©2009 Yardley Management Solutions, Inc.

Background

Activity Based Costing (ABC) began appearing as a costing methodology in industries other than healthcare in the 1990’s. Since then ABC has continued to evolve, now encompassing Time-Driven ABC and Activity-Based Management (ABM).  Many healthcare executives continue to ask how ABC can be applied in healthcare and how it relates to existing costing methods. Some hope it can offer a breakthrough or at least advantages over current methods, which are perceived variously as inaccurate or too costly to build and maintain.