Estimating Cost of an Estimating Cost of an Activity: EHRActivity: EHR
Farrokh Alemi, Ph.D.Farrokh Alemi, Ph.D.
Lee Baliton Lee Baliton
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord
Purchase costPurchase cost True costTrue cost
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord Software licensesSoftware licenses Master patient indexMaster patient index Pharmacy linkPharmacy link Drug-drug interaction decision aidDrug-drug interaction decision aid Laboratory implementationLaboratory implementation Outpatient implementationOutpatient implementation HardwareHardware Network infrastructureNetwork infrastructure Yearly support and maintenanceYearly support and maintenance TrainingTraining
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord Software licensesSoftware licenses Master patient indexMaster patient index Pharmacy linkPharmacy link Drug-drug interaction decision aidDrug-drug interaction decision aid Laboratory implementationLaboratory implementation Outpatient implementationOutpatient implementation HardwareHardware Network infrastructureNetwork infrastructure Yearly support and maintenanceYearly support and maintenance TrainingTraining
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord
Cost of buildingCost of building Cost of personnelCost of personnel Cost of operationCost of operation Cost of insuranceCost of insurance Cost of management & other Cost of management & other
overheadsoverheads Cost of financingCost of financing
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord
Cost of buildingCost of building Cost of personnelCost of personnel Cost of operationCost of operation Cost of insuranceCost of insurance Cost of management & other Cost of management & other
overheadsoverheads
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord
Impact on productivityImpact on productivity
Course on Project Management
Cost of Electronic Health Cost of Electronic Health RecordRecord
Purchase costPurchase cost Economic cost Economic cost Impact on productivityImpact on productivity
Course on Project Management
True Cost Depend on Many True Cost Depend on Many FactorsFactors
Size of operationSize of operation Number of patientsNumber of patients Number of cliniciansNumber of clinicians
Location of clinicLocation of clinic Property valuesProperty values Network infrastructureNetwork infrastructure
Local area wagesLocal area wages Management of the organizationManagement of the organization
Course on Project Management
Project Manager’s Cost Project Manager’s Cost Estimation ProblemEstimation Problem
True cost are hiddenTrue cost are hidden Cost are over timeCost are over time Cost depend on many factorsCost depend on many factors Cost depend on events outside Cost depend on events outside
of organizationof organization Scope of project changes over Scope of project changes over
timetime
Course on Project Management
Project Manager’s Cost Project Manager’s Cost Estimation ProblemEstimation Problem
True cost are hiddenTrue cost are hidden Cost are over timeCost are over time Cost depend on many factorsCost depend on many factors Cost depend on events outside Cost depend on events outside
of organizationof organization Scope of project changes over Scope of project changes over
timetime
Course on Project Management
Project Manager’s Cost Project Manager’s Cost Estimation ProblemEstimation Problem
True cost are hiddenTrue cost are hidden Cost are over timeCost are over time Cost depend on many factorsCost depend on many factors Cost depend on events outside Cost depend on events outside
of organizationof organization Scope of project changes over Scope of project changes over
timetime
Course on Project Management
Project Manager’s Cost Project Manager’s Cost Estimation ProblemEstimation Problem
True cost are hiddenTrue cost are hidden Cost are over timeCost are over time Cost depend on many factorsCost depend on many factors Cost depend on events outside Cost depend on events outside
of organizationof organization Scope of project changes over Scope of project changes over
timetime
Course on Project Management
Project Manager’s Cost Project Manager’s Cost Estimation ProblemEstimation Problem
True cost are hiddenTrue cost are hidden Cost are over timeCost are over time Cost depend on many factorsCost depend on many factors Cost depend on events outside Cost depend on events outside
of organizationof organization Scope of project changes over Scope of project changes over
timetime
Course on Project Management
Approaches to Cost Approaches to Cost EstimationEstimation
Statistical analysis of cost Statistical analysis of cost across organizationsacross organizations
Unit cost for quantitiesUnit cost for quantities Bottom upBottom up
Activity Based CostingActivity Based Costing Top downTop down
Course on Project Management
Approaches to Cost Approaches to Cost EstimationEstimation
Statistical analysis of cost Statistical analysis of cost across organizationsacross organizations
