Process-based costing.
Understanding how quality improvement affects costs is important. Unfortunately, low-cost, reliable ways of measuring direct costs are scarce. This article builds on the principles of process improvement to develop a costing strategy that meets both criteria. Process-based costing has 4 steps: developing a flowchart, estimating resource use, valuing resources, and calculating direct costs. To illustrate the technique, this article uses it to cost the care planning process in 3 long-term care facilities. We conclude that process-based costing is easy to implement; generates reliable, valid data; and allows nursing managers to assess the costs of new or modified processes.
Lee
Robert H
RH
Department of Health Policy and Management, School of Medicine, University of Kansas Medical Center, 3901 Rainbow Blvd, Kansas City, KS 66160, USA. rlee2@kumc.edu
Bott
Marjorie J
MJ
Forbes
Sarah
S
Redford
Linda
L
Swagerty
Daniel L
DL
Taunton
Roma Lee
RL
D003361:Cost Allocation / Q000379:methods*; D003362:Cost-Benefit Analysis; D003625:Data Collection / Q000379:methods; D004180:Direct Service Costs / Q000706:statistics & numerical data*; D006801:Humans; D017059:Models, Econometric; D017146:Models, Organizational; D010347:Patient Care Planning / Q000191:economics*; D017064:Process Assessment, Health Care / Q000191:economics*; D015203:Reproducibility of Results; D012866:Skilled Nursing Facilities / Q000191:economics; D012985:Software Design; D017749:Total Quality Management / Q000379:methods*