Business Process Management Journal

An activity-based costing approach for detecting inefficiencies of healthcare

processes
Lorella Cannavacciuolo Maddalena Illario Adelaide Ippolito Cristina Ponsiglione
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An activity-based costing Detecting

inefficiencies
approach for detecting of healthcare
processes
inefficiencies of healthcare
processes 55
Received 25 November 2013
Lorella Cannavacciuolo Revised 28 February 2014
Department of Industrial Engineering, University of Naples Federico II, Accepted 17 March 2014
Naples, Italy
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Maddalena Illario
Translational Medical Sciences, University of Naples Federico II, Naples, Italy
Adelaide Ippolito
Research and Development Board, Federico II University, Naples, Italy, and
Cristina Ponsiglione
Department of Industrial Engineering, Federico II University, Naples, Italy

Abstract
Purpose – The purpose of this paper is to set out a methodological framework to investigate how the
integration of an activity-based costing (ABC) logic into the pre-existent accounting system supports
healthcare organizations in identifying the inefficiencies related to their diagnostic therapeutic
pathways (DTP) and related reengineering interventions.
Design/methodology/approach – The BPM-ABC methodological framework has been applied to
the case of a specific surgery pathway, at the Orthopaedic Division of a University Hospital in Italy.
Findings – The case-study described in the paper points out: first, how the Business Process
Management (BPM)-ABC methodology is able to produce significant information about consumed
resources and the costs of the activities, useful to highlight opportunities for DTPs improvement;
second, the barriers related to a pre-existing accounting system based on cost centres that can hinder
the implementation of the BPM-ABC model.
Practical implications – The case study points out the role of the ABC as a management tool for
supporting decision-making processes. The ABC allows inferring information for two purposes. First,
ABC supports a cost containment process as it allows highlighting the most cost-consuming activities
and resources. Second, the ABC allows identifying reengineering paths, distinguishing between
incremental and radical ones.
Originality/value – This study represents a remarkable reference raising the awareness of the
pivotal role accounting systems play in the management of the organizational processes.
Keywords Case studies, Healthcare, Activity-based costing, Business process reengineering
Paper type Case study

1. Introduction
The achievement of relevant and accurate cost information to ground the decisions
concerning strategy, pricing and management is a fundamental issue for policy makers
who face hospital financing and reimbursement problems, for hospital administrators
Business Process Management
who pursue internal cost management purposes, and for health policy scholars Journal
(Cardinaels et al., 2004; Gil and Hartmann, 2007; Eldenburg and Krishan, 1997; Vol. 21 No. 1, 2015
pp. 55-79
Pettersen, 2001; Hovenga, 1996). This premise implies the critical role of the design and © Emerald Group Publishing Limited
1463-7154
implementation of cost accounting systems in healthcare organizations. DOI 10.1108/BPMJ-11-2013-0144
 BPMJ The literature outlines the increasing investment in sophisticated cost-accounting
21,1 tools and systems in healthcare organizations, such as activity-based costing (ABC)
(Ross, 2004; Cappetini et al., 1998; Chan, 1993; Udpa, 1996). Furthermore, a growing
amount of information on the use of ABC in detecting the costs related to the
inefficiencies of organizational and productive processes is available (Krug et al., 2009;
Arnaboldi and Lapsley, 2005; Carolfi, 1996, Udpa, 1996; Canby, 1995; Ramsey, 1994;
56 Baird, 2007). The ABC is particularly well suited in healthcare organizations to
compare the reimbursement tariff with the sustained costs of different health services.
In several countries (e.g. Australia, USA, Switzerland, Spain, Italy) healthcare
organizations currently apply the Diagnosis Related Groups (DRG) reimbursement
system to fund hospital activities (Blein et al., 2006). The general idea behind the use of
the DRG system is that diagnoses with similar therapeutic protocols engage similar
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resources (Blein et al., 2006; Fetter and Freeman, 1986). Each DRG is characterized by a
standard unit price representing the reimbursement that is provided by the National
Health System for the healthcare services. The healthcare service comparable to the
DRGs included in the reimbursement system is defined as Diagnostic-Therapeutic
Pathway (DTP) (Lega, 1997). A DTP identifies all the services needed to diagnose and
treat a specific disease from the first access of the patient into the healthcare system.
The systematic adoption of DTPs in healthcare organizations fosters the
implementation of a managerial perspective based on processes, with obvious
positive effects on the efficiency of the organizations (Rohner, 2012; Benyoucef et al.,
2011; Snyder et al., 2005). The ABC allows managers to have proper data on the amount
of resources used by each activity included in the DTP and on the overall costs of the
DTP. The cost information of each DTP is essential for the financial stability of a
healthcare institution. If the organization does not have accurate cost information,
it is at financial risk when making decisions regarding current operations as well as
long-term plans. In addition, more precise cost information allows managers to
redesign the DTP to make it more adequate to clinical purposes ( Jacobs et al., 2004).
According to the aforementioned literature, the ABC has a fundamental role in cost
accounting systems as it can detect inefficiencies in performing DTPs and,
consequently, it could suggest interventions for process improvements (Englund and
Gerdin, 2008; Malmi and Granlund, 2009).
This paper aims at contributing to the literature on the use and implementation of
ABC in healthcare organizations, exploring, in particular, the benefits that the adoption
of the ABC could produce in terms of valuable information for processes management.
A case study will be presented and discussed in order to outline how the use of ABC
could integrate the information produced by pre-existent accounting-informative
systems in order to support improvement or reengineering interventions on healthcare
delivery processes.
The remainder of this paper is organized as follows. Section 2 offers a review of the
literature relating to the relevance of ABC for healthcare organizations. Section 2
outlines that the implementation of ABC could imply not only a precise cost assessment
of healthcare processes, but also the availability of relevant information
complementing processes’ performance measures, thus contributing to an effective
management of organizational processes according to the continuous improvement
perspective. Furthermore, a short review of the barriers encountered in the adoption of
ABC is presented. Section 3 describes the methodological framework adopted to apply
the ABC technique on a DTP and shortly the case study’s design. Section 4 illustrates
the case under investigation. Section 5 reports the results of the case study and
 discusses some implications for practice. Finally, conclusions and directions for the Detecting
further research are presented in Section 6. inefficiencies
of healthcare
2. Background processes
The relevance of ABC for healthcare organizations is well highlighted in the literature
stream of process reengineering. Snyder et al. (2005) outline that health system should
be oriented to promote continuous improvements, using effectively the information in 57
order to monitor costs and quality of care.
Several are the benefits related to the implementation of ABC:
• promotion of initiatives for cost reduction though the identification of value
added and non-value added activities (Brimson and Antos, 1994);
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• a better awareness of accountants on how the service works, providing visibility

