitioners. So the Primary Care Unit (PCU) initiated a pilot activity-based costing program. The case provides detailed exhibits on the methods of allocating costs using activity-based drivers.

Keywords: Activity Based Costing and Management; Health Care and Treatment; Cost Accounting; Cost; Network Effects; Health Industry; Service Industry; Massachusetts;

Citation:

Narayanan, V.G., Lisa Brem, and Ryan Moore. "Cambridge Hospital Community Health Network - The Primary Care Unit." Harvard Business School Case 100-054, January 2000. (Revised October 2002.)