Process View and Cost Management of a New Surgery Technique in Hospital

Business Process Management Journal Vol. 15, No. 6, pp. 895-919, 2009

Posted: 9 Sep 2007 Last revised: 25 Nov 2009

See all articles by Lino Cinquini

Lino Cinquini

Scuola Superiore Sant'Anna- Institute of Management

Paola Miolo Vitali

University of Pisa

Arianna Pitzalis

University of Pisa

Cristina Campanale

Scuola Superiore Sant'Anna di Pisa

Date Written: September 7, 2007

Abstract

Purpose – The purpose of this paper is to analyze the potentiality in the application of process analysis and activity-based costing (ABC) in a healthcare setting to produce usable, useful and correct information on resource consumption and processes. The paper aims to analyze changes applied to the traditional costing model in order to represent the work flow of the organization and the related additional information usable by decision makers at different levels. In particular, the paper is focused on economic analysis related to the introduction of a new surgical technique in healthcare.

Design/methodology/approach – An empirical case study is developed in a Tuscan hospital from September 2005 to March 2006, data being collected through interviews to employees and direct observations.

Findings – Several factors are found to be critical in such a process analysis and in an ABC implementation in healthcare. First, the need to ground the development of the model structure on the specific characteristics of the organizational setting and the clinical work performed. Second, a problem of culture and language, because professionals have difficulties in understanding the language of activities, and they cannot accept a model designed to measure their work; therefore, some resistances may occur. Third, the constraint of information; in fact more precise estimation may be limited by the information available, as in this case.

Research limitations/implications – The paper provides a framework for future research. The replication of the methodology in other hospitals, in order to test the validity of the model and to compare results, can be interesting and another can be the analysis of benefits that the application of the system can provide (in terms of improved efficiency) through a longitudinal analysis.

Originality/value – The paper contributes to the field study of ABC and process analysis in healthcare. The original contribution of the model lies in the classification of activities in a hierarchy across the organization, which allows a more precise identification of cost driver; and in the “hybrid” nature (a combination of cost centres and activities) of the model. The latter allows one to identify a “full cost” of the patient.

Keywords: Activity-Based Costing, economic assessment of surgery techniques

JEL Classification: M40, M46, I19

Suggested Citation

Cinquini, Lino and Miolo Vitali, Paola and Pitzalis, Arianna and Campanale, Cristina, Process View and Cost Management of a New Surgery Technique in Hospital (September 7, 2007). Business Process Management Journal Vol. 15, No. 6, pp. 895-919, 2009 , Available at SSRN: https://ssrn.com/abstract=1012872

Lino Cinquini (Contact Author)

Scuola Superiore Sant'Anna- Institute of Management ( email )

Piazza Martiri della Libertà, 24
Pisa, 56124
Italy
+39 050 883969 (Phone)
+39 050 883936 (Fax)

HOME PAGE: http://www.idm.sssup.it/cinquini/

Paola Miolo Vitali

University of Pisa ( email )

Lungarno Pacinotti, 43
Pisa PI, 56126
Italy

Arianna Pitzalis

University of Pisa ( email )

Lungarno Pacinotti, 43
Pisa PI, 56126
Italy

Cristina Campanale

Scuola Superiore Sant'Anna di Pisa ( email )

Biblioteca Scuola Superiore Sant'Anna
Piazza Martiri della Liberta, n. 33
Pisa, 56127
Italy

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