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Using Cost Management for a More Efficient Canadian Health-care System

Medical worker holding tablet

Canadian health-care systems have faced tremendous difficulties and criticism, especially with regards to high wait times and service quality. According to the World Health Organization Global Health Expenditure Database, Canada has been one of the largest spenders on health care since 2000. However, this high spending has not led to better quality care. 

Shujin-DingThat’s why Professor Shujun Ding has received a Social Sciences and Humanities Research Council Insight Development Grant for a project titled The Application of Time-Driven Activity-Based Costing in Canadian Hospitals. Professor Ding will examine the use of time-driven activity-based costing (TDABC) in health care, to better understand cost management practices in Canadian hospitals (a key issue given Canada’s ageing population). He will survey and interview hospital staff, to understand what influences implementation of TDABC in hospitals, the impact of implementation and variations in how it’s implemented. 

For Professor Ding, “management accounting tools and the typical elements of management control systems (MCS) are consistently listed among the 25 most popular tools employed by executives around the globe. But the implementation of such tools and techniques in the health-care sector is understudied. My proposed study aims to provide first-hand empirical evidence … and would lay a foundation for follow-up studies to continue examining MCS in health care.”

The 2013 Commonwealth Fund International Health Policy Survey also found high dissatisfaction with Canadian health care, which increased due to the COVID-19 pandemic. Time-driven activity-based costing is a potential solution to many of the problems health care systems are facing. 

Trying a New Approach

Since its development in 2004, time-driven activity-based costing has been a popular cost management system. It’s been used in other industries but has only recently become popular in health care.

TDABC can help with decision-making and planning, increase efficiency in budgeting to reduce wait times and reduce resources allocated to some needs, allowing them to be used elsewhere. 

Professor Ding’s research could have both a practical and an academic impact, improving cost management systems, facilitating evidence-based health-care policy and adding to the literature on health-care cost management systems. 

About the Author

Phoenix a rejoint l'équipe de Direction de la recherche de Telfer en 2021 grâce au régime travail-études. Elle est diplômée du baccalauréat spécialisé en enseignement des langues secondes et est présentement inscrite au programme de formation à l’enseignement (B.Éd.). Ses responsabilités comprennent la gestion et l'analyse de données, la rédaction d'articles, en plus d'autres tâches administratives.<br/><br/>Phoenix joined the Telfer Research Office in 2021 through the work-study program. She holds an Honours Bachelor of Arts in Second Language Teaching and is working toward a Bachelor of Education. Her responsibilities include data management and analytics, story writing, and other administrative tasks.

Profile Photo of Phoenix Hudson