Activity-based costing of health-care delivery, Haiti.

OBJECTIVE: To evaluate the implementation of a time-driven activity-based costing analysis at five community health facilities in Haiti. METHODS: Together with stakeholders, the project team decided that health-care providers should enter start and end times of the patient encounter in every fifth patient's medical dossier. We trained one data collector per facility, who manually entered the time recordings and patient characteristics in a database and submitted the data to a cloud-based data warehouse each week. We calculated the capacity cost per minute for each resource used. An automated web-based platform multiplied reported time with capacity cost rate and provided the information to health-facilities administrators. FINDINGS: Between March 2014 and June 2015, the project tracked the clinical services for 7162 outpatients. The cost of care for specific conditions varied widely across the five facilities, due to heterogeneity in staffing and resources. For example, the average cost of a first antenatal-care visit ranged from 6.87 United States dollars (US$) at a low-level facility to US$ 25.06 at a high-level facility. Within facilities, we observed similarly variation in costs, due to factors such as patient comorbidities, patient arrival time, stocking of supplies at facilities and type of visit. CONCLUSION: Time-driven activity-based costing can be implemented in low-resource settings to guide resource allocation decisions. However, the extent to which this information will drive observable changes at patient, provider and institutional levels depends on several contextual factors, including budget constraints, management, policies and the political economy in which the health system is situated.

Rethinking the cost of healthcare in low-resource settings: the value of time-driven activity-based costing.

Low-income and middle-income countries account for over 80% of the world's infectious disease burden, but <20% of global expenditures on health. In this context, judicious resource allocation can mean the difference between life and death, not just for individual patients, but entire patient populations. Understanding the cost of healthcare delivery is a prerequisite for allocating health resources, such as staff and medicines, in a way that is effective, efficient, just and fair. Nevertheless, health costs are often poorly understood, undermining effectiveness and efficiency of service delivery. We outline shortcomings, and consequences, of common approaches to estimating the cost of healthcare in low-resource settings, as well as advantages of a newly introduced approach in healthcare known as time-driven activity-based costing (TDABC). TDABC is a patient-centred approach to cost analysis, meaning that it begins by studying the flow of individual patients through the health system, and measuring the human, equipment and facility resources used to treat the patients. The benefits of this approach are numerous: fewer assumptions need to be made, heterogeneity in expenditures can be studied, service delivery can be modelled and streamlined and stronger linkages can be established between resource allocation and health outcomes. TDABC has demonstrated significant benefits for improving health service delivery in high-income countries but has yet to be adopted in resource-limited settings. We provide an illustrative case study of its application throughout a network of hospitals in Haiti, as well as a simplified framework for policymakers to apply this approach in low-resource settings around the world.