Time-Driven Activity-Based Costing

Conventional hospital costing methods are described as poorly suited to decentralized and cross-sectoral care models. Guidance on applying micro-costing to municipal-level or cross-sectoral services is scarce. Overheads, breaks, and non-patient administration are excluded from direct measurement and will be incorporated during TDABC tariff construction via capacity cost rates derived from contractual hours and utilisation assumptions. Micro-costing involves direct measurement of activities, time, and material use through structured logs and is the recommended method for new and complex interventions where resource use is uncertain. TDABC maps care processes, measures time and resources for activities, and links activities to capacity cost rates. Treating zero values as true non-use rather than missing data avoids a common source of bias in resource-use analyses. The study used time-driven activity-based costing combined with microcosting to calculate visit-level Hospital at Home tariffs. This pilot executed only the identification and measurement stages of micro-costing; price assignment and cost estimation are deferred to subsequent work. Requiring staff to record time for each i…