Cost

See the presentation below, or download it as a pdf 07-05-31 ActivityBasedCosting.pdf

Creating robust and accurate cost information for all providers is challenging for a number of reasons

• Providers may have very different cost structures and operating models
• Some providers may already have very good systems, while others have little
• The costing system is likely to mature and improve over time
• It is generally time-consuming to introduce activity-based costing

To use costing information for pricing decisions, the Health Authority would probably want

• comparable cost information from all providers
• a system that accommodates both poor costing systems as well as very advanced systems
  a built-in learning mechanism, so the quality of the information can improve over time, while the system structure stays the same.
   

When Germany introduced DRGs they developed a costing methodology that meets these specifications.

The core idea -- adapted to the Abu Dhabi context --  is relatively straightforward and outlined below

The next few charts provide additional detail on each of the steps