About Activity-Based Costing and Management

Activity-Based Costing and Management (ABC/M) was born from a recognition that country governments and global institutions need to align and optimize their investments—particularly against the backdrop of an ongoing transition in which country governments are assuming incrementally greater fiscal responsibility for service delivery. This initiative is remarkable in that it will generate highly-detailed information, down to the patient level, allowing country governments and global institutions to align and optimize their investments.

ABC/M empowers ministries and funders to gather patient-level information on HIV resource allocation and then share findings through a learning collaborative model.  ABC/M data has been collected in Tanzania, Uganda and Kenya, with plans to expand. Ministries will soon have access to information on the actual distribution and cost of resources allocated to patients at facilities and in their local communities, which should catalyze efforts to make resource allocation more equitable and efficient over time. Health system directors and government officials will have information on which facilities have standardized care processes that correspond to best practices, as well as those that require closer monitoring to replace ad hoc and inconsistent processes. Periodic re-estimation will provide feedback on whether policies and programmatic changes are leading to improvements in patient outcomes. 

Each country-level effort has assembled a local steering committee, employed local institutions, and developed an implementation strategy focused on long-term capacity building that leverages existing data systems. While ABC has been used in high-income countries primarily for cost reduction, its application in low-resource settings will likely reveal situations where greater resources are desirable. This may include higher compensation to attract and retain frontline healthcare workers, or increased staffing levels to extend patients’ face time with providers. A primary emphasis of this initiative will be to strengthen value for money and optimize program performance. 

Secretariat

As part of the activity-based costing and management initiative, Boston University is serving as a Secretariat to support this effort. We have established the ABC/M Technical Committee, which includes technical experts, leaders in funding agencies/development partners, as well as country policy makers to guide, structure, and implement the global agenda on ABC/M in order to maximize synergy.

The Technical Working Group is chaired by Boston University, with other members representing the Global Fund, the Gates Foundation, WHO, Harvard Business School, RAND, US Department of Treasury, and GHSD/PEPFAR.