ICU costs

Accounting for costs at the unit level is part of 'management accounting' or 'cost accounting'. Accounting costs registered at the hospital level are allocated to the different hospital departments, such as the ICU. Two distinctions are conceptually important.

The first is the distinction between direct and indirect costs. A direct cost of an ICU is a cost that is traceable to ICU activities. Indirect costs are not traceable to ICU activities, although some vague relationship can be assumed. The difference between direct costs and indirect costs is not absolute; the measurement technology used dictates which costs are to be treated as direct and which as indirect. In this sense the activity-based costing technique should be considered as a further refinement of existing techniques, and not as a conceptually new approach to costing.

Examples of indirect costs for an ICU are hospital management, costs of buildings and cleaning, costs of interventions in the operating theater, hospital gardeners, etc. Confusingly, the term 'indirect' cost is used in a different way in some health economic texts; when determining the cost of a specific treatment, costs due to lost earnings, lost production, or lost income are labeled indirect costs ( Koopmanschap..and...Rutten 1994). In our terminology, these are direct costs of the treatment, but not of the ICU; they are not indirect ICU costs, as they are not borne by the hospital. The fact that they cannot be measured easily should not change their definition (Durand-Zaleski 1994).

As other units have similar indirect costs, an important problem is how to allocate them to all the units concerned. Many techniques exist, but none is perfect and all are arbitrary to some extent. This makes cost comparisons between ICUs in different hospitals very difficult, particularly when direct costs and indirect costs are combined. For example, in a given hospital ICU costs themselves might be considered indirect costs for the medical or the surgical departments.

In our view, only direct costs should be taken into consideration when comparing ICUs because they are the only costs that reflect resource use under the responsibility of the ICU manager.

The second distinction is that between fixed costs and variable costs. A fixed cost is a cost that is not influenced, directly or indirectly, by the level of ICU activities in a given period of time, traditionally 1 year. Variable costs are influenced by the level of ICU activities, measured for example by the number of Therapeutic Intervention Scoring System (TISS) points per day, the number of patients, or the number of patient-days.

It must be stressed that direct-indirect and fixed-variable costs are two independent cost characterization scales, resulting in 2 * 2 = 4 different possible cost categories.

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