Time Driven Activity Based Costing and Implementation On Health Care Services
Keywords:
Time Driven, Activity Based Costing, Health Care
Abstract
The determination of value in health care is identified as an outcome per unit of cost that depends on the accuracy of cost measurement. This study aims to review the implementation of Time driven activity based costing (TDABC) in various business areas and use TDABC to determine the cost of health care services in primary clinics. Case study method was conducted at Pratama Clinic. Interviews, direct observation and documentation were conducted to collect data. Results show that TDABC can be used in clinics to measure costs through care pathways. TDABC can help improve effectiveness, reduce costs and inform managers to take decisions to control cost efficiency and evaluate unused capacity.
Keywords: Time Driven, Activity Based Costing, Health Care
JEL: M41,I14
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References
Almeida, A., & Cunha, J., (2017), The implementation of an Activity Based Costing (ABC) system in a manufacturing company, Procedia manufacturing, Vol. 13, pp. 932-939.
Anderson, S.W., (1995), A framework for assessing cost management system changes: the case of activity based costing implementation at General Motors 1985-1993, Journal of management Accounting Research, vol. 7, pp. 1-51.
Anderson, S.W. &Young, S.M. (1999), The impact of contextual and process factors on the evaluation of activity based costing system, Accounting, organization and Society, Vol. 24, pp.525-559.
Anderson, S., Prokop, K. & Kaplan, R.S. (2007), Fast track profit models: more powerful due diligence process for managers and aquisitions, The Journal of private equity, 10 (3), pp. 22-34.
Balakrishnan, R., Labro, E. and Sivaramakrishman, K., (2012), Product cost as decision aids: an analysis of alternative approaches (part 2), Accounting Horizon, Vol. 26, No. 1, pp. 21-41.
Barros, R.S., Maria, A., and Simoes DCF., D. (2017), Time Driven Activity Based Costing: designing a model in Portuguese production environment, Qualitative Research in Accounting & Management , Vol. 14, Iss. 1, pp. 1-31.
Brugmenann, W., Everaert, P., Steven, S.R., Levant, Y.,( 2005), Modelling logistic cost using TDABC: a a case in a distribution company, University Ghent, Faculti of economics and business administration, http://ideas.repec.org/p/rug/rugwps/05-332.html
Chen, A., Sabharwal, S., Ahktar, K., Makaram, N., & Gupte, C.M., (2015), Time driven activity based costing of total knee replacement surgery at a London teaching Hospital, The Knee, Vol. 22, Iss.6, pp. 640-645.
Ching, S., Leung, M., Fidow, M., Huang, K., (2008), Allocating cost in the business operation of library consortium: the case study of super e book consortium, Library collectioun, acquisition and technical services, Vol. 32, iss. 2, pp. 97-103.
Datar, S., & Gupta, M., (1994), Aggregation spesification and measurment errors in product costing, Accounting Review, Vol.69, No.4, 567-591
Dalci, I., Tanis, V. And Kosan, L. (2010), Customer profitability analysis with Time Driven Activity Based Costing: a case study in a hotel, International Journal of Contemporary Hopitality Management, Vol. 22, No. 5, pp. 609-637.
Dejnega, O., (2011), Method time driven activity based costing- literature review, Journal of applied economic sciences, Vol. 6, Iss. 1 (15), 6-15.
Demeere, N., Stouthuysen, K. And Roodhooft, F. (2009), Time Driven Activity Based Costing in outpatient clinic environment: develompent, relevance and managerial impact, Health Policy, Vol.92, pp. 296-304.
Ellis-Newman, J. & Robinson, P., (1998), The cost of library services: activity based costing in an australia academic library, The journal of academic librarianship, vol.24, pp. 373-379.
Ellis-Newman, J., (2003), Activity based costing in user services of an academic library, Library Trend, Vol. 51, pp. 333-348.
Evereart, P., Bruggeman, W., Saren, G., Anderson, S.R., & Levant, Y. (2008), Cost modelling in logistics using time driven ABC: experience from wholesaler, International Journal of Physical Distribution & Logistic Management, 38 (3), 172-191.
French, K.E., Albright, H.W., Fenzel, J.C., Incalcaterra, J.R., Rubio, A.C., Jone, J.F., Feeley, T.W., Measuring the value of process improvement initiatives in preoperative assessment center using time driven activity based costing, Helathcare, Vol. 1, Iss.3-4, pp. 136-142
Gosselin, M., (2007), A review of activity based costing: technique, implementation, and consequences, Handbook of Management Accounting Research, edited by Chapman, C.C., Hopwood, A.G., & Shields, M.D., Elsevier Ltd.
