Current Trends of Application of The Activity Based Costing System Method in Hospitals; A Review
The purpose of this literature review is to review how the application of inpatient service rates using the Activity Based Costing system. Activity-based costing (ABC) is a method for determining actual costs. Although ABC is a relatively new innovation in cost accounting, it is quickly being adopted by companies in many industries, within governments, and other organizations. Given current practice, this paper emphasizes understanding the needs and the importance of ABC costs in the organization. The literature review method used is to analyze literature selected from several sources so that it becomes a conclusion and becomes a new idea. The results of research-based journals are the Activity Based Costing system has proven its effectiveness and efficiency which makes some hospitals that still use traditional calculations switch to using this system Because determining the rate of special inpatient services, is done by tracing activities that consume inpatient resources in the hospital and making it easier to calculate the comparison of activity details so that the level of accuracy is almost never wrong.
The main task of the hospital is to provide treatment, treatment, and health services. In health services, hospitals earn income from the income of services and facilities provided, one of which is inpatient services, where the income for inpatient services is obtained from the rates to be paid by inpatient service users. Determining the rate of inpatient services is a very important decision because it can affect the profitability of a hospital (Politon, 2019).
Many hospitals in determining the price of hospitalization rates still use traditional cost accounting methods, where the system is not in accordance with the current advanced financing system. Traditional methods are less accurately used in determining inpatient rates because they only focus on presenting financial information in the form of costs incurred at the stage of patient care, while in the management of inpatient services, information is needed about the causes of costs in the form of activities. The existence of complete information about the activities that cause costs can affect the amount of hospitalization rates. The calculation of traditional methods is no longer relevant if applied today because it still does not provide a precise and accurate picture. The ABC method provides insight as to whether services provide enough value to customers and can serve as a roadmap to decide where strategic assets should be deployed. In health care, this is often based on services associated with patient care, which can be procedural or time-based. These include indirect costs, such as overhead expenses, and also direct costs associated with a given clinical or business entity, such as costs attributed to a given procedure from the expenses of the operating room.
Based on the above conditions, hospitals are required to be able to utilize technology and experts and medical personnel in the fields of health, the fields of communication, information, and transportation that support health service services so that the hospital is able to provide good health services. The use of these various technologies and experts makes the operational costs incurred by Rumah Sakti become large which will have an impact on high hospitalization rates, to control these costs, the hospital needs the right accounting system, especially the method of calculating inpatient service rates to produce accurate cost information related to the cost-of-service activities (Pelo, 2012).
So that the Activity Based Costing System is a cost planning method designed to predict the inherent weaknesses of traditional cost accounting systems (Kindangen et al., 2018). Therefore, according to (Siby et al., 2018) the Activity Based Costing system provides better cost information, management manages the business efficiently and better understands the strengths, weaknesses, and strengths of the business.
So, the purpose of this study is to find out how the implementation of the Activity Based Costing method on inpatient service rates when using the calculation of the Activity Based Costing method in hospitals. So, it is hoped that this research can be useful for hospitals, which can contribute in the form of information related to the application of the Activity Based Costing method in an effort to determine cost rates in inpatient units.
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