Demand for refined and standardized cost accounting
The Guiding Opinions on Further Deepening the Reform of Basic Medical Insurance Payment Methods (Guo Ban Fa [2017] No. 55) requires public hospitals to carry out refined and standardized cost accounting to form accurate cost data, which provides government health input and financial compensation, medical service price setting and supervision, health insurance payment policy improvement, and performance evaluation of public hospitals with support.2023 In December, the General Office of the National Health Commission and three other departments studied and released the Guidebook on Cost Accounting for Public Hospitals.
The cost accounting methods for medical service programs mainly include the operation cost method, the equivalent coefficient method, and the parameter allocation method. Among them, according to the different motive factors, the operation cost method is subdivided into traditional operation cost method, Time-Driven Activity Based Costing (TDABC).
Understanding TDabc -- Time-Driven Assignment Costing / Time-Dependent Assignment Costing
Time-Driven Assignment Costing / Time-Dependent Assignment Costing (TDabc) belongs to a kind of Assignment Costing (abc), the core of which is to focus on the assignment of cost drivers, reflecting the principle of “output/service consumes work, and work consumes resources”. The core of TDabc is that it is job-centered and assigns elements to cost drivers, reflecting the principle that “output/service consumes work and work consumes resources”.
Cost drivers are measures of the events or activities that cause costs to be incurred, and can be categorized into resource drivers and operation drivers. Resource drivers are the criteria for allocating resource costs to operations centers, which reflect the consumption of resources by operations centers and are the basis for allocating resource costs to operations.
Resource drivers include parameters such as workload, man-hours, number of personnel, floor space, and material consumption.
The job motive is the criterion for allocating the cost of the job center to the product or labor, and it reflects the consumption of the job by the product. For example, why and how operations contribute to a healthcare service project is the basis for the final allocation of job costs to the healthcare service project, which reflects the fact that the healthcare service project consumes the operations, which is ultimately reflected in the cost of the healthcare service project. Job drivers include parameters such as workload, labor hours, material consumption, and technical difficulty of the healthcare service item.
Image source: Guidebook on Cost Accounting in Public Hospitals