on where and why the costs arise (Kirton and Hazlehurst, 1991); and
• supporting “what if” analyses, providing a good guide to managers in
decision-making processes (Williamson, 1988).
ABC is also a useful tool for improving accounting performance measures in a process
perspective (Kohlbacher, 2010). In their literature review on process orientation,
Kohlbacher and Gruenward (2011) claim that one of key dimensions of the process
orientation is related to process performance measurements and, concerning cost
performance, they suggest the use of ABC to capture costs horizontally in line with
business processes.
In an international comparative study, Jacobs et al. (2004) showed that clinical
professionals are sensitive to cost and performance information, even if the level of
access to such information is not always adequate. This kind of information is
perceived as inadequate since it has been designed according to corporate and
regulatory organizational requirements rather than to support clinical performance.
Another study (Pizzini, 2006) proved that healthcare managers are convinced that the
usefulness of cost information is directly proportional to the availability of details,
and that, if properly managed, it can help professionals to improve their performance.
The above studies suggest the importance of designing and implementing refined
and innovative costing systems in healthcare, in order to increase the effectiveness of
accounting information in hospitals, apart from the assessment of the economic effect
of processes and activities.
The purpose of this paper is to explore more in depth the benefits coming from the
use of ABC not only as a costing technique, but also as a structured method to produce
valuable measurements of processes performances (the ABC can contribute to enhance
the accuracy and he interpretative power of economic performance indicators). To this
aim a single exploratory-pilot case study will be presented and discussed, referring to
the implementation of the ABC in an Italian healthcare organization.
In Italy, hospitals are remunerated through a DRGs system. DRGs are set by
regional governments (according to indications provided at ministerial level) and
periodically reviewed. This remuneration system gave rise in the last decade to
a remarkable attention towards the benefits coming from the implementation of ABC,
even if the experience of ABC (some of the applications of ABC in Italian healthcare
organizations are reviewed in Cinquini et al., 2009) is limited to individual cases of
experimentation. Furthermore, since 2013 regional governments have been requested
(according to the ministerial decree 68/2011) to define standard costs and standard
 BPMJ requirements for health sector, in order to ensure a gradual and final overcoming of the
21,1 allocation criteria laid down by Law 662/1996. These costs will represent the reference
standard requirements for funding regional health organizations; as a consequence,
a larger implementation of ABC in Italian healthcare structures is expected in the next
future.
One of the reasons why the ABC is not currently implemented in healthcare
58 structures is that the implementation of ABC requests to overcome a set of cultural,
organizational and technical barriers (Duh et al., 2009; Waters et al., 2001; Lee and
Mahenthiran, 1994). Cultural obstacles are usually related to the lack of (Baird et al.,
2004, 2007; O’Reilly et al., 1991; Velmurugan, 2010; Nair, 2002): outcome orientation,
culture of change, innovation orientation, accuracy on control of activities and costs.
In healthcare organizations cultural barriers are strictly related to the strong
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professional autonomy of physicians, which makes them distrustful towards the

managerial tools aimed at controlling and driving clinical decisions. This behaviour, of
course, influences the way in which clinical staff perceives cost management and
activity information ( Jacobs et al., 2004). In particular, this occurs in those healthcare
organizations in which a cost-accounting system based on cost centres is already
implemented. In this case some difficulties arise due to the need for the coexistence of
two different accounting logics, one focused exclusively on the analysis of the costs
allocated to the various accountability units and cost centres, and the other focused on
the analysis of the costs of healthcare services and processes. The coexistence of the
two logics within the same organization is a critical aspect in the management of
healthcare organizations, since it is requested to manage the accounting information for
different purposes. The accounting logic based on cost centres gathers information on
costs of each cost centre (cost centres correspond to organizational units in most cases).
This information is useful for managers to control costs emerged in the organizational
units. Otherwise, the organizational units perform activities that are absorbed by
health services in different ways. The accounting logic based on activities allows to
allocate the costs to healthcare services in a more precise manner through the
computation of the cost of activities absorbed by healthcare services. The accounting
logic based on activities is, therefore, the most suitable for computing the cost of DTPs
and to compare it with the corresponding DRG tariff. The coexistence of these two
accounting logics imply the implementation and management of an accounting system
able to switch from a focus on cost centres to a focus on the activities. The
implementation of this system requires overcoming organizational and technical
barriers. Organizational barriers are related to the functional structure of healthcare
organizations, and to their intrinsic complexity, which entails to consider the
organizational unit as a black box. This complexity is also generated by the presence of
distinct teams characterized by different aims, interests and expertise. The barriers
concerning the technical aspects are generated by the inability of cost accounting
systems in healthcare organizations to: first, foster the effective and efficient
management of the organizational activities; second, identify the time, the place and the
drivers of resource consumption; third, elaborate and modify data in a timely manner;
fourth, exploit synergies among the expertise of different specialists; and fifth, avoid
huge cross-subsidies across services (Kaplan and Porter, 2011).
The case study presented in this paper, through a pilot application of ABC on a DTP
carried out in an Italian hospital, aims at showing which kind of information on clinical
processes the implementation of ABC can generate; furthermore, the case study
outlines some of the barriers discussed above.
 3. A methodological framework to compute the cost of a DTP Detecting
3.1 Theoretical assumptions inefficiencies
The cost accounting literature suggests the integration of the existing accounting
system based on cost centres with a proper information system that could effectively
of healthcare
support healthcare managers in the identification of where and why resources are processes
consumed (Baker, 1995; Hoyt and Colin, 1995; Jones, 1999; Canby, 1995; King et al.,
1994; Ramsey, 1994). Ramsey (1994) claims that such an integrated accounting system 59
(cost centres accounting system and coherent information system) should support
managers in using resources efficiently through an improved management of
processes. Recently, Kaplan and Porter (2011) suggested to implement the time-driven
activity-based costing (TDABC) in health organizations to overcome the poor cost
measurements which lead “the providers to misunderstand their costs” and,
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consequently, “to link costs to process improvements or outcomes, preventing them

from making systemic and sustainable cost reductions”. Based on the perspective of an
integrated accounting system and on the advantages of implementing the ABC in
healthcare organizations (TDABC is an improved version of ABC), we have designed a
methodology based on ABC technique to detect the cost of a DTP in order to make it
comparable to the corresponding DRG tariff. In order to evaluate potential profit or loss
related to a specific DTP, the concept of “minimum DTP cost” has been introduced. The
DTP cost results from the sum of activity cost pools needed to perform a DTP.
Generally, an activity cost pool is the sum of the costs in terms of human, material and
immaterial resources absorbed by an activity. On the contrary, downtime of human
resources and waste of resources are not considered in computing the minimum DTP
cost. Indeed, each human resource is allocated to the activities based on the time one
spends on them, without considering downtime.
A comparison between the minimum DTP cost and the DRG allows managers to
identify the typology of improvements (incremental vs radical) required, and the profit or
loss related to a DTP. As shown in Figure 1, if the minimum DTP cost is lower than the
corresponding DRG tariff, the organization may have a profit (area 1) or a loss (area 2).
In area 1, the DTP cost is lower than the DRG tariff. The DTP is performed in an
efficient way and improvements are not needed.
In area 2 the DTP cost is higher than the DRG tariff, despite the minimum DTP cost
being less than the DRG tariff. The DTP is not performed in an efficient way and

