Using time-driven activity-based costing to establish a tariff system for home health care services

The most important societal challenge is aging, often associated with chronic disease and increased multimorbidity; nevertheless, the costs of an aging society will not be sustainable in terms of healthcare and social services. In late 2011, the regional government of Campania, Italy, launched a study with the aim of implementing a tariff system for the provision of home and palliative care services. To create the tariff system, the regional government set up two working groups: one to identify home and palliative care profiles and the other to propose a tariff system for home and palliative care based on the profiles identified. The second group analyzed the average resources absorbed by each of the care profiles identified using a time-driven activity-based costing (TDABC) system. This study has two distinguishing features: (1) its use to establish a system of tariffs related to services provided over a particular time frame in an individualized care plan, and (2) the method of calculating the daily cost of care (i.e., the cost of a standard day, including access to all healthcare professionals required to care for the patient at home). The authors identified a prospective tariff system based on the average amount of total resources absorbed according to the different levels of care complexity rather than on historical costs. Although the study pertains to an Italian region, it highlights a methodology that can be applied in other countries