A Case Study Of Activity-based Cost Management For Diseases At Hospital A

As the reformation of medical system in China became more advanced in recent years,it has been trending to charge medical cost based on diagnosis related groups(DRGs).In order to survive in this competitive industry,hospitals are urged to control cost and to ensure economic benefits,as well as to provide the best service to patients for minimum spent.Hospital A has been under many operation and economic difficulties due to lack of DRGs cost calculation algorithm and backward cost control management.This paper summarized the current methodology and theory of hospital cost management in the industry,upon the review of large amount of domestic and international papers.This work took senile cataract surgery(SCS)as an example,compared the disease cost in A hospital with two different cost calculation models: model A was full cost model,which was achieved upon the proportion of department business and cost;model B was the activity-based cost(ABC)model,which was determined upon the resource and cost tracking of the standard clinical pathway for the disease.For conclusion,the current operation cost of SCS in hospital(model A,full cost model)is 9413.58 yuan,with an average loss of 514.87 yuan per operation from hospital A side.The cost of SCS estimated from model B(activity-based cost)is 8721.97 yuan,which offers a profit of 176.74 yuan.This shows activity-based costing(ABC)can calculate the cost more accurately,which has a meaningful practical application for cost control.In order to avoid overspending in medical insurance,we should choose activity-based costing method as the prioritized method to calculate disease cost,to strengthen cost control,and to improve economic efficiency.This paper aimed to reduce medical cost and cost overrun,and combined the cost management with medical insurance,as well as to help hospitals to turn operation difficulty around.As the interviewees were frontline medical personnel and the data obtained were mostly based on experience,errors might occur and affect the accuracy of the cost accounting data,which could be further improved in the future research.