Cost calculation of a tertiary care referral dental center using activity-based costing method: A case study

• Main Authors: Vadde Venkata Naga Sunil (Author), Koneru Mrunalini (Author), Vedati Prathima (Author)
• Format: Book
• Published: Wolters Kluwer Medknow Publications, 2022-01-01T00:00:00Z.
• Subjects: article
• Online Access: Connect to this object online.
• Notes: 2319-5932; 2350-0484; 10.4103/jiaphd.jiaphd_213_20
• Keywords: activity-based costing; dental health care costs; human capital; operating cost; patient's perspective care; unit cost; Dentistry; RK1-715
• Source: Journal of Indian Association of Public Health Dentistry, Vol 20, Iss 2, Pp 168-173 (2022)

Background: Economic evaluations in dentistry provide policymakers with information to facilitate efficient resource allocation. Dentistry involves multiple activities for one treatment outcome. This original research aims to calculate direct treatment and indirect costs for dental services provided at tertiary care referral dental center. Materials and Methods: The present original study reporting is done based on using the Consolidated Health Economic Evaluation Reporting Standards statement in dentistry, the basic dental services provided are divided into direct (revenue-generating) and indirect cost centers (nonrevenue generating) using activity-based costing (ABC) method. The total cost generated is calculated by aggregating the sum of direct and indirect cost incurred and unit cost is calculated by dividing total cost obtained by the number of units. Data are analyzed using Microsoft Excel worksheet. Results: Cost calculated using ABC method differed significantly from the tariff method. The major cost components varied are human resources (848,000 INR), capital costs (3,008,500 INR), and material costs (200,000 INR). Conclusion: At a tertiary care dental hospital level, we must provide patient's perspective care that is respectful of and responsive to individual patient preferences, needs, and values and ensuring that patient values guide all clinical decisions. By taking correct economic managerial decisions using ABC and budgeting the resources to dental services, the community can approach with true patient costs at an acceptable level of quality and at the least possible cost.