Hajiha, Z., & Alishah, S.S., (2011), Implementation of time driven activity based costing system and customer profitability analysis in the hospitality industry: evidence from Iran, Economic and Finance Review, Vol. 1, No. 8, pp. 57-67,
Hoozee, S., Bruemann, W., (2010), Identifying operational improvement during the design process of a time driven ABC system: the role of collective worker participation and leadership style, Management accounting research, Vol. 21, iss. 3, pp. 185-198.
Hoozee, S., Vermeire, L. and Brugemann, W., (2012), The impact of refinement on the accuracy of Time Driven ABC, Abacus, Vol. 48, No. 4, pp.-439-472.
Innes, J., Mitchell, F., (1995), a survey of activity based costing in the UK’s largest companies, Management Accounting Research, Vol. 6, pp. 137-153
Innes, J., Mitchell, F. & Sinclair, D., (2000), Activity based costing in the UK’s largest companies: a comparison of 1994 and 1999 survey result, Management Accounting Research, Vol. 11, no.3, pp.349-362.
Kaplan, A.L., Agarwal, N., Setlur, N.P., Tan, H.J., Niedzwiecki, D., McLaughin, N., Burke, M.A., Steinberg, K., Chamie, K., & Saigal, C.S., (2015), Measuring the cost of care in benign prostatic Hyperplasia using time driven activity based costing (TDABC), Healthcare, Vol. 3, iss. 1, pp. 43-48.
Kaplan, R.S. and Anderson, S.R. (2004), Time Driven Activity Based Costing, Harvard Business Review, November, pp. 131-138.
Kaplan, R.S. and Anderson, S.R. (2007), The innovation of Time Driven Activity Based Costing, Cost Management, Vol. 21, No. 2., pp. 5-15.
Keel, G., Savage, C., Rafiq, M., Mazzocato, P., (2017), Time driven activity based costing in health care : a systematic review of the literature, Health Policy, Vol. 121, iss. 7, pp. 755-763.
Liu, L.Y.J. & Pan, F. (2007), The implementation of activity based costing in China: an innovationa action research approach, British Accounting Review, Vol 39, No.3, pp.249-264.
Madhok, A., Keyhani, M., Bossink, B. (2015), Understanding alliance evolution and termination: adjustment cost and the economics of resource value, Strategic Oeganization, 13 (2),pp.91-116.
Mortaji, S.T.H., Bagherpour, M., & Mazdeh, M.M. (2013), Fuzzy driven activity based costing, Engineering Management Journal, Vol. 25, No. 3, pp.63-73.
Narayanan, V.G., & Sarkar, R.G., (2002), The impact of activity based costing on managerial decision iat insteel industries- a field study, Journal of economic and Management Strategy, Vol 11, no. 2, pp. 257-288.
Oker, F. and Adiguzel, H. (2010), Time Driven Activity Based Costing Sistem: an implementation in a manufacturing company, The Journal of Corporate Accounting & Finance, Vol. 22, No. 1, pp.75-92.
Ozbayrak, M., Akgun, M., & Turker, A.K. (2004), Activity based cost estimation in a push/pull advances manufacturing system, International journal of production economics, 87 (1), pp. 49-65.
Pernot, E., Roodhooft, F., Van den Abbeele, A. (2007), Time driven activity based costing for inter library services: a case study in a university, The journal of academic librarianship, Vol. 33, No. 5, pp. 551-560.
Quinn, M., Elafi, O. & Mulgrew, M., (2017), Reason for not Changing to Activity Based Costing: a Survey of Irish Firms, PSU Research Review, Vol.1, Issue 1, pp.63-70.
Ratnatunga, J., Tse, M. S.C.,& Balachandran, K.R., (2012), Cost management in Srilanka: a Case study on volume, activity and time as cost drivers, International journal of Accounting, Vol. 47, pp. 281-301.
Siguenza-Guzman, L., Van den Abbeele, A., Vandewalle, J., Verhaaren, H. & Cattrysee, D. (2013), Recent evolution in costing system: a literature review of time driven activity based costing, Review of Business and Economic Literature, 58 (1), pp. 34-64.
Siguenza-Guzman, L., Van den Abbeele, A. & Cattrysee, D. (2014), Time driven activity based costing system for cataloguing process: a case study, Liber Quarterly, Vol. 23, No. 3, pp. 160-186.
Stout, D. E. and Propri, J.M. (2011), Implementing Time Driven Activity Based Costing at a medium size electronic company, Management Accounting Quarterly, Vol. 12, No. 3, pp.1-11.
Stouthuysen, K., Swiggers, M., Reheul, A., Roodhooft, F., (2010), Time driven activity based costing for a library aquisition process: a case study in a Belgium University, Library Collection, Acquisitions, & Technical Services, Vol 34, Iss, 203, pp. 83-91.
