Developing a Continuous Improvement Costing System in a Medical Center's Microbiology Laboratory

National health insurance policy has been developed toward prospective payment systems these years. The financial risk has been gradually transferred to those who provide health care. Under these harsh circumstances, hospitals also have to offer patients high quality care. Thus, hospital managers request every department to control cost and keep improving quality as well as possible. The microbiology laboratory is the work unit which more relates to the production way of job-shop. Comparing it to other departments, it consumes a large amount of manpower on cultivating microorganisms. The results coming up with bacteria or no bacteria affect not only the cure way on diseases of patients but also the consumption of resources.
For years, most hospitals used the traditional cost accounting system which emphasized on differentiating department profits rather than analyzing working process. ABC/M（activity-based costing and management）system however put emphases on the view of process. It lets managers understand the flow of costs and the improvement opportunities of process by analyzing activities in the process. Thus, this study tried to construct a cost management system which is able to provide improvement opportunities of process and activities by means of ABC/M application. It took an clinical laboratory department as the subject and tried to advance its cost management.
This is a case study. The subject of the study was a microbiology laboratory of a medical center in Taipei. The data were collected from the accounting report of 2000 of the hospital and the total amount of specimens received in the laboratory. This hospital contained about 800 beds with an occupied rate of 90%. The research method was applying the framework of ABC/M to analyze the microbiology laboratory operation activities and the related costs. Based on the ABC/M principles, 7 activities were defined in the laboratory.
The results show that while reagents and materials accounted for 57.5% of the total cost, labor and allocated overhead accounted for 39.2% and 3%, respectively. As for activity cost, specimen culture and bacteria identification activities consumed the major portion of the total cost at 51% and 27%. Antibiotic susceptibility testing, administrating and preparing, teaching and research, quality control, and fungal identification were all less than 10%. We also obtained the total costs and every single test cost of different kind specimens respectively, including revenue, costs, and gross profits. Through analyzing the cost information and standard operating procedures of the laboratory, we found the failure cost because of improper use of blood culture and excessive resource consumption in bacteria identification（ID）procedure.
For lowering failure cost and improving ID procedure, we implemented continuous quality improvement strategies—including education training course and taking QCC action. After that, the failure cost decreased to 4.5% of the next year from 15.3% of the previous year, and saved bacteria ID cost about NT$ 90,000/y by changing Aci. baumannii ID SOP.
The conclusion of this study was to prove：first, we applied ABC/M to construct an additive cost system which can more precisely measure cost of the customized products in the microbiology laboratory. Second, by using this ABC/M system, we found the non-value-added process and help make decisions to eliminate it. Last, with the information produced by work process analysis of this system, the microbiology laboratory management can be continuously improved including reducing the failure cost, increasing the operation efficiency, adjusting laboratory testing utilization.