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Keywords

 

Authors

  1. Lee, Robert H. PhD
  2. Bott, Marjorie J. PhD, RN
  3. Forbes, Sarah PhD, RN
  4. Redford, Linda PhD, RN
  5. Swagerty, Daniel L. MD, MPH
  6. Taunton, Roma Lee PhD, RN, FAAN

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.