Unit cost for quantitiesUnit cost for quantities Bottom upBottom up
Activity Based CostingActivity Based Costing Top downTop down
Course on Project Management
Approaches to Cost Approaches to Cost EstimationEstimation
Statistical analysis of cost Statistical analysis of cost across organizationsacross organizations
Unit cost for quantitiesUnit cost for quantities Bottom upBottom up
Activity Based CostingActivity Based Costing Top downTop down
Some costs maybe missed
Course on Project Management
Approaches to Cost Approaches to Cost EstimationEstimation
Statistical analysis of cost Statistical analysis of cost across organizationsacross organizations
Unit cost for quantitiesUnit cost for quantities Bottom upBottom up
Activity Based CostingActivity Based Costing Top downTop down
Cost of time of training personnel
.vs.Cost of time of employees
going through training
Course on Project Management
Approaches to Cost Approaches to Cost EstimationEstimation
Statistical analysis of cost Statistical analysis of cost across organizationsacross organizations
Unit cost for quantitiesUnit cost for quantities Bottom upBottom up
Activity Based CostingActivity Based Costing Top downTop down
Course on Project Management
Approaches to Cost Approaches to Cost EstimationEstimation
Statistical analysis of cost Statistical analysis of cost across organizationsacross organizations
Unit cost for quantitiesUnit cost for quantities Bottom upBottom up
Activity Based Costing (ABC)Activity Based Costing (ABC) Top downTop down
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
1500 patients/day1500 patients/day 365 days/year365 days/year $55/Hour pay for Administration$55/Hour pay for Administration 15 minutes/visit15 minutes/visit $250 reimbursement/visit$250 reimbursement/visit
Cost of an EHR Depends on Size of the Operations
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Based on Calaudine Beron’s lecture in 2007
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
A lot is missing
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Building cost
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Over head cost
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Management cost
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Vacation time
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Retirement benefits
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5
Internet/Network 212,000 17,667 8,833 5,889 4,417 3,533
Software 200,000 16,667 8,333 5,556 4,167 3,333
Hardware 425,000 17,708 17,708 11,806 8,854 7,083
Implementation 652,000 27,167 27,167 18,111 13,583 10,867
Maintenance 15,000 625 625 417 313 250
Training 200,000 8,333 8,333 5,556 4,167 3,333
Total cost 1,492,000 88,167 70,999 47,335 35,501 28,399
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Jac ValancyJac Valancy Family physician clinicFamily physician clinic
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
Hardware DescriptionInitial Unit
cost QuantityYear
1Years
2-5
Servers Main server $12,324 1 $1,107 $1,476
Backup server $11,874 1 $1,071 $1,428
Data storage RAID array $3,523 1 $315 $420
Data backup DAT drive and cartridges
$2,155 1 $0 $2,580
Input devices Desktop computers $987 6
Laptop computers $1,582 3 $282 $564
Printers Laser $1,545 1
Inkjet $359 2
Other Scanner $250 1
Network Router & switches $2,587 1
Cable installation $1,500 1
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
HardwareDescription
Initial Unit cost Quantity
Year 1
Years 2-5
Servers Main server $12,324 1 $1,107 $1,476
Backup server $11,874 1 $1,071 $1,428
Data storage RAID array $3,523 1 $315 $420
Data backup DAT drive and cartridges $2,155 1 $0 $2,580
Input devices Desktop computers $987 6
Laptop computers $1,582 3 $282 $564
Printers Laser $1,545 1
Inkjet $359 2
Other Scanner $250 1
Network Router & switches $2,587 1
Cable installation $1,500 1
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
Software DescriptionInitial
Unit cost Quantity Year 1Years
2-5
Operating system Unix $249 1 $0 $288
Applications EMR application $12,000 1 $720 $1,440
Interface modules $2,000 2
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
DescriptionInitial
Unit cost Quantity Year 1Years
2-5
Training Staff travel $500 2
Interface(s) Vendor time $50 16
Ongoing data entry Scan in data from other sources
$8 500 $2,000 $2,000
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
Initial Year 1 Year 2 Year 3 Year 4 Year 5
Date paid 01/01/02 07/01/02 07/01/03 07/01/04 07/01/05 07/01/06
Amount $71,020 $7,283 $11,984 $11,984 $11,984 $11,984
Course on Project Management
Example of Unit Cost of Example of Unit Cost of QuantitiesQuantities
How Much Will That EMR System Really Cost? By Jack Valancy, MBA
Initial Year 1 Year 2 Year 3 Year 4 Year 5
Date paid 01/01/02 07/01/02 07/01/03 07/01/04 07/01/05 07/01/06
Amount $71,020 $7,283 $11,984 $11,984 $11,984 $11,984
Net Present Value$73,973
Course on Project Management
Is this cost analysis accurate?Is this cost analysis accurate?
