ACTIVITY-BASED COSTING: A PRACTICAL MODEL OF COST CALCULATION IN PSYCHIATRIC HOSPITALS

Abstract

The aim: This paper is an analytical and descriptive study of the use of the Activity Based Costing (ABC) system in mental healthcare institutions for the allo¬cation of overhead costs of auxiliary units that provide non-medical services. The realistic estimates obtained using this costing system will help improve the allocation of resources, especially in the conditions of increased number of patients, and to control overhead costs, ensuring the reduction of non-productive expenses, increasing the efficiency and effectiveness of the mental health and psychosocial support institution. Materials and methods: The study describes and uses ABC as a system and method for calculating inpatient care costs in 2022. The cost of medical services will be calculated as the sum of direct and overhead costs. Overhead costs into inpatient care consist of medical support units overhead costs and non-medical support units overhead costs. Overhead costs in non-medical support units were allocated to the cost of services within the cost centers:hospital departments that specialize in the treatment of specific mental health conditions. Expert opinion regarding the alignment of the cost allocation base with the factors identified for the allocation of each group of overhead costs in the mental health and psychosocial support facility was taken into account . Results: Calculations showed the impracticality of using a single tariff for psychiatric care medical services for adults and children in inpatient conditions, since there are cost centers, namely, clinical departments of health care institutions, which consume a larger amount of resources. In particular, these are the departments providing the treatment of psychotic disorders caused by taking psychoactive substances, as well as schizophrenic, organic disorders, including symptomatic, mental disorders). Accordingly, the tariff for such medical services should be higher. Conclusions: ABC is applicable in mental health care institutions and can help to efficiently cost processes, and thereby overcome a key challenge: to overesti¬mation or underestimation of costs into a medical services. Cost assignment through ABC generated more accurate cost estimates, which suggests that model of cost calculation ABC is more able to address complexity in mental health care institutions. ABC should be gradually incorporated into an estimated approach to costing leads, to progressively bring reliable cost-accounting practices to mental health care institutions