An activity-based costing approach for detecting inefficiencies of healthcare processes. Issue 1 (30th January 2015)

• Record Type: Journal Article
• Authors: Cannavacciuolo, Lorella; Illario, Maddalena; Ippolito, Adelaide; Ponsiglione, Cristina
• Is Part Of: Business process management journal. Volume 21:Issue 1(2015)
• Page Start: 55
• Page End: 79
• Publication Date: 2015-01-30
• Subjects: Case studies -- Healthcare -- Activity-based costing -- Business process reengineering; Industrial management -- Periodicals; Reengineering (Management) -- Periodicals; Total quality management -- Periodicals; 658.4063
• DOI: 10.1108/BPMJ-11-2013-0144
• Languages: English
• ISSNs: 1463-7154

Abstract

Abstract : Purpose: – The purpose of this paper is to set out a methodological framework to investigate how the integration of an activity-based costing (ABC) logic into the pre-existent accounting system supports healthcare organizations in identifying the inefficiencies related to their diagnostic therapeutic pathways (DTP) and related reengineering interventions. Design/methodology/approach: – The BPM-ABC methodological framework has been applied to the case of a specific surgery pathway, at the Orthopaedic Division of a University Hospital in Italy. Findings: – The case-study described in the paper points out: first, how the Business Process Management (BPM)-ABC methodology is able to produce significant information about consumed resources and the costs of the activities, useful to highlight opportunities for DTPs improvement; second, the barriers related to a pre-existing accounting system based on cost centres that can hinder the implementation of the BPM-ABC model. Practical implications: – The case study points out the role of the ABC as a management tool for supporting decision-making processes. The ABC allows inferring information for two purposes. First, ABC supports a cost containment process as it allows highlighting the most cost-consuming activities and resources. Second, the ABC allows identifying reengineering paths, distinguishing between incremental and radical ones. Originality/value: – This study represents a remarkable reference raising the awareness of the pivotal role accounting systems play in the management of the organizational processes.