YesYes NoNo
Course on Project Management
Is this cost analysis accurate?Is this cost analysis accurate?
YesYes NoNo
Course on Project Management
Is this cost analysis accurate?Is this cost analysis accurate?
YesYes NoNo
We cannot always be active, sometimes we have to be idle to get ready for next task.
Course on Project Management
Is this cost analysis accurate?Is this cost analysis accurate?
YesYes NoNo
Time before and after a call
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
Top downTop down Includes costs typically missedIncludes costs typically missed
No showNo show VacationVacation Retirement benefitsRetirement benefits
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting
240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Adapted from Schuneman P. Master the 'ABCs' of Activity-Based Costing MANAGED CARE May 1997. ©1997 Stezzi Communications
Sa
laries
Course on Project Management
Example of Activity Based Example of Activity Based CostingCosting 240 200 760
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Pay Adm $1,000 $119 $39 $337 $254 $251
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $200 $25 $25 $50 $50 $50
Office supplies $300 $100 $100 $100
Insurance $100 $12 $13 $25 $25 $25
Telephone $600 $200 $200 $200
Equipment $300 $100 $100 $100
Cost per visit 1111 1111 33
Sa
laries
Course on Project Management
230 190 600
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Admin $333 $40 $13 $112 $85 $83
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $220 $25 $25 $50 $50 $70
Office supplies $100 $33 $33 $34
Building insurance $100 $12 $13 $25 $25 $25
Telephone $700 $200 $200 $300
Equipment $1,300 $200 $400 $700
Cost per visit $10 $12 $4
Example of Activity Based Example of Activity Based CostingCosting
Sa
laries
Course on Project Management
230 190 600
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Admin $333 $40 $13 $112 $85 $83
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $220 $25 $25 $50 $50 $70
Office supplies $100 $33 $33 $34
Building insurance $100 $12 $13 $25 $25 $25
Telephone $700 $200 $200 $300
Equipment $1,300 $200 $400 $700
Cost per visit $10 $12 $4
Example of Activity Based Example of Activity Based CostingCosting
Sa
laries
Course on Project Management
230 190 600
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Admin $333 $40 $13 $112 $85 $83
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $220 $25 $25 $50 $50 $70
Office supplies $100 $33 $33 $34
Building insurance $100 $12 $13 $25 $25 $25
Telephone $700 $200 $200 $300
Equipment $1,300 $200 $400 $700
Cost per visit $10 $12 $4
Example of Activity Based Example of Activity Based CostingCosting
Sa
laries
A cost saving
of $1/visit
Course on Project Management
230 190 600
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Admin $333 $40 $13 $112 $85 $83
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $220 $25 $25 $50 $50 $70
Office supplies $100 $33 $33 $34
Building insurance $100 $12 $13 $25 $25 $25
Telephone $700 $200 $200 $300
Equipment $1,300 $200 $400 $700
Cost per visit $10 $12 $4
Example of Activity Based Example of Activity Based CostingCosting
Sa
laries
A cost increase
of $1/visit
Course on Project Management
230 190 600
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Admin $333 $40 $13 $112 $85 $83
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $220 $25 $25 $50 $50 $70
Office supplies $100 $33 $33 $34
Building insurance $100 $12 $13 $25 $25 $25
Telephone $700 $200 $200 $300
Equipment $1,300 $200 $400 $700
Cost per visit $10 $12 $4
Example of Activity Based Example of Activity Based CostingCosting
Sa
laries
A cost increase
of $1/visit
Course on Project Management
230 190 600
Visits Visits Visits
Laboratory Radiology Dr. A Dr. B Dr. C
Direct $1,500 $600 $500 $400
Payroll Admin $333 $40 $13 $112 $85 $83
Supervision $2,000 $238 $79 $673 $508 $502
Advertising $600 $200 $200 $200
Rent $1,000 $125 $125 $250 $250 $250
Utilities $220 $25 $25 $50 $50 $70
Office supplies $100 $33 $33 $34
Building insurance $100 $12 $13 $25 $25 $25
Telephone $700 $200 $200 $300
Equipment $1,300 $200 $400 $700
Cost per visit $10 $12 $4
Example of Activity Based Example of Activity Based CostingCosting
Sa
laries
Accounts for all costsShows impact of volume changes
Take Home LessonTake Home Lesson
Activity Based Costing is an effective Activity Based Costing is an effective method of monitoring cost of electronic method of monitoring cost of electronic
health recordshealth records