Minimum DTP cost Minimum DTP cost

< >
DRG tariff DRG tariff

AREA 1
PDT cost < DRG tariff
PDT is performed
Profit
in efficient way.
Improvements are
not necessary.

AREA 2 AREA 3
PDT cost > DRG tariff PDT cost > DRG tariff Figure 1.
PDT is performed PDT is performed
Loss in inefficient way. in inefficient way. Identification of
Incremental improvements Radical improvements efficient and
are necessary. are necessary. inefficient areas
 BPMJ improvements are necessary. In this case, we can suppose that the inefficiency depends
21,1 on how the DTP is carried out. A process reengineering could be sufficient to overcome
the waste and to move into the area 1. This improvement is incremental because the
waste is overcome by redesigning some phases of the process.
If the minimum DTP cost is higher than the DRG tariff, the organization suffers
a loss (area 3). Placing a DTP in this area implies that the resources considered in the
60 minimum DTP cost are higher than resources connected to therapeutic protocols
considered in the computation of the DRG tariff. In this case, managers should
make a radical rethinking of the whole process in order to change the cost structure
of it. Only radical interventions on the DTP are useful to move from the area 3 to
the area 1.
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3.2 The methodological framework

The methodological framework describes how activities of a DTP are identified, how
many cost drivers are used and how to reassemble cost information on activities and
resources to support the reengineering interventions. The methodological framework
has been articulated in two phases: “DTP Mapping” and “DTP Cost Assessment”.
To carry out these phases, we have performed a data-gathering process described in
the case study design section.
Figure 2 presents a description of the needed actions and their outputs for each
phase of the methodological framework.
The first phase maps the pathway of the patients inside the organization.
Flowcharts are used to draw the processes. The second phase computes the costs of
the activities represented in the flowchart through an ABC model. The DTP mapping
phase uses field observation and interviews to key actors as information sources to
reproduce the processes.
The DTP mapping is articulated in the steps reported in Table I. This table
summarizes the tools used and the results obtained for each step.
The output of this phase is the DTP inter-functional flowchart. It represents the
input for the following phase: DTP cost assessment. For the DTP cost assessment
phase, the information sources are: field observation, interviews to key actors and
accounting books. They all generate the inputs for specific matrixes used to identify
cost drivers.

DTP Mapping DTP Cost Assessment

Information source Tools Information source Tools

Field observation Flow charts Field observation Matrix Resource-Activities
Interviews to key actors Interviews to key actors
Account Books
Steps
a. DTP selection Steps
b. Identification of DTP activities f. Individuation of resources
c. Analytic reconstruction of DTP g. Individuation of resource costs
d. Validation of DTP reconstruction h. Individuation of cost drivers
e. DTP map assessment i. Computation of activity cost pools
Figure 2.
Methodological
framework for DTP Minimum DTP cost
assessment
DRG tariff
 DTP mapping
Detecting
Steps Tools Results inefficiencies
of healthcare
DTP Selection Interviews to experts Selection of the DTP processes
according to availability
of data and low level of
organizational complexity 61
Identification of Field observation and interviews to key actors. The Activities of DTP and
DTP activities field observation helps to triangulate information their description
from interviews. Through interviews the
researcher can obtain explanations on how
organizational unit activities are carried out
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Analytic BPM tools such as interfunctional flowcharts. Interfunctional flowchart

reconstruction of Through this tool, it is possible not only to map all of the DTP process
DTP care pathway’s activities but also to show in which
organizational unit an activity is carried out Table 1.
Validation of DTP Interview to key actors to suggest proofreading to Redesign of interfunctional DTP map: steps,
reconstruction interfunctional flowcharts flowchart of DTP tools and results

In Table II, a description of the tools and of the results are reported for each step of DTP
cost assessment. In this case study, drivers are inferred by interviews to key actors,
field observation and documents.
The output of this phase is the computation of activity cost pools, whose sum is the
minimum indirect cost of the DTP. The minimum DTP cost is obtained by adding to
the minimum indirect cost the costs of direct resources. This cost can be compared with
the DRG, and a gap analysis can be performed. The gap analysis allows managers
to identify critical areas, on which it is possible to intervene to efficiently perform the
DTP process.

3.3 Case study design

The aim of the present work is to explore the usefulness of the ABC applied to DTPs
in terms of impact on processes improvement or reengineering. To this aim a pilot
(Tellis, 1997) exploratory single case study (Yin, 1994) is performed. The case study is

DTP cost assessment

Steps Tools Results

Individuation of Interviews to key actors to identify the nature and List of indirect resources
resources the amount of resources absorbed by activities and list of direct resources.
The indirect resources are
allocated through ABC
Individuation of Involvement of planning and control staff to gather Costs of resources
resources costs the costs of resources
Individuation of Interviews to key actors, field observation, and Computation of cost
cost drivers consultation of accounting books to identify and to drivers that link resources Table 2.
compute the causal link between resources and to activities DTP cost
activities (a link that explain how the resource is assessment: steps,
consumed by the activity) tools and results
 BPMJ exploratory as the objective of research is to analyze more in depth the implications for
21,1 processes management of the application of ABC in the specific context of diagnostic
therapeutic pathways (DTP). The final aim is to identify suitable propositions to
be tested in future research. The case is a pilot case study because the ABC was
not previously applied in the context under investigation; as a consequence,
a methodological framework to apply the ABC to a specific DTP has been tested. Due to
62 the pilot character of the study and due to the time requested to design and to apply the
ABC to a DTP, a single case has been adopted.
A multidisciplinary team was assembled to design the ABC data-gathering process
as well as the interpretation phase aimed at understanding how the cost information
can support management in the analyzed context. The team was composed by three
researchers in accounting systems, one physician, and three planning and control staff
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representatives. Accounting researchers participated to the whole process while the

