Asante Teaching Hospital: Activity-Based Costing Custom Case Solution & Analysis

1. Evidence Brief: Asante Teaching Hospital (ATH)

Financial Metrics

• NHIS Reimbursement Gap: The National Health Insurance Scheme (NHIS) provides fixed-rate reimbursements for deliveries. Preliminary data suggests these rates do not cover the actual resource consumption of tertiary-level care (Exhibit 1).
• Personnel Costs: Staff salaries represent the largest fixed cost component. Capacity Cost Rates (CCR) for senior specialists are significantly higher than those for midwives and junior nurses (Exhibit 4).
• Supply Costs: Medical consumables for C-sections are estimated to be 3x higher than vaginal deliveries, yet reimbursement does not scale proportionally with complication levels (Paragraph 12).
• Resource Utilization: The maternity ward operates at over 100% bed occupancy during peak periods, leading to hidden costs in emergency staffing and rapid turnover (Paragraph 8).

Operational Facts

• Process Stages: The delivery process is mapped into five distinct phases: Admission, Labor/Triage, Delivery (Vaginal or C-section), Recovery, and Discharge (Exhibit 2).
• Staffing Mix: The unit relies on a mix of specialists, medical officers, midwives, and ward assistants. Midwives handle 85% of uncomplicated vaginal deliveries (Paragraph 14).
• Facility Constraints: ATH serves as a referral hospital, meaning it receives the most complex cases in the region, which naturally require more time and higher-skilled intervention than primary care centers (Paragraph 5).
• Data Collection: Time-tracking was conducted via direct observation and staff interviews to estimate the minutes spent per activity (Exhibit 3).

Stakeholder Positions

• Dr. Srofenyoh (Medical Director): Advocates for TDABC to provide the granular data necessary for internal efficiency and external negotiation with the Ministry of Health (Paragraph 3).
• Finance Department: Focused on the sustainability of the maternity ward, which is currently a cost center threatening the hospital's overall solvency (Paragraph 7).
• Midwives and Nursing Staff: Expressed concern regarding the administrative burden of time-tracking and fear that the data might be used for punitive performance monitoring (Paragraph 18).
• NHIS Administrators: Maintain a fixed-tariff structure based on national averages, largely ignoring the higher cost-base of teaching hospitals (Paragraph 20).

Information Gaps

• Drug Wastage: Precise data on pharmaceutical shrinkage or expiration within the ward is not captured in the current TDABC model.
• Indirect Overheads: The allocation of hospital-wide administrative costs (utilities, security, IT) to the maternity unit remains based on arbitrary floor-space percentages rather than actual consumption.
• Complication Variance: The time data reflects average cases; the standard deviation for emergency interventions is not statistically mapped.

2. Strategic Analysis

Core Strategic Question

• How can Asante Teaching Hospital utilize Time-Driven Activity-Based Costing (TDABC) to bridge the deficit between NHIS reimbursements and actual delivery costs while optimizing internal resource allocation?

Structural Analysis

• Value Chain Analysis: The primary value drivers are clinical expertise and specialized facilities. However, value is destroyed at the Admission and Discharge stages due to administrative bottlenecks that keep beds occupied longer than medically necessary.
• TDABC Framework: Applying CCR reveals that senior specialists are frequently performing tasks that could be delegated to midwives. This creates an expensive "skill-task mismatch" where the hospital pays specialist rates for routine monitoring.
• Resource Capacity: The analysis shows that while the ward is physically overcrowded, staff "idle time" exists during off-peak hours, suggesting that the problem is not a lack of staff but a lack of synchronized scheduling.

Strategic Options

Preliminary Recommendation

ATH should pursue Option 2 (Operational Task Shifting) immediately while using the resulting data for Option 1. The TDABC analysis confirms that the hospital cannot control NHIS rates in the short term, but it can control its internal cost of service. By reassigning routine monitoring from specialists to midwives, the hospital reduces its Capacity Cost Rate per delivery, moving closer to the NHIS reimbursement ceiling.

3. Operations and Implementation Planner

Critical Path

• Month 1: Data Validation: Re-verify the time-motion studies with staff to ensure buy-in and accuracy of the "Actual Time" vs. "Estimated Time" gap.
• Month 2: Capacity Cost Rate Refinement: Calculate the final CCR for every staff grade, including benefits and auxiliary support costs.
• Month 3: Care Map Redesign: Standardize the delivery process to shift specific low-risk tasks from doctors to midwives.
• Month 4: Pilot Implementation: Run the new care map for 30 days in one wing of the maternity ward.
• Month 5: Financial Comparison: Compare the cost per delivery under the new model against the baseline TDABC data.

Key Constraints

• Staff Resistance: Midwives may resist increased responsibility without salary adjustments, and specialists may view task-shifting as a loss of authority.
• Information Systems: ATH lacks an automated EHR to track time in real-time; manual data entry is prone to error and fatigue.
• Fixed NHIS Tariffs: Internal efficiency only solves half the problem; if the cost remains above the tariff even after optimization, the unit remains fundamentally unprofitable.

Risk-Adjusted Implementation Strategy

The implementation will utilize a phased rollout to mitigate operational friction. Instead of a hospital-wide mandate, the task-shifting will begin with the Discharge process—the least clinical but most time-consuming bottleneck. This provides a quick win by freeing up bed capacity without initially disrupting high-stakes delivery room protocols. Contingency funds must be set aside for overtime pay during the transition period to prevent staff burnout during the process redesign.

4. Executive Review and BLUF

BLUF

Asante Teaching Hospital must adopt TDABC as its primary financial management tool to survive the current NHIS reimbursement crisis. The analysis proves that ATH is losing money on every standard delivery because its resource-intensive teaching model is being reimbursed at primary-care rates. The path forward requires an immediate shift of routine clinical tasks from high-cost specialists to midwives, reducing the internal cost of care by an estimated 14-18%. Without this operational correction, no amount of lobbying will make the maternity ward solvent. Implementation must focus on throughput and task-shifting to align actual costs with the fixed revenue environment.

Dangerous Assumption

The single most dangerous assumption is that the NHIS will increase reimbursement rates once presented with TDABC data. The Ghanaian healthcare budget is constrained by macro-economic factors; data-driven evidence of a deficit does not guarantee the availability of funds to close it. ATH must prepare for a scenario where rates remain frozen.

Unaddressed Risks

• Quality Erosion (High Probability, High Consequence): Task-shifting to midwives may lead to missed complications if supervision protocols for specialists are not strictly enforced.
• Data Obsolescence (Medium Probability, Medium Consequence): Inflation in Ghana is volatile. The CCR calculated today for medical supplies and energy will be inaccurate within six months, requiring a dynamic rather than static costing model.

Unconsidered Alternative

The team failed to consider a Private-Tier Service Wing. By creating a premium maternity track for self-paying patients, ATH could cross-subsidize the deficit generated by NHIS patients. This uses the hospital's reputation as a teaching center to capture high-margin revenue without requiring a change in national policy.

Verdict

APPROVED FOR LEADERSHIP REVIEW