Using Time-Driven Activity-Based Costing to Identify Value-Improvement Opportunities in Healthcare

Robert S. Kaplan; Mary L. Witkowski; Megan  Abbott; Alexis  Guzman; Laurence  Higgins; John  Meara; Erin  Padden; Apurva  Shah; Peter  Waters; Marco  Weidemeier; Samuel  Wertheimer; Thomas W. Feeley

Article | Journal of Healthcare Management | November–December 2014

Using Time-Driven Activity-Based Costing to Identify Value-Improvement Opportunities in Healthcare

by Robert S. Kaplan, Mary L. Witkowski, Megan Abbott, Alexis Guzman, Laurence Higgins, John Meara, Erin Padden, Apurva Shah, Peter Waters, Marco Weidemeier, Samuel Wertheimer and Thomas W. Feeley

Abstract

As healthcare providers cope with pricing pressures and increased accountability for performance, they should be rededicating themselves to improving the value they deliver to their patients: better outcomes and lower costs. Time-driven activity-based costing offers the potential for clinicians to redesign their care processes toward that end. This costing approach, however, is new to healthcare and has not yet been systematically implemented and evaluated. This article describes early time-driven activity-based costing work at several leading healthcare organizations in the United States and Europe. It identifies the opportunities they found to improve value for patients and demonstrates how this costing method can serve as the foundation for new bundled payment reimbursement approaches.

Keywords: Value Creation; Activity Based Costing and Management; Health Care and Treatment; Health Industry; United States; Europe;

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Kaplan, Robert S., Mary L. Witkowski, Megan Abbott, Alexis Guzman, Laurence Higgins, John Meara, Erin Padden, Apurva Shah, Peter Waters, Marco Weidemeier, Samuel Wertheimer, and Thomas W. Feeley. "Using Time-Driven Activity-Based Costing to Identify Value-Improvement Opportunities in Healthcare." Journal of Healthcare Management 59, no. 6 (November–December 2014): 399–413.

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Using Time-Driven Activity-Based Costing to Identify Value-Improvement Opportunities in Healthcare

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