physician was involved in the description of the activities of the selected DTP, as well
as in the identification of the drivers. Planning and control staff provided costs and
technical information related to the consumption of resources. The research was
conducted in 2012 for a period of six months. In this period we made three observations
and analyses of the same DTP.
The multidisciplinary team selected a DTP whose activities were mainly carried
out in the same organizational unit, thus facilitating the mapping of the DTP and the
data gathering. The data-gathering process was articulated in three steps. First of
all, several interviews were carried out to break down the process into activities, and
then to record them in a flowchart. The physician identified the key people to
interview. The key people were: the nurse which manages the admission and the
opening of clinical record, the nurse which manages the stay in hospital period,
the physician involved in the anaesthesiological test, and the physician belonging
to the multidisciplinary team. Field observation helped to identify the activities.
Finally, the revision and validation of the flowchart was made by the key people
involved in the data-gathering process.
The interviews were based on unstructured questions, as their aim was to
understand the activities needed to carry out the DTP. The interviews were also useful
to obtain a thorough description of each activity. The description, in turn, helped in the
identification of cost drivers, as suggested by the techniques most commonly used.
In the second step, structured interviews were used to identify the nature and the
amount of consumed resources and the time needed to complete each activity. The
typical questions asked were “What resources are usually used to perform this
activity?” and “How long does it take to perform this activity?” − The first question
was needed to identify the resources used (i.e. human resources, maintenance,
drugs, etc.), while the second question allowed to obtain information that could not
be inferred from technical books. Instead, technical information needed to compute
drivers was gathered through interviews to the planning and control staff of the
multidisciplinary team, to the physician, and to the pharmacy employees. The process
characterizing the second step was an iterative process, aimed at identifying
information gaps, and mistakes or misinterpretations that were recorded during the
interviews. Furthermore, this step allowed the identification of proper cost drivers
explaining the causal link between resources and activities, and between activities
and cost objectives. The third step focused on collection of information on the unit
cost of resources used. This information was mainly provided by the planning and
control staff.
 4. The case study Detecting
4.1 Context description inefficiencies
The research took place in a hospital operating in the Campania region (southern Italy).
In Italy a mixed public-private system provides healthcare services for all citizens and
of healthcare
residents. The public provider is the National Health Service (under the responsibility of processes
Italian Ministry of Health). The administration of Public Healthcare System occurs
at the regional basis through Local Health Authorities and public hospitals. Local Health 63
Authorities are responsible for financial organization and management of health services
(prevention, treatment and rehabilitation) at the local level, while public hospitals
provides treatments of acute stage patients. In-patient care and general practitioner
services are free of charge, but co-payments are generally required on pharmaceuticals,
diagnostic procedures and specialist visits. The funding of Regional Health Systems is
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based on the share of the National Health Fund assigned to the region, on the balance
of interregional patients mobility, and on an additional contribution established by the
region in the regional health plan. The criteria for the distribution to providers are:
• the remuneration rate of the services provided in the case of hospitals; and
• the weighted capitation for all levels of care (with the exception of prevention,
primary care and other community care) for Local Health Authorities.
The specific context of the analysis is an Italian public large hospital (named the
hospital for privacy concern) operating in southern Italy.
The hospital actively performs national and regional programmes in several areas
(such as emergency care, primary prevention, secondary early diagnosis, tertiary of
neoplastic and chronic degenerative diseases, protection of mothers and children, liver
transplants, biotechnology research, and training). In addition, it hosts the Emergency
Department, the most important emergency department of southern Italy.
The medical and nursing care can be provided as ordinary hospitalization, day
hospital or outpatient. The reimbursement of these services is based on the DRG
system. The accounting system is based on a cost centre architecture that, coherently
with the organizational and accountability chart, is arranged in accountability centres
and cost centres (Ippolito and Viggiani, 2013). This accounting system easily provides
information on performed services, resources used, and accountability flows. The
typologies of cost centres in the hospital are the following:
• production cost centres, ordinary organizational units for admission, that
consume resources and perform services for the inpatients;
• intermediate cost centres, organizational units providing horizontal services both
for the other organizational units of the hospital, and for the outside patients
(such as outpatient activities); and
• support cost centres, organizational units that exclusively support the other
organizational units of the hospital.
Survey and data analyses are made through final statement reports, which are
elaborated every six months. These reports are developed by a centralized management
and planning control system. Reports provide information on activities and costs for cost
centres, but they do not allow to assess the degree of achievement of their aims.
This point of weakness makes it difficult to compute the cost associated to DTPs,
because the focus is on cost centres rather than on pathways. In addition, the
architecture of the cost centres determines a cultural barrier to the introduction of new
 BPMJ accounting models that affect the planning staff. Surprisingly, the physicians were
21,1 very impressed by the results of the ABC application. Both the flowcharts and the
presentation of results in graphical forms raised their enthusiasm to the novel
accounting model. Despite this interest, they do not have the power nor the role to drive
the organization into the adoption of the ABC model.

64 4.2 DTP map description

The analyzed DTP is the “total substitution of the knee” performed in the orthopaedic
unit of the hospital. The case concerns a patient in good health without any kind of
complications. The map description has been developed through both interviews to staff
and physicians, and through the direct observation of some phases of the process (except
for surgery or other delicate phases). The mapping of the whole process has been made
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following this model, starting from the admission of the patient to his discharge.
The care pathway starts with a preliminary examination at the Outpatients
Orthopaedic Department. If the patient needs surgery, he goes through a pre-surgery
examination phase. This phase is made up by of three preliminary activities:
(1) admission and opening of clinical record;
(2) blood tests; and
(3) radiographic tests.
The blood tests are carried out at the clinical laboratory, which is a different
organizational unit of the hospital. The radiographic tests are carried out at the
orthopaedic unit. Then the patient is finally admitted. During the admission, there is an
anaesthesiological test. Surgery occurs after this phase. All the materials needed for the
surgery are requested to other centres. These materials are drugs, medical devices and
haematological materials. The activity concerning the request of the materials is not
considered in the ABC model, but it has been included in the flowchart to outline the
interaction between different organizational units. This information could be useful if
the hospital undertakes a reengineering activity. A period of hospital stay follows the
surgery, a period in which other materials are needed, and the patient undergoes new
blood and radiographic tests. The entire process ends with the discharge procedure.
The DTP map aims at outlining the degree of interaction among different
organizational units. As a consequence, inter-functional flowcharts were used to
highlight in which organizational units the activities were performed in (Figure 3).
In the flowchart only the main phases are reported, whereas in the ABC application
some phases have been represented with their constituting activities.
During the mapping phase, each activity was thoroughly described in order to
obtain information about resources used and extra accounting data, such as the time
duration of the actions. In the ABC application, the analysis focused only on the
activities carried out by the orthopaedic unit because the activities performed in the
other organizational units were very few and not significantly relevant. More in detail:
• Pre-surgery examination breakdown: admission, blood sample, blood sample
transport, anesthesiological test.
• Surgery breakdown: patient transport to surgery, surgery, cleaning of the surgery
room.
• Hospital stay breakdown: post-surgical therapy, hospital stay, and medical care.
Details on each element of the DTP are provided in the Appendix.
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ORTHOPAEDIC
TEST LABORATORY PHARMACY HEALTH MANAGEMENT TRANSFUSION CENTRE
DEPARTMENT

