J Korean Acad Nurs.  2011 Aug;41(4):500-509. 10.4040/jkan.2011.41.4.500.

Analysis of Cost and Efficiency of a Medical Nursing Unit Using Time-Driven Activity-Based Costing

• Lim JY
• Kim MJ
• Park CG

• KMID: 1018335
• DOI: http://doi.org/10.4040/jkan.2011.41.4.500

Abstract

PURPOSE
Time-driven activity-based costing was applied to analyze the nursing activity cost and efficiency of a medical unit.
METHODS
Data were collected at a medical unit of a general hospital. Nursing activities were measured using a nursing activities inventory and classified as 6 domains using Easley-Storfjell Instrument. Descriptive statistics were used to identify general characteristics of the unit, nursing activities and activity time, and stochastic frontier model was adopted to estimate true activity time.
RESULTS
The average efficiency of the medical unit using theoretical resource capacity was 77%, however the efficiency using practical resource capacity was 96%. According to these results, the portion of non-added value time was estimated 23% and 4% each. The sums of total nursing activity costs were estimated 109,860,977 won in traditional activity-based costing and 84,427,126 won in time-driven activity-based costing. The difference in the two cost calculating methods was 25,433,851 won.
CONCLUSION
These results indicate that the time-driven activity-based costing provides useful and more realistic information about the efficiency of unit operation compared to traditional activity-based costing. So time-driven activity-based costing is recommended as a performance evaluation framework for nursing departments based on cost management.

Keyword

Costs and cost analysis; Patients' rooms; Efficiency

MeSH Terms

Costs and Cost Analysis
Hospitals, General/economics
Humans
Internal Medicine/*economics
Nursing Service, Hospital/*economics
Task Performance and Analysis
Time Factors

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