Comparison of the Ministry of Health’s tariffs with the cost of radiology services using the activity-based costing method
Keywords:
activity based costing (ABC), radiology services, public sector, governmental tariffs, IranAbstract
Introduction: Efficient use of resources in organizations is one of the most important duties of managers. Appropriate allocation of resources can help managers to do this well. The aim of this study was to determine the cost of radiology services and to compare it with governmental tariffs (introduced by the Ministry of Health in Iran).
Methods: This was a descriptive and applied study that was conducted using the retrospective approach. First, activity centers were identified on the basis of five main groups of hospital activities. Then, resources and resource drivers, activities, and hospital activity drivers were identified. At the next step, the activities related to the delivery of radiology process were identified. Last, through allocation of activities cost to the cost objects, the cost price of 66 services that were delivered in the radiology department were calculated. The data were collected by making checklists, using the hospital’s information system, observations, and interviews. Finally, the data were analyzed using the non-parametric Wilcoxon test, Microsoft Excel, and SPSS software, version 18.
Results: The findings showed that from the total cost of wages, materials, and overhead obtained, the unit cost of the 66 cost objects (delivered services) in the Radiology Department were calculated using the ABC method (Price of each unit of Nephrostogram obtained $15.8 and Cystogram obtained $18.4). The Kolmogorov-Smirnov test indicated that the distribution of data of cost price using the ABC method was not normal (p = 0.000). The Wilcoxon test showed that there was a significant difference between the cost of services and the tariff of radiology services (p = 0.000).
Conclusions: The cost of delivered services in radiology departments was significantly higher than approved tariffs of the Ministry of Health, which can have a negative impact on the quality of services.
References
Kuchta D, Ząbek S. Activity-based costing for health care institution.8thInternational Conference on
Enterprise Systems, Accounting and Logistics (8th ICESAL 2011) 11-12 July 2011, Thassos Island,
Greece.
Kittelsen ACS, Magnussen J, Anthun KS, Häkkinen U, Linna M, Medin E, et al. Hospital Productivity And
The Norwegian Ownership Reform–A Nordic Comparative Study. Available from:
www.med.uio.no/helsam/forskning/nettverk/hero/publikasjoner/skriftserie/2008/2008_10.pdf
Zhahedi M. Determine the cost of medical health services divided in different type provided services in
Boroujen centers. Proceedings of the Third Seminar on health care management students across the
country, 14 and 15 May, 1th edition. Specialized media. Tehran. 2005.
Shepard DS, Hodgkin D, Anthony YE.. Analysis of Hospital Costs: a Manual for Managers. Geneva:
World Health Organization - WHO, 2000. Translated by Pourreza A. Tehran. Higher Institute of Social
Security. 2005.
Parker D. Tackling wastage and inefficiency in the health sector. World Health Forum .2002; 15(55): 33.
Roodposhti F. Activity Based Costing, Activity based management: value creation approach. Terme press.
Tehran. 2009
Tollington T, Wachter Ph. ABC/TA for internet retail shopping. Int J Retail Distrib Manag. 2001; 29(4):
-55. doi: 10.1108/09590550110387944.
Hassanabadi MH, Sarraf AN. A Total Model for Performance Based Budgeting (diamond model). 2nd ed.
Tehran: Iran Education and Industrial Research Center, 2008: 70–120
Khozin A. What are Success Factors in Implementing costing systems/ management activities, Tehran:
Penco: 2nd International Conference of Operative Budget, 2008.
Betoman D. Calculation and Management costing, Tehran: Penco: 4th International Conference of
Operative Budget, 2010
Namazi M, Ghafari MJ, Ebrahimzade KM. A comparative review of the fuzzy activity based costing and
traditional activity based costing model in hospital services. Journal of Accounting knowledge and
Management Auditing. Winter 2013; 1(4): 1-14.
Arab M, Yousefvand M, Zahavi M. Survey and Calculating the Bed-Day cost and Day-Patient Cost of
Orthopedi Department of Khomeiny Hospital of Tehran University of Medical Science by Using Activity
Based Costing (ABC) Method -2008, jhosp. 2013; 12(1): 29-38.
Mousavi SA, Khorvash F, Fathi H, Fadai H, Hadianzarkesh S. Survey the Average of Cost in out Patient
and Imaging in Alzahra Hospital and Comparing with Service's Tariff. Health Information Management.
; 7(2): 235-42.
Muto H, Tani Y, Suzuki S, Yokooka Y, Abe T, Sase Y, et al. Filmless versus film-based systems in
radiographic examination costs: an activity-based costing method. BMC Health Serv Res. 2011; 11(1): 246.
doi: 10.1186/1472-6963-11-246.
Nisenbaum HL, Birnbaum BA, Myers MM, Grossman RI, Gefter WB, Langlotz CP. The costs of CT
procedures in an academic radiology department determined by an activity-based costing (ABC) method. J
Comput Assist Tomogr. 2000; 24(5): 813-23. PMID: 11045708.
Cinquini L, Vitali PM, Pitzalis A, Campanale C. Process view and cost management of a new surgery
technique in hospital. Bus Process Manag J. 2009; 15(6): 895-919. doi: 10.1108/14637150911003775.
Cao P, Toyabe S-i, Akazawa K. Development of a practical costing method for hospitals. Tohoku J Exp
Med. 2006; 208(3): 213-24. PMID: 16498229.
Gujral S, Dongre K, Bhindare S, Subramanian P, Narayan H, Mahajan A, et al. Activity-based costing
methodology as tool for costing in hematopathology laboratory. Indian J Pathol Microbiol. 2010; 53(1): 68- 74. doi: 10.4103/0377-4929.59187, PMID: 20090226.
Saber Mahani A, Barouni M, Bahrami MA, Goodarzi Gh, Sheikhgholami S, Ebrahimipour Z, et al. Cost
price Estimation of Radiology Services in Shafa Hospital, Kerman, 2010. Toloo-e-Behdasht. 2011; 10(1):
-61.
Ebrahimi Z. Cost price estimation of ICU services in Shafa hospital. A research project submitted to health
management and informatics faculty, Kerman university of medical sciences in partial fulfillment of BS
degree in health services administration, Kerman: 2008.
Gupta M, Galloway K. Activity-based costing/management and its implications for operations
management. Technovation. 2003; 23(2): 131-8.
Afshari A, Khatib Semnani MA, RahimNia R, Anvari Savojbolaghi S, Yusefi B. Cost Of Services In
Medical Imaging Center Of Imam Khomeini Hospital. Payavard Salamat. 2013; 7(2): 101-10.
Rajabi A, Dabiri A. Applying Activity Based Costing (ABC) Method to Calculate Cost Price in Hospital
and Remedy Services. Iran J Public Health. 2012; 41(4):100. PMID: 23113171, PMCID: PMC3481619.
Rezapour A. unit cost of service in Shohaday Haftom Tir Hospital. Journal of Qazvin University of
Medical Sciences. 2007; 10(4): 76-81.
Duffy L, Mccahey M. An Empirical Study of Adoption/Non-adoption of Activity Based Costing in
Hospitals in Ireland. UCD Business Schools Working Paper. 2008: 17-45.
Australian Government, Department of Health and Ageing. Australian Hospitals Patient Costing Standards.
MOHME Australian published. 2010: 12-87.
Published
Issue
Section
License
Copyright (c) 2020 KNOWLEDGE KINGDOM PUBLISHING
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