Preliminary Examination

Check in and Opened

Case History

Blood test

Radiographic tests

Admission

Anaesthesiological visit

Request drugs Request medical devices Request haematic

for surgical intervention for surgical intervention materials

Surgical Intervention

Stav in Hospital

Request drugs Request medical devices for

for surgical intervention post surgical intervention

Blood Tests

Radiographic tests

Discharge Procedure
processes
of healthcare
inefficiencies

The DTP flowchart

Detecting

Figure 3.
65
 BPMJ 4.3 DTP cost assessment description
21,1 A phase of data retrieval is needed to effectively apply the ABC. This phase is
extremely difficult because it is necessary to get information about accounting and
extra-accounting data. In this case- study, the chief of the planning and control unit of
the hospital, the physician involved in the team, and the pharmacy employees were
interviewed. Based on the information obtained in the DTP mapping phase, resources
66 used and activities for this specific DTP were identified. Table III shows a matrix in
which the rows represent the resources and columns the activities. The “x” in a cell of
the matrix implies that a specific resource is used by that activity.
As it emerges from the resource-activity matrix, the cost of the laboratory and
imaging tests are directly obtained from the accounting information system and not
inferred from the ABC application. Finally, the cost drivers in the allocation of indirect
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costs to the activities are identified. Cost drivers justify the causal relationship between
resources and activities. In the computation of activity cost pools, only the amount used
by the DTP is allocated as a cost to DTP activities. Indeed, the aim of this analysis is to
compute the minimum cost of the specific DTP, and, consequently, it is not relevant
to find out the amount of resources used by other activities. Usually, the application of
the ABC raises the following question: “Which activities absorb this resource and
how?”. To answer this question, the whole cost of a resource is allocated through a cost
driver to all the identified activities, but this cost is due to both operative actions and
non-value added actions, such as downtime. On the contrary, our case raises the
following question: “Which resources are absorbed by DTP activities and how?”
In order to answer this question, it is possible to isolate the cost of the resources used
by activities of a specific DTP from the cost of resources for activities related to other
DTPs and by non-value added actions. Therefore, it is not necessary to know all the
activities carried out in the orthopaedic unit, but rather only the activities related to a
certain DTP, making the ABC application easier. The cost drivers are mainly expressed
in terms of amount of time the patient used an activity, in order to track the duration
of clinical processes for individual patients. “Time” as cost driver is used in the “Time
Driven Activity Based Costing”, the improved version of ABC, and it is a useful
measure to compare the same DTP performed in different organizations.
A brief description of each cost driver follows.
• Electric energy – water – heating – laundry – cleaning: mathematical product
between square metres of space in which activities are carried out and time used
for each activity.
• Employee: time used for a specific activity.
• drugs, medical devices, meals: directly allocated to the activities.
• Stationery: the mathematical product between the number of employees of the
cost centre and the time used for each activity.
At this point, it is possible to compute activity cost pools. Table IV shows a numerical
example of “Post-Surgery Therapy and Hospital Stay” activity cost pool computing. As
the second level analysis (from activities to cost objectives) is not available, Table IV
includes both indirect and direct resources. For direct resources, such as medical
devices, the cost absorbed by the activity can be computed knowing the amount of each
resource needed to perform the activity. For example, the cost of gloves is equal to €2.20
and the package contains 40 gloves but the amount absorbed is equal to 20 gloves: the
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Preliminary
examination Discharge
phase Pre-surgery examination Surgery phase Stay in hospital phase phase
Therapy
Blood Drugs post-
sample and surgery and
Activities Preliminary Check and Imaging Anaesthesiological medical Patient Surgical stay in Radiographic
resources examination in transport Blood tests tests visit devices transport intervention hospital Blood tests tests Discharge

Electric energy X X Costs Costs X X X X Costs Costs X

obtained obtained obtained obtained by
by by by accounting
accounting accounting accounting system
system system system
Water X X
Heating X X X X X X X
Nurses X X X X
Physicians X X X X X
Administrative X
staff
Health staff X X X
Drugs X X
Medical X X X
Devices
Stationery X X X
Laundry X X
Cleanliness X X
Meals X
processes

Resources-activities
of healthcare
inefficiencies
Detecting

67

matrix
Table 3.
 BPMJ Example of direct resources allocation for the activity of therapy post-surgery and stay in hospital
21,1 Medical devices Cost Amount in Amount Cost
package absorbed absorbed
Drip feed set €1.20 1 1 €1.20
Needle pipe €0.78 1 2 €1.56
Syringes €0.09 1 7 €0.63
Gloves €2.20 40 20 €1.10
68 Absorbent cotton €3.60 1 0.75 €0.90
Gauze €0.03 1 10 €0.30
Band-aid €0.56 1 1 €0.56
Peroxide (glass €0.24 1 1 €0.24
bottle)
Disinfectant €0.50 1 0.2 €0.10
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Example of indirect resources allocation for the activity of therapy post-surgery and stay in hospital
Personal resources Cost/minute Driver: time in minute spent Cost
for a specific activity absorbed
Registered nurse €0.40 230 €92.00
Health staff €0.38 126 €47.88
Physicians €1.02 90 €91.80
Electric energy Yearly cost/ square Driver: product between size of the Cost
Table 4. metre room and time spent absorbed
Numerical examples Size Room Time spent Driver
of cost drivers €36.09 20 7 days 0.38 €13.84

cost of the resource “gloves” absorbed by the activity is equal to €1.10. For indirect
resources there are drivers based on time (i.e. employee) and drivers based on space and
time (i.e. electric energy).
Table V summarizes the activity cost pools obtained. The total cost of the surgery
phase is the sum of costs of all the activities that are strictly linked to surgical
intervention.
The minimum cost of the analysed DTP is equal to the sum of the costs of all the
activity cost pools obtained; in this case €5,208.

