Unit Cost Analysis for Health Academic and Operational Purposes

Paneevon Palakawong Na Ayutthaya; Oraluck Pattanaprateep; Ammarin Thakkinstian

doi:10.33165/rmj.2020.43.1.217894

Authors

Paneevon Palakawong Na Ayutthaya Department of Clinical Epidemiology and Biostatistics, Faculty of Medicine Ramathibodi Hospital, Mahidol University, Bangkok, Thailand
Oraluck Pattanaprateep Department of Clinical Epidemiology and Biostatistics, Faculty of Medicine Ramathibodi Hospital, Mahidol University, Bangkok, Thailand
Ammarin Thakkinstian Department of Clinical Epidemiology and Biostatistics, Faculty of Medicine Ramathibodi Hospital, Mahidol University, Bangkok, Thailand

DOI:

https://doi.org/10.33165/rmj.2020.43.1.217894

Keywords:

Unit cost, Academic, Top-down, Cost allocation

Abstract

Background: Unit cost estimation is one of the key planning tasks of organisation in order to allocate resources to each activity properly. Therefore, this study was conducted applying top-down costing approach, for academic unit cost estimation.

Objective: To estimate the unit costs using top-down allocation costing approach for academic and operational purposes of the Department of Clinical Epidemiology and Biostatistics (CEB) at Faculty of Medicine, Ramathibodi Hospital, Mahidol University.

Methods: A cross-sectional study of the cost of CEB in fiscal year 2018 was retrieved. Direct and indirect costs were allocated to CEB based on 3 main missions (education, research, and academic services) considering staffs’ activities and time spent for each mission. Three cost per unit of measures (cost per student, cost per publication, and cost per research consultation) were estimated accordingly to these 3 main missions.

Results: In the fiscal year 2018, direct and indirect costs were ฿15 178 761 and ฿737 496, respectively. As for staffs’ time spent for each mission activity, CEB mission costs were ฿6 807 282 for education (฿3 914 187 and ฿2 893 095 for MSc and PhD, respectively), ฿5 912 895 for research, and ฿2 186 280 for academic services.

Conclusions: Unit cost should be estimated properly to minimise and optimally allocate resources to each activity. This study should be useful for other departments as a guideline for their cost management and resource planning.

References

1. West P. The costs of higher education: how much do colleges and universities spend per student and how much should they spend? J Teach Educ. 1981;32(5):57-58. doi:10.1177/002248718103200516.

2. Anwar IM. Administrasi Pendidikan dan Manajemen Biaya Pendidikan: Teori, Konsep, dan Isu. Bandung: Alfabeta; 2004:26.

3. Kurniawan A, Yuniarsih T, Sumarto S. Proceedings of the 6th International Conference on Educational, Management, Administration and Leadership (ICEMAL2016): Unit Cost Analysis in Higher Education. Advances in Economics, Business and Management Research, Atlantis Press; 2016:1-4. doi:10.2991/icemal-16.2016.1.

4. St. John EP, Paulsen MB. The Finance of Higher Education in the Twenty-First Century. In: Paulsen MB, Smart JC, eds. The Finance of Higher Education: Theory, Research, Policy, and Practice. New York: Agathon Press; 2001:543-545.

5. Franklin B. Activity-Based Costing and Customer Profitability Analysis. In: Blocher EJ, Stout DE, Cokins G, eds. Cost Management: A Strategic Emphasis. 5th ed. New York, NY: McGraw-Hill/Irwin; 2010:127-135. https://files.transtutors.com/cdn/uploadassignments/transtutors005_dr._washington-cost-management-a-strategic-emphasis_0.pdf. Accessed January 6, 2020.

6. Atkinson AA, Kaplan RS, Matsumura EM, Young SM. Management Accounting: Information for Decision-Making and Strategy Execution, 6th ed. Upper Saddle River, NJ: Pearson Prentice Hall; 2012.

7. Szatmary DP. Activity-Based Budgeting in Higher Education. Continuing Higher Education Review. 2011;75:69-85. https://files.eric.ed.gov/fulltext/EJ967809.pdf. Accessed January 6, 2020.

8. Peternick L, Smerdon BA, Fowler WJ, Monk DH. Using Cost and Need Adjustments to Improve the Measurement of School Finance Equity. In: Developments in school finance 1997. Washington, DC: National Center for Education
Statistics. US Department of Education; 1998:149-168. https://nces.ed.gov/pubs98/98212.pdf. Accessed January 6, 2020.

9. Özaltın A, Cashin C, eds. Costing of Health Services for Provider Payment: A Practical Manual Based on Country Costing Challenges, Trade-offs, and Solutions. Washington, DC: Joint Learning Network for Universal Health Coverage; 2014. http://www.accessh.org.cn/wp-content/uploads/2016/05/JLN_Costing_Toolkit_Interactive_FINAL.pdf. Accessed January 6, 2020.

10. Rajamangala University of Technology Thanyaburi. Cost Per Unit 2017. https://www.rmutt.ac.th/download/Cost-per-unit/20180228-Cost-per-unit.pdf. Published February 28, 2018. Accessed January 6, 2020.