Process-based costing. Journal Articles uri icon

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abstract

  • Understanding how quality improvement affects costs is important. Unfortunately, low-cost, reliable ways of measuring direct costs are scarce. This article builds on the principles of process improvement to develop a costing strategy that meets both criteria. Process-based costing has 4 steps: developing a flowchart, estimating resource use, valuing resources, and calculating direct costs. To illustrate the technique, this article uses it to cost the care planning process in 3 long-term care facilities. We conclude that process-based costing is easy to implement; generates reliable, valid data; and allows nursing managers to assess the costs of new or modified processes.

authors

  • Lee, Robert H
  • Bott, Marjorie J
  • Forbes, Shawn
  • Redford, Linda
  • Swagerty, Daniel L
  • Taunton, Roma Lee

publication date

  • 2003