5. Results
The results of this study show how the cost of a DTP and of its activities can be used to
efficiently manage the DTP itself. Furthermore, it identifies the main barriers and
advantages presented by the application of an ABC methodology.

Cost of DTP activities

Preliminary examination €10

Check in €12
Blood sample and transport €10
Blood and radiographic test €232
Anaesthesiological test €15
Surgery (drugs and medical devices, patient transport, surgical intervention) €4.305
Therapy post-surgery and stay in hospital €559
Blood and radiographic test post-surgery €45
Table 5. Discharge €20
Activity cost pools Total €5.208
 Referring to the usefulness of the cost information obtained by the implementation of the Detecting
ABC, two levels of analysis can be performed. First, a comparison between the DTP cost inefficiencies
and the DRG tariff, which identifies a possible profit or loss. In the proposed case study,
the minimum DTP cost is equal to €5,208 and it does not exceed the corresponding DRG
of healthcare
current tariff, which is €7,920. According to Figure 1, it is possible to conclude that processes
the specific DTP is carried out efficiently, and radical improvements are not needed.
A more accurate analysis of activities and resources can help in detecting opportunities 69
for incremental improvements. Second, by analyzing the information on the cost of the
activities, it is possible to classify the activities according to the cost of the absorbed
resources. The activities with higher costs are defined as critical.
A reengineering process could focus only on these activities, simplifying incremental
reengineering interventions and making the reengineering process faster. In fact, the
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reduction of the costs of critical activities entails a significant reduction of the whole
DTP cost. Figure 4 shows the percentage of costs absorbed by each activity in the
analyzed case study. Specifically, it highlights that the activities of the “Surgery phase”
and “Hospital Stay phase” cover 77.34 per cent of the cost of the DTP (cost of surgery and
cost of hospital stay are, respectively 40.51 and 36.83 per cent of DTP cost). Remaining
activities justify the 22.66 per cent of the cost. According to the Pareto analysis, the
incremental reengineering interventions may focus only on the “surgery phase” and
inpatient activities. In order to make all the activities comparable, the cost of surgery has
been considered without the cost of the orthopaedic surgical device, as the cost of
orthopaedic surgical device considerably impacts the total cost of this activity (the total
cost is €4,305 vs the cost without prosthesis, €3,690).
As critical activities have been identified, the impact of the cost of the resources on the
total cost of each critical activity supports the detection of critical resources. According to
the Pareto analysis, critical resources are those that justify about 80 per cent of the total
cost of a certain activity. Reengineering interventions can be directed exclusively to these
resources through an in depth analysis of downtime and waste. Figure 5 shows the
percentage of costs of each resource absorbed by the “Surgery phase” activity, referring
to the presented case study. The cost of the orthopaedic surgical device has not been
considered in computing the cost of the surgery, because it is independent from the way in
which the activity is performed, and it cannot be reduced through improvement actions.

SURGERY Phase
40.51%
BLOOD and
RADIOGRAPHIC TEST
POST SURGERY DISCHARGE
3.62% 1.32%

Else
7.38%

PRELIMINAR Figure 4.
EXAMINATION Weight of activities
BLOOD and 0.66% ANAESTHESIOLOGICAL
RADIOGRAPHIC TEST
on PDT (without cost
STAY IN HOSPITAL CHECK IN VISIT
15.28% 36.83% 0.79% 0.99% of prosthesis)
 BPMJ As Figure 5 highlights, the “medical device” resource explains the 86.88 per cent of the
21,1 total cost of the activity. An in depth analysis of waste could be performed on this resource.
In the case of the inpatient activity, about 80 per cent of the cost is justified by the
employee (44.24 per cent), by meals (24.95 per cent), and by laundry (11.76 per cent).
Further analysis aimed at improving the efficiency of the DTP may focus on the
downtime of employee as meals and laundry are services carried out in outsourcing.
70 (Figure 6).
Finally, the information obtained by applying the ABC approach to this specific case
suggests that the managers of the hospital could focus exclusively on two critical
activities and on two resources to find opportunities to increase the efficiency of this
specific DTP.
In a process perspective, the contribution of this case study on the application of
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ABC can be summarized in the following aspects:

(1) The case study shows as ABC is a technique able to infer the cost measure
associated to each activity, thus contributing to processes performance
measurement. In particular, the measure proposed in this study, namely the

Cleanliness
Nurses 1.11% Laundry 0.01%
Physicians 0.18%
11.37% Electric Energy,
Heating, Water
0.03%

Else Health Staff

0.64% 0.04%

Figure 5.
Weight of resources Medical Devices
on surgery phase cost 86.88% Drugs
0.38%

