Activity-Based Costing vs. Patient Safety

Paper Summary:

The paper explains that activity-based costing (ABC) allows accountants to obtain a more precise view of the costs associated with specific products or services. This paper uses a case analysis to explore how ABC can help to achieve greater cost effectiveness in the healthcare industry. The paper concludes that although ABC can play an important role in reducing healthcare costs, little can be done to reduce direct costs associated with a procedure without a sacrifice of patient safety.

Outline:
Introduction
Objective of the paper
Analysis, Findings & Discussion
Suggestions, Recommendations & Conclusions

From the Paper:

"Activity-Based Costing (ABC) allocates the costs of production to specific products or services. It is more precise than older methods of accounting that involved adding a broad percentage of expenditures to direct and indirect costs. The definitions of direct and indirect costs varied and were often a judgement call on the part of the accountant. ABC allowed accountants to obtain a more precise view of the costs associated with specific products or services."

Sample of Sources Used:

• Grandlich, C. (2004). Using activity-based costing in surgery. AORN Journal. Jan 2004. 79, 189-192.
• Kaplan, R. & Bruns, W.(1987) Accounting and Management: A Field Study Perspective. Boston, Mass: Harvard Business School Press.
• Lapsley, I. (2005). Activity based costing in healthcare: a UK case study. Research in Healthcare Financial Management. January 1 2005. Retrieved August 22, 2007 from http://www.allbusiness.com/management/business-process-analysis/870829-1.html.

More papers on Activity-Based Costing vs. Patient Safety:

• Case Study # 142626 : "Activity Based Costing"
• Research Paper # 88712 : "Activity-Based Costing"
• Business Plan # 104635 : "Implementing the Activity-Based Costing System"

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