Stratton, W.O., Desroches, D., Lawson, R.A., and Hatch, T., (2009),Activity based costing: is it still relevant? Management Accounting Quarterly, Vol. 12, No.3, pp.1-11.
Anderson, S.W., (1995), A framework for assessing cost management system changes: the case of activity based costing implementation at General Motors 1985-1993, Journal of management Accounting Research, vol. 7, pp. 1-51.
Anderson, S.W. &Young, S.M. (1999), The impact of contextual and process factors on the evaluation of activity based costing system, Accounting, organization and Society, Vol. 24, pp.525-559.
Anderson, S., Prokop, K. & Kaplan, R.S. (2007), Fast track profit models: more powerful due diligence process for managers and aquisitions, The Journal of private equity, 10 (3), pp. 22-34.
Balakrishnan, R., Labro, E. and Sivaramakrishman, K., (2012), Product cost as decision aids: an analysis of alternative approaches (part 2), Accounting Horizon, Vol. 26, No. 1, pp. 21-41.
Barros, R.S., Maria, A., and Simoes DCF., D. (2017), Time Driven Activity Based Costing: designing a model in Portuguese production environment, Qualitative Research in Accounting & Management , Vol. 14, Iss. 1, pp. 1-31.
Brugmenann, W., Everaert, P., Steven, S.R., Levant, Y.,( 2005), Modelling logistic cost using TDABC: a a case in a distribution company, University Ghent, Faculti of economics and business administration, http://ideas.repec.org/p/rug/rugwps/05-332.html
Chen, A., Sabharwal, S., Ahktar, K., Makaram, N., & Gupte, C.M., (2015), Time driven activity based costing of total knee replacement surgery at a London teaching Hospital, The Knee, Vol. 22, Iss.6, pp. 640-645.
Ching, S., Leung, M., Fidow, M., Huang, K., (2008), Allocating cost in the business operation of library consortium: the case study of super e book consortium, Library collectioun, acquisition and technical services, Vol. 32, iss. 2, pp. 97-103.
Datar, S., & Gupta, M., (1994), Aggregation spesification and measurment errors in product costing, Accounting Review, Vol.69, No.4, 567-591
Dalci, I., Tanis, V. And Kosan, L. (2010), Customer profitability analysis with Time Driven Activity Based Costing: a case study in a hotel, International Journal of Contemporary Hopitality Management, Vol. 22, No. 5, pp. 609-637.
Dejnega, O., (2011), Method time driven activity based costing- literature review, Journal of applied economic sciences, Vol. 6, Iss. 1 (15), 6-15.
Demeere, N., Stouthuysen, K. And Roodhooft, F. (2009), Time Driven Activity Based Costing in outpatient clinic environment: develompent, relevance and managerial impact, Health Policy, Vol.92, pp. 296-304.
Ellis-Newman, J. & Robinson, P., (1998), The cost of library services: activity based costing in an australia academic library, The journal of academic librarianship, vol.24, pp. 373-379.
Ellis-Newman, J., (2003), Activity based costing in user services of an academic library, Library Trend, Vol. 51, pp. 333-348.
Evereart, P., Bruggeman, W., Saren, G., Anderson, S.R., & Levant, Y. (2008), Cost modelling in logistics using time driven ABC: experience from wholesaler, International Journal of Physical Distribution & Logistic Management, 38 (3), 172-191.
French, K.E., Albright, H.W., Fenzel, J.C., Incalcaterra, J.R., Rubio, A.C., Jone, J.F., Feeley, T.W., Measuring the value of process improvement initiatives in preoperative assessment center using time driven activity based costing, Helathcare, Vol. 1, Iss.3-4, pp. 136-142
Gosselin, M., (2007), A review of activity based costing: technique, implementation, and consequences, Handbook of Management Accounting Research, edited by Chapman, C.C., Hopwood, A.G., & Shields, M.D., Elsevier Ltd.
Hajiha, Z., & Alishah, S.S., (2011), Implementation of time driven activity based costing system and customer profitability analysis in the hospitality industry: evidence from Iran, Economic and Finance Review, Vol. 1, No. 8, pp. 57-67,
Hoozee, S., Bruemann, W., (2010), Identifying operational improvement during the design process of a time driven ABC system: the role of collective worker participation and leadership style, Management accounting research, Vol. 21, iss. 3, pp. 185-198.
Hoozee, S., Vermeire, L. and Brugemann, W., (2012), The impact of refinement on the accuracy of Time Driven ABC, Abacus, Vol. 48, No. 4, pp.-439-472.