Cleanliness
7.19%
Laundry Meals
11.76% 24.95%

Medical Devices
1.60%

Drugs
4.04%
Electric Energy,
Health Staff Heating, Water
9.14% 6.22%

Figure 6.
Weight of resources
on stay-in-hospital Nurses
Physicians
cost 17.53%
17.57%
 minimum DTP cost, could be used to identify the typology of process Detecting
reengineering actions to be implemented. A value of the minimum DTP cost inefficiencies
lower than the corresponding DRG tariff could implies incremental
reengineering interventions, while a value higher than the DRG tariff implies
of healthcare
radical reengineering actions. processes
(2) With respect to the cost containment process, the application of ABC highlights
the activities and resources characterized by an higher cost, giving a detailed 71
picture of cost structure on which managers could intervene to reduce the
DTP cost.
The main barrier encountered in the DTP cost assessment is represented by the
functional logic that characterizes several health organizations based on cost centres
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accounting systems. This logic is reflected in the information system that is based on
cost centres and not on the horizontal care processes. Focusing on cost centres implies
that the information systems are not able to obtain information about activities carried
out in a specific centre. The centre is viewed as a black box in which resources are
consumed and services are produced. The lack of an integrated information system has
hindered the collection of some accounting data and, consequently, the cost of activities
inferred from the pre-existent accounting system is not sufficiently detailed.
Possible barriers related to the lack of collaboration between organizational units
(bottlenecks, increasing lead times, etc.) do not occur in the analyzed case study for the
following reasons:
• the presence of the imaging unit within the orthopaedic unit significantly
decreases the waiting time for the radiographic tests;
• the presence of a cardiologist and of an anaesthesiologist in the staff of the
orthopaedic unit reduces the coordination with other organizational units;
• the presence of a clinical laboratory department in the hospital reduces the lead
time of the laboratory tests;
• the presence of a surgery room in the orthopaedic unit allows to perform
surgeries every day; and
• the presence of an efficient pharmacy unit in the hospital timely provides medical
devices.
The availability of imaging devices and of the surgery room allows to carry out some
important activities (radiographic tests and surgery) into the orthopaedic unit. As a
consequence, waiting times are reduced and there are few conflicts of interaction
among organizational units. These features of the orthopaedic unit allow to perform
most of the analyzed DTP within the unit, facilitating not only the DTP mapping phase
but also the DTP cost assessment phase. The ABC can be applied only to those
activities that are carried out in the orthopaedic unit, and the cost of the activities
performed outside can be obtained by using the pre-existent accounting system. In the
case of a DTP involving more organizational units (consider the case of elderly
patients), the analysis could be much more complex.
From a managerial accounting perspective, we can make the following considerations
based on the pilot case study:
• the ABC framework is pivotal in health organizations funded through the DRG
system. The comparison between the DRG tariff and the minimum DTP cost
 BPMJ allows managers to focus only on the most cost-consuming activities and
21,1 resources. In this sense, a cost accounting technique allows managers to
obtain information for organizational redesign. The accounting issue is
strictly interconnected to organizational tools for the analysis and redesign
of workflow.
• The implementation of ABC is not time consuming for DTPs carried out in only
72 one organizational unit. In this case, the pre-existing cost-centre accounting
system can reassemble easily and promptly the cost information with reference
to the activities. Instead, when the DTP involves more organizational units, an
accurate cost measurement based on ABC becomes a challenge. In this latter
case, the barrier is mainly technical: the information system should be able to
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reassemble the costs of resources both with respect to organizational units and
to activities. A preliminary in depth mapping of organizational and production
processes is strictly required.
We argue that our contribution is not in the use of advanced cost accounting
techniques, such as ABC, but in showing the potential that ABC may offer in
making managers more aware of the real costs of production processes they
supervise. The knowledge about the economic margin of each DTP, along with
the knowledge of the processes linked to DTPs, can help managers in redesigning
the workflows to make them more efficient and effective, and to reduce
unnecessary costs.

6. Conclusions
The aim of this paper is to present a methodological framework to apply the ABC
technique in healthcare organizations provided with a pre-existent accounting system
based on cost centres. The proposed ABC methodology allows computing the
minimum cost of a DTP.
The case study analyzed in the paper highlights how the information on costs
obtained by ABC can guide managers in detecting opportunities to improve the
efficiency of the care processes. Furthermore, it points out the advantages and
barriers of the implementation phase of ABC in a context characterized by a cost
centre accounting system, although the barriers cannot be generalized based on
a single case study.
The results obtained by the application of ABC and the dashboard for detecting
inefficient areas strengthen some key concepts proposed by accounting management
scholars. First, Ittner and Larcher (2002) argue: “accounting is fundamentally an
applied research area that should ultimately provide new insights for practice”.
Our case study shows how accounting information, in particular cost information on
activities and resources, is an organizational aspect to be taken into account for
re-organizational actions. Furthermore, this case study outlines the strong integration
that occurs between BPM and accounting. The accounting methodology, in this specific
case the ABC, detects the critical areas on which the business process managers can
intervene, linking the costs to processes. Of course, the cost information has to be
merged with key performance indicators of the process to understand what are the
most adequate reengineering interventions.
Second, Lega et al. outline the need to better manage the “black box” of healthcare
processes for the creation of value. The proposed dashboard can be applied to evaluate
the DRG associated to all performed DTPs for their strategic management.
 We can conclude that the main contribution of this paper is to give evidence to the Detecting
need of the translation of cost accounting theory in useful models for better manage inefficiencies
productive processes. More in depth, our contribution has been to illustrate which kind
of information is possible to infer by the application of ABC and how this information
of healthcare
can be of great interest of practitioners in BPM. First, ABC supports a cost containment processes
process as it allows highlighting the most cost-consuming activities and resources.
Second, the ABC allows to identify the typology of reengineering interventions, 73
distinguishing between incremental and radical ones through the comparison between
the cost of a health service and the corresponding DRG tariff. Third, the ABC allows to
calculate the cost absorbed by each activity of a DTP. The comparison of these costs
among different organizations could make possible to evaluate the cost variability of
the activities of the same DTP and to what extent the cost can be standardized. Of
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course the standardization process is very complex. In healthcare organizations

difficulties are due primarily to two factors: first, customer involvement in producing
and delivering the service (the customer interacts with frontline staff, physical facilities,
and other customers involved in the process, thereby contributing to determine the
conditions in which the service delivery takes place); second, the strong need for
personalized service (the response of patients to healthcare can be very different and
not always predictable).
The limitation of the study concerns above all the application of ABC to a single
case (a single DTP). The proposed case is a pilot case study conceived as a
base for further exploratory research based on multiple case studies. Further
research is addressed towards two directions: to explore more in depth the
use of proposed dashboard based on ABC in driving reengineering interventions;
and the application of ABC to compute standard costs of DTPs. Propositions
to be tested in the next research phases are related to these two aspects and are
the followings:
(1) Applying the ABC to multiple DTPs in the same organization will affect
positively the efficiency and the effectiveness of decisional processes on
reengineering interventions on clinical pathways.
With respect to this proposition, next steps of the research will concern the
development of multiple case studies related to all the DTPs of the same organization
that share similar resources. This way, it will be possible to place the analyzed DTPs in
the quadrants of the dashboard and to identify: first, the kind of interventions
requested on each DTP; second, the amount of unused resources that could be
employed for other purposes. After this stage, the research will be devoted to gather
qualitative and quantitative data on the impact of the dashboard on the effectiveness
and on the efficiency of reengineering interventions adopted:
(2) Using ABC to calculate the costs of the same DTP in different healthcare
organizations could imply a greater reliability in the standardization of
DTPs’ costs.
Concerning the cost standardization process, we intend to compute the cost of the same
DTP performed in different healthcare organizations to infer which factors impact on a
DTP cost variability. This analysis will be conducted using multiple case studies
relating to national and international healthcare organizations, in order to evaluate to
what extent contextual organizational elements affects cost variability and the level of
cost standardization.
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Further reading
Cardinaels, E., Roodhooft, F. and Van Herck, G. (2004), “Drivers of cost system development in
hospitals: result of a survey”, Health Policy, Vol. 69 No. 2, pp. 239-252.
Demeere, N., Stouthuysen, K., and Roodhooft , F. (2009), “Time-driven activity-based costing in an
outpatient clinic environment: development, relevance and managerial impact”, Health
Policy, Vol. 92 Nos 2-3, pp. 296-304.
Eldenburg, L. and Krishan, R. (1997), “Management accounting and control in health care: an
economic perspective”, in Chapman, C. and Hopwood, A. (Ed.), Handbook of Management
Accounting Research, Vol. 2, Elsevier, New York, NY.
Kaplan, R.S. and Anderson, S. (2004), “Time-driven activity-based costing”, Harvard Business
Review, Vol. 82 No. 11, pp. 131-138.
Kaplan, R.S. and Anderson, S. (2007), “The innovation of time-driven activity-based costing”,
Journal of Cost Management, Vol. 21 Nos 7-8, pp. 5-15.
Lega, F., Prenestini, A. and Spurgeon, P., (2013), “Is management essential to improving
the performance and sustainability of health care systems and organizations?
A systematic review and a roadmap for future studies”, Value in Health, Vol. 16 No. 1,
pp. S46-S51.

