A Time-Driven Activity-Based Costing Approach for Identifying Variability in Costs of Childbirth Between and within Types of Delivery

Abstract

Background Recently, time-driven activity-based costing (TDABC) is put forward as an alternative, more accurate costing method to calculate the cost of a medical treatment because it allows the assignment of costs directly to patients. The objective of this paper is to demonstrate how the overall cost of childbirth at the maternity department can be calculated by implementing a TDABC analysis. In addition, this study outlines how this costing method can be utilized to provide insights into how patient and disease characteristics drive variability within childbirth cost. Through the use of process mapping, TDABC allows to exactly identify which activities and corresponding resources are impacted by these characteristics, leading to a more detailed understanding of childbirth cost.Methods Process maps were developed for two types of childbirth, vaginal delivery (VD) and caesarean section (CS). Costs were obtained from the financial department and capacity cost rates were calculated accordingly. Results Overall, the cost of childbirth equals €1894,12 and is mainly driven by personnel costs (89,0%). Monitoring after birth is the most expensive activity on the pathway, costing €1149,70. Significant cost variations between type of delivery were found, with VD costing €1808,66 compared to €2463,98 for a CS. Prolonged clinical visit (+33,3 min) and monitoring (+775,2 min) in CS were the main contributors to this cost difference. Within each delivery type, age, parity, number of gestation weeks and education attainment were found to drive cost variations. In particular, for VD an age >25 years, nulliparous, gestation weeks > 40 weeks and higher education attainment were associated with higher costs. Similar results were found within CS for age, parity and number of gestation weeks.Conclusions TDABC is a valuable approach to measure and understand the variability in costs of childbirth and its associated drivers over the full care cycle. Accordingly, these findings can inform health care providers, managers and regulators on process improvements and cost containment initiatives.

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“…Calculating costs using TD‐ABC requires mapping of the care process and resource utilization for an individual patient. Time‐driven activity‐based costing can assist with creating greater cost transparency, allowing one to identify relevant cost drivers, and as such can generate insights for reducing low‐value care and costs 33–35 …”

“…Time-driven activity-based costing can assist with creating greater cost transparency, allowing one to identify relevant cost drivers, and as such can generate insights for reducing low-value care and costs. [33][34][35]…”