Article Text

Download PDFPDF

Rethinking the cost of healthcare in low-resource settings: the value of time-driven activity-based costing
  1. Ryan K McBain1,
  2. Gregory Jerome2,
  3. Jonathan Warsh3,
  4. Micaela Browning1,
  5. Bipin Mistry3,
  6. Peterson Abnis I Faure2,
  7. Claire Pierre2,4,
  8. Anna P Fang5,
  9. Jean Claude Mugunga1,
  10. Joseph Rhatigan4,6,
  11. Fernet Leandre2,
  12. Robert Kaplan3
  1. 1Partners in Health, Boston, Massachusetts, USA
  2. 2Zanmi Lasante, Port-au-Prince, Haiti
  3. 3Harvard Business School, Boston, Massachusetts, USA
  4. 4Harvard Medical School, Boston, Massachusetts, USA
  5. 5Analysis Group, Inc., Boston, Massachusetts, USA
  6. 6Dept of Global Health Equity, Brigham and Women's Hospital, Boston, Massachusetts, USA
  1. Correspondence to Dr Ryan K McBain; rmcbain{at} and rmcbain{at}


Low-income and middle-income countries account for over 80% of the world's infectious disease burden, but <20% of global expenditures on health. In this context, judicious resource allocation can mean the difference between life and death, not just for individual patients, but entire patient populations. Understanding the cost of healthcare delivery is a prerequisite for allocating health resources, such as staff and medicines, in a way that is effective, efficient, just and fair. Nevertheless, health costs are often poorly understood, undermining effectiveness and efficiency of service delivery. We outline shortcomings, and consequences, of common approaches to estimating the cost of healthcare in low-resource settings, as well as advantages of a newly introduced approach in healthcare known as time-driven activity-based costing (TDABC). TDABC is a patient-centred approach to cost analysis, meaning that it begins by studying the flow of individual patients through the health system, and measuring the human, equipment and facility resources used to treat the patients. The benefits of this approach are numerous: fewer assumptions need to be made, heterogeneity in expenditures can be studied, service delivery can be modelled and streamlined and stronger linkages can be established between resource allocation and health outcomes. TDABC has demonstrated significant benefits for improving health service delivery in high-income countries but has yet to be adopted in resource-limited settings. We provide an illustrative case study of its application throughout a network of hospitals in Haiti, as well as a simplified framework for policymakers to apply this approach in low-resource settings around the world.

This is an Open Access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited and the use is non-commercial. See:

Statistics from

Request Permissions

If you wish to reuse any or all of this article please use the link below which will take you to the Copyright Clearance Center’s RightsLink service. You will be able to get a quick price and instant permission to reuse the content in many different ways.


  • Handling editor Seye Abimbola

  • Twitter Follow Jean Claude Mugunga at @jcmugunga

  • Contributors RKM and JW were responsible authorship of the first draft of this manuscript, with substantive revisions and edits from GJ, MB, BM, PAIF, CP, APF, JCM, JR, FL and RK. PAIF, GJ, and FL led data collection in Haiti, with technical support from MB, RKM, BM and JW. Review and analysis of the data were provided by MB, RKM and PF. Methodological guidance and oversight were provided by RK, JW and BM.

  • Funding This study was funded by the Bill and Melinda Gates Foundation (OPP1120523).

  • Competing interests None declared.

  • Ethics approval The research protocol was approved by the Zanmi Lasante IRB.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Data sharing statement No additional data are available.