A hospital unit cost model

The primary objective of this study is to develop a methodology for determining an estimate of the cost of a hospital's discharge case. A secondary objective is to establish an integrated data base structure capable of producing cost information. Costing is performed at the patient service level in order to make the approach applicable to all types of patients and multiple product definition schemes.

The objectives are accomplished by first creating an architectural structure of a unit cost system through a unique application of the IDEF-0 technique. IDEF-0 is a function modeling language developed by the U. S. Air Force within its Integrated Computer-Aided Manufacturing (ICAM) program for application to factory modernization initiatives within the aerospace industry.

A literature survey provides a review of the need for a unit cost system. It discusses the traditional methods employed in studying hospital cost, the structure of the Medicare Prospective Payment System, and current approaches used to determine product cost.

Mathematical models are developed for the determination of direct production costs and overhead allocation. The Minch and Petri version of the simultaneous equation technique is used to fully recognize the reciprocity of services between the overhead work centers.

An information model is constructed using the IDEF-1 technique developed in the ICAM Program. IDEF-1 provides an organized set of rules and procedures for representing the structure of information within a domain such as unit costing of hospital services. The abstrac tion is developed in terms of four concepts; the entity class, relation class, attribute class, and key class. The model is translated into a computerized data base management system (DBMS) and compared structural ly to an industry standard for DBMS design.