Innes, J., Mitchell, F., (1995), a survey of activity based costing in the UK’s largest companies, Management Accounting Research, Vol. 6, pp. 137-153
Innes, J., Mitchell, F. & Sinclair, D., (2000), Activity based costing in the UK’s largest companies: a comparison of 1994 and 1999 survey result, Management Accounting Research, Vol. 11, no.3, pp.349-362.
Kaplan, A.L., Agarwal, N., Setlur, N.P., Tan, H.J., Niedzwiecki, D., McLaughin, N., Burke, M.A., Steinberg, K., Chamie, K., & Saigal, C.S., (2015), Measuring the cost of care in benign prostatic Hyperplasia using time driven activity based costing (TDABC), Healthcare, Vol. 3, iss. 1, pp. 43-48.
Kaplan, R.S. and Anderson, S.R. (2004), Time Driven Activity Based Costing, Harvard Business Review, November, pp. 131-138.
Kaplan, R.S. and Anderson, S.R. (2007), The innovation of Time Driven Activity Based Costing, Cost Management, Vol. 21, No. 2., pp. 5-15.
Keel, G., Savage, C., Rafiq, M., Mazzocato, P., (2017), Time driven activity based costing in health care : a systematic review of the literature, Health Policy, Vol. 121, iss. 7, pp. 755-763.
Liu, L.Y.J. & Pan, F. (2007), The implementation of activity based costing in China: an innovationa action research approach, British Accounting Review, Vol 39, No.3, pp.249-264.
Madhok, A., Keyhani, M., Bossink, B. (2015), Understanding alliance evolution and termination: adjustment cost and the economics of resource value, Strategic Oeganization, 13 (2),pp.91-116.
Mortaji, S.T.H., Bagherpour, M., & Mazdeh, M.M. (2013), Fuzzy driven activity based costing, Engineering Management Journal, Vol. 25, No. 3, pp.63-73.
Narayanan, V.G., & Sarkar, R.G., (2002), The impact of activity based costing on managerial decision iat insteel industries- a field study, Journal of economic and Management Strategy, Vol 11, no. 2, pp. 257-288.
Oker, F. and Adiguzel, H. (2010), Time Driven Activity Based Costing Sistem: an implementation in a manufacturing company, The Journal of Corporate Accounting & Finance, Vol. 22, No. 1, pp.75-92.
Ozbayrak, M., Akgun, M., & Turker, A.K. (2004), Activity based cost estimation in a push/pull advances manufacturing system, International journal of production economics, 87 (1), pp. 49-65.
Pernot, E., Roodhooft, F., Van den Abbeele, A. (2007), Time driven activity based costing for inter library services: a case study in a university, The journal of academic librarianship, Vol. 33, No. 5, pp. 551-560.
Quinn, M., Elafi, O. & Mulgrew, M., (2017), Reason for not Changing to Activity Based Costing: a Survey of Irish Firms, PSU Research Review, Vol.1, Issue 1, pp.63-70.
Ratnatunga, J., Tse, M. S.C.,& Balachandran, K.R., (2012), Cost management in Srilanka: a Case study on volume, activity and time as cost drivers, International journal of Accounting, Vol. 47, pp. 281-301.
Siguenza-Guzman, L., Van den Abbeele, A., Vandewalle, J., Verhaaren, H. & Cattrysee, D. (2013), Recent evolution in costing system: a literature review of time driven activity based costing, Review of Business and Economic Literature, 58 (1), pp. 34-64.
Siguenza-Guzman, L., Van den Abbeele, A. & Cattrysee, D. (2014), Time driven activity based costing system for cataloguing process: a case study, Liber Quarterly, Vol. 23, No. 3, pp. 160-186.
Stout, D. E. and Propri, J.M. (2011), Implementing Time Driven Activity Based Costing at a medium size electronic company, Management Accounting Quarterly, Vol. 12, No. 3, pp.1-11.
Stouthuysen, K., Swiggers, M., Reheul, A., Roodhooft, F., (2010), Time driven activity based costing for a library aquisition process: a case study in a Belgium University, Library Collection, Acquisitions, & Technical Services, Vol 34, Iss, 203, pp. 83-91.
Stratton, W.O., Desroches, D., Lawson, R.A., and Hatch, T., (2009),Activity based costing: is it still relevant? Management Accounting Quarterly, Vol. 12, No.3, pp.1-11.
Published
2018-06-18
How to Cite
azmi, zul. (2018). Time Driven Activity Based Costing and Implementation On Health Care Services. Jurnal Akuntansi Dan Ekonomika, 8(1), 75-84. Retrieved from https://ejurnal.umri.ac.id/index.php/jae/article/view/736
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Articles
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