Determination of Unit Cost of Service in Ko Lanta Hospital Employing Activity Based Approach

Abstract

Objective: To determine unit cost of services in Ko Lanta Hospital, Krabi using activity based costing. Methods: This descriptive study employed service data during the fiscal year 2017 (October 1, 2016 - September 30, 2017). There were 3 major parts of the study 1) analysis and identification of activities for each health service in the hospital 2) determination of cost category consumed by each activity and 3) calculation of service cost and unit cost respectively. Research tool was record for data collection on services and activities, labor accounts, workload/time accounts, materials accounts, equipment and buildings accounts, record of depreciation, and utilities. Results: Top three services accounting for the highest unit cost were inpatient services (2,176 baht/hospital bed day), followed by outpatient services (717 baht/visit for daytime service and 704 baht/visit for after hour service) and health promotion and prevention services (257 baht/visit), respectively. Comparison of unit cost and revenue per service revealed that cost of most services was higher than revenue except for 3 services i.e., Thai traditional medicine services, physical therapy and rehabilitation services and dental service. Classification of cost by cost category revealed that the labor cost accounted for the biggest proportion (64.10% of the total cost), followed by material cost (23.05%) and allocation cost (12.85%), respectively. Activities of pharmacy service and laboratory service accounted for the biggest proportion of service cost. Medication cost and laboratory supplies were the biggest cost for these services. Conclusion: The hospital should set up fiscal policy as followed: 1) reducing expenditure, especially labor costs by reconsidering overtime working, finding measures to contain costs of materials, ensuring rational use of medicines and laboratory supplies.2) increasing revenue by promoting patient access to Thai traditional  medicine services, dental services, and physical therapy and rehabilitation services for those with Civil Servant Medical Benefit Scheme, out of pocket payment and Social Security Scheme.