3°COHORTE MÓDULO 3 SEMANA 4: clase sincrónica Ctdr. Gustavo Traballini

Main ideas, concepts, and lessons

1) Foundations for cost analysis (why and how)

• Use “sound judgment” when costing: avoid over-engineering precision that costs more than the benefit.

  • Example: An electricity bill can be analyzed with engineering-level precision, but doing so may cost more than it would save; simpler estimates may be more cost-effective.

• Clarify the “scope” before calculating costs (“where are we standing?”):

  • Identify what service is being costed (e.g., diagnostic imaging, operating room).
  • Within that service, break costs into categories such as:
    • Fixed vs. variable
    • Direct vs. indirect

• Fixed vs. variable depends on production/activity—not inflation or price changes:

  • Fixed costs stay the same as long as the service volume/production context remains.
    • Even if the service is paused (e.g., shut down), fixed costs can still exist for the established structure.
  • Variable costs change with production/activity.
    • If no surgeries occur, variable costs tied to surgeries do not accrue.

• Direct vs. indirect depends on identifiability:

  • Direct cost: clearly attributable to the specific service/practice.
  • Indirect cost: cannot be traced clearly; must be allocated using an allocation base (distribution criterion).

2) The cost structure in healthcare

Costs are built from three main elements:

1. Inputs (materials/raw inputs; in healthcare these are supplies)
2. Labor
3. Overhead / indirect costs

Indirect costs have become increasingly important because many shared hospital functions exist. Example: Security may belong to the whole clinic/hospital but must be allocated into service costs.

3) Marginal contribution and break-even

• Marginal contribution

  • Calculated as: revenues − variable costs
  • Interpreted as the amount that helps cover fixed costs
  • If variable costs are covered by the service’s “value,” marginal contribution can be positive, supporting fixed-cost coverage.

• Break-even point

  • Occurs when revenue equals total cost, where total cost = fixed + variable
  • Above break-even ⇒ profits
  • Below break-even ⇒ losses

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Methodology / instruction-like content (detailed bullet format)

A) General costing workflow described

• Step 1: Decide the costing object

  • Specify the service/practice to analyze (e.g., operating room).

• Step 2: Classify each cost item

  • Mark each cost item as:
    • Fixed or variable depending on whether it depends on production/activity.
  • Then classify fixed costs as:
    • Direct (traceable to the service)
    • Indirect (not traceable; requires allocation)

• Step 3: Determine a cost per unit of capacity

  • For an operating room, compute cost per hour based on:
    • Monthly total operating room cost
    • Monthly available working hours

• Step 4: Recalculate under a changed capacity scenario

  • Example: compare 7 hours/day vs 8 hours/day
  • Identify which cost categories change:
    • Fixed costs typically remain the same in total
    • Variable costs rise with increased activity

• Step 5: Interpret efficiency and downtime

  • Efficiency matters because downtime increases unit cost:
    • fixed costs are spread over fewer productive hours

• Step 6: For complex settings (e.g., dentistry), compute cost per minute

  • Convert labor, equipment depreciation, and indirect costs into cost per minute
  • Multiply by consultation length (e.g., 15/20/30 minutes)
  • Add variable supplies costs per consultation

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B) Exercise 1 instructions (Operating room)

Given operating room assumptions:

• Monday to Friday
• 7 hours per day
• Simplified month: 20 working days

Required tasks:

• Classify monthly operating room costs

  • Identify each listed cost as fixed or variable
  • Then classify fixed costs into direct vs. indirect

• Compute

  • Total operating room cost
  • Operating room hourly cost
    • Total cost ÷ (7 hours/day × 20 days) = cost per hour

• Recompute for 8 hours/day

  • Identify what changes:
    • Fixed costs remain (total fixed cost unchanged)
    • Variable costs increase with additional operating hours
  • New cost per hour:
    • Total cost under new activity ÷ (8 hours/day × 20 days)

Conceptual takeaway:

• More productive hours (less downtime) spreads fixed costs and can reduce hourly unit costs, but increased activity also raises variable costs.

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C) Exercise 2 instructions (Dental office; cost per consultation minute)

Problem setup:

• 10 dental chairs/consulting offices
• Plus a laboratory area
• Staff assumptions:
  • 10 dental professionals
  • Average salary = 85,000 pesos
  • Workday = 9 hours
  • Working month = 21 days
  • Consultation opening hours mentioned around 8:20 (used to derive available time)
• Average consultation time = 20 minutes, but consultations vary
  • Convert to a cost per minute so pricing can cover 15, 20, or 30 minutes

Required tasks:

• Compute labor cost per minute

  • Total monthly labor cost ÷ total available minutes per month (across offices)

• Compute equipment depreciation/amortization per minute

  • For each equipment item:
    • Total equipment value = unit price × quantity
    • Annual depreciation based on useful life (years)
    • Convert annual/monthly depreciation into per-minute amount using total available minutes

• Compute indirect costs per minute

  • Use an indirect-cost table with:
    • cost items, amounts, and allocation bases
  • Allocation bases must use logical criteria (examples used):
    • Electricity: installed capacity estimates (percentages across admin/office/lab)
    • Telephone: direct-line/call distribution percentages
    • Rent/expenses/liquidity/general: square meters
    • Personnel administration: direct personnel counts
    • Some items assigned by policy/allocation assumptions (e.g., biohazard waste assigned largely away from administration)
  • Distribute administration costs between office and laboratory (e.g., 76% office / 24% lab)
  • Divide total indirect cost allocated to the office by total minutes → indirect cost per minute

• Create a cost-per-minute summary

  • Labor per minute + equipment amortization per minute + indirect cost per minute

• Compute consultation cost

  • Fixed/service part: cost per minute × consultation minutes
  • Add variable costs (consumables used in the consultation)
    • Example consumables listed: disposable brush, cup, mouthguard, gloves, mask, etc.

Conceptual takeaway:

• Total consultation cost = (time-based allocated costs) + (consumable variable costs)
• Can be used to support pricing negotiations (e.g., not pricing below a calculated minimum).

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Real-world emphasis / broader lessons

• Accountants alone can’t do everything: clinical/technical knowledge is necessary to correctly estimate:

  • useful lives of equipment
  • which supplies are used in each service
  • how much time each professional spends on a given procedure

• Efficiency reduces unit cost

  • Unit cost depends on how fixed costs are spread over productive activity.
  • Downtime (e.g., an operating room not used) increases cost per hour.

• Policy/system-level point (Argentina/health coverage discussion in closing remarks)

  • The argument is that fixed costs burden providers and that stakeholders may underestimate true costs (including legal-driven costs affecting PMO/health plan costs).
  • Core takeaway: institutions must understand and manage fixed costs through efficient resource utilization.

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Speakers / sources featured

• Ctdr. Gustavo Traballini (main lecturer; includes bio and later teaching/explanation of both exercises)
• Unspecified “students” / participants (no individual names given; they ask/answer during exercises)
• No external published sources are explicitly cited in the transcript.