Appendix
Field observation and interviews have been used to map the DTP. The questions made to key
actors are: “Can you describe which is the aim of your activities?”, “Which kind of resources are
consumed by the activity?”, “Which are the input data of the activity”, “Which are the outputs of
the activity?”, “To which activity is this activity linked?” In the following table, each component
of the DTP is described according to the above questions (Table AI).
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DTP components Aim of activity Resource consumed Input data Outputs Activities linked

Preliminary The aim is diagnosis evaluation Electric energy, heating, Booking form Diagnosis and, Check in and Opened
Examination Through the telephonic booking, and physicians eventually, Case History
the patient enters the outpatient reservation form
clinic; if the visit confirms the for surgery
request for the surgery, the
patient will book the pre-surgery
examination
Check in and opened The aim is patient’s registration Electric energy, heating, Booking form Case history and Blood sample
medical record in database and case history. The nurses, administrative the list of
nurse records the information in staff examinations to do
medical records
Blood sample and This activity is performed in the For this activity we used List of examinations Results of blood Admission/
transport test laboratory. Its aim is to draw the cost obtained by testing discharge procedure
a blood sample. We include the accounting so this
transport of blood from question does not apply
outpatients to laboratory. This
activity is performed also in the
stay in hospital phase
Imaging tests Its aim is to perform the imaging For this activity we used List of examinations Results of imaging Admission/
tests needed to choose the the cost obtained by tests discharge procedure
prosthesis and to surgery. This accounting so this
activity is performed also in the question does not apply
stay in hospital phase
Admission The aim is to check the medical As this activity is Results of Registration in a Anaesthesiological
record and to assign the sleeping performed few times, we examinations (blood database for the visit
accommodation. This activity is included it in the stay in and radiographic) and surgery
performed by a ward sister hospital activity medical record

(continued )
processes
of healthcare
inefficiencies

DTP components
Detecting

Description of the
77

Table AI.
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78
21,1
BPMJ

Table AI.
DTP components Aim of activity Resource consumed Input data Outputs Activities linked
Anaesthesiological The aim is to decide the type of Electric energy, heating, Medical record Anaesthesiological Surgery intervention
visit anaesthesiological therapy and, physicians, and therapy and a list
eventually, other examinations stationery of further
examination
Request for health The aim is to prepare a list of As this activity is Medical record in The request Surgery and therapy
goods such as drugs, drugs, medical devices and blood performed in few time, which physicians have of stay in hospital
medical devices, tests needed to surgery and we have not considered signed the typology of
haematic materials therapy. This activity is it in the ABC model intervention and
performed by a nurse through therapy
informative system. The request
is made before the intervention
and after the intervention.
Surgery (drugs and The patient is transported to Electric energy, water, Medical record and Intervention Stay in hospital
medical devices, surgery room by staff. The heating, nurses, health good requested
patient transport, surgery consists of a physicians, drugs,
surgical intervention) preoperative phase and surgery. medical devices,
The nurse organizes the laundry, and cleanliness
requested drugs and medical
devices on a serving cart
Therapy post-surgery Usually the stay in hospital lasts Electric energy, water, Medical record Results of Discharge procedure
and stay in hospital 7 days. The patient undergoes heating, nurses, intervention
therapy and examination to physicians, health staff, recorded in a clinic
check the results of the surgery drugs, medical devices, record
laundry, cleanliness, and
meal
Discharge procedure The physician writes the Electric energy, heating, Clinic record Discharge record Planning and control
diagnosis, the therapy and the physicians, and unit
follow-up programme for the stationery
patient in the discharge record.
The discharge record is sent to
the planning and control unit
through the informative system
 About the authors Detecting
Dr Lorella Cannavacciuolo, PhD in Economic and Managerial Engineering, carries out her inefficiencies
research activity in the Department of Industrial Engineering at the University of Naples
Federico II. Her research interests are technology transfer system, innovation network systems in of healthcare
SMSe, planning and control system with particular attention to its design and the implementation processes
in healthcare organizations, innovative costing models to study costs related to processes,
in general, to diagnostic and therapeutical pathways, in particular. She is author of several
international publications. 79
Dr Maddalena Illario is a Researcher in the Department of Translational Sciences at the
Federico II University, as well as a Coordinator of the Research and Development Board of the
Federico II University Hospital. MD, PhD in cellular and molecular biology and pathology, she
spent three years at the Duke University Medical Center as a Research Fellow in Dr A.R. Means’lab,
investigating the role of CaMKIV in hemopoiesis. She currently coordinates the team supporting
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Campania Region candidature as European Innovation Partnership-AHA reference site.

Dr Adelaide Ippolito, PhD in Business Economics. Federico II University Hospital Research
and Development Board. She is a past Adjunct Professor of Economics and Management of
Public Utilities at the University of Salerno. Since 1992, she has been conducting research in the
field of service management and public services, focusing on healthcare providers. She carries
out teaching and advisory activities to healthcare providers. She was a member of the Evaluation
Committee in several Public Healthcare Authorities. She has published several books and articles
on the subject of healthcare management. Highly Commended Award Winner Emerald Literati
Network Awards for Excellence 2010 for Creating Value in Multiple Cooperative Relationships.
Dr Adelaide Ippolito is the corresponding author and can be contacted at: [email protected]
Dr Cristina Ponsiglione, PhD, is a Research Fellow in the Department of Industrial
Engineering at the University of Naples Federico II, where she is also an Assistant Professor in
Management Accounting at the School of Engineering. Since 2001, she has been involved in
a number of projects concerning the design and the implementation of Planning and Control
Systems in healthcare public structures and she is currently working on the Management
Accounting System of the teaching hospital “Azienda Ospedaliera Universitaria Federico II”.
Her research interests concern the design and the implementation of planning and control
systems in healthcare public institutions, such as hospitals and local healthcare delivery
structures.

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