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Moving towards activity-based costing (ABC) with UPMC CFO

By Admin | January 09, 2017

Robert DeMichiei, CFO and executive vice president for the University of Pittsburgh Medical Center, has a plan to help healthcare provider organizations move towards the value-based payment model.

Activity-Based Costing (ABC) initially focused on quantifying specific tasks and then assigning values to them based on a set of criteria. DeMichiei and his team studied basic operations, paid attention to the variations for procedures, lab work, inpatient stays and other related activities, in order to gather pristine data. This information would then help UPMC assess their costs in order to remain financially stable and even profitable.

The method has proven successful for his and other organizations. In February of 2017, he is even presenting his method and findings in Orange County.

For more information about the method and DeMichiei’s presentation, read “UPMC CFO on the 'ABCs' of cost management in value-based care” from Healthcare IT News.

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