See

discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/10581831

Activity-based costing: A practical model for

cost calculation in radiotherapy

Article in International Journal of Radiation OncologyBiologyPhysics · November 2003

DOI: 10.1016/S0360-3016(03)00579-0 · Source: PubMed

CITATIONS READS

102 463

3 authors, including:

Katrien Kesteloot
Universitair Ziekenhuis Leuven
81 PUBLICATIONS 1,473 CITATIONS

SEE PROFILE

All in-text references underlined in blue are linked to publications on ResearchGate, Available from: Katrien Kesteloot
letting you access and read them immediately. Retrieved on: 11 October 2016
 Int. J. Radiation Oncology Biol. Phys., Vol. 57, No. 2, pp. 522–535, 2003
Copyright © 2003 Elsevier Inc.
Printed in the USA. All rights reserved
0360-3016/03/$–see front matter

doi:10.1016/S0360-3016(03)00579-0

CLINICAL INVESTIGATION Radiation Oncology Practice

ACTIVITY-BASED COSTING: A PRACTICAL MODEL FOR COST

CALCULATION IN RADIOTHERAPY

YOLANDE LIEVENS, PH.D.,* WALTER VAN DEN BOGAERT, PH.D.,* AND KATRIEN KESTELOOT, PH.D.†
*Department of Radiation Oncology, University Hospitals Leuven, Leuven, Belgium; †University Hospitals Leuven and Center for
Health Services and Nursing Research, KU Leuven, Belgium

Purpose: The activity-based costing method was used to compute radiotherapy costs. This report describes the
model developed, the calculated costs, and possible applications for the Leuven radiotherapy department.
Methods and Materials: Activity-based costing is an advanced cost calculation technique that allocates resource
costs to products based on activity consumption. In the Leuven model, a complex allocation principle with a large
diversity of cost drivers was avoided by introducing an extra allocation step between activity groups and
activities. A straightforward principle of time consumption, weighed by some factors of treatment complexity,
was used. The model was developed in an iterative way, progressively defining the constituting components (costs,
activities, products, and cost drivers).
Results: Radiotherapy costs are predominantly determined by personnel and equipment cost. Treatment-related
activities consume the greatest proportion of the resource costs, with treatment delivery the most important
component. This translates into products that have a prolonged total or daily treatment time being the most
costly. The model was also used to illustrate the impact of changes in resource costs and in practice patterns.
Conclusion: The presented activity-based costing model is a practical tool to evaluate the actual cost structure of
a radiotherapy department and to evaluate possible resource or practice changes. © 2003 Elsevier Inc.

Radiotherapy, Cost calculation, Activity-based costing.

INTRODUCTION cost of other activities within the RT process, such as

Radiotherapy costs
Although the importance of accurate cost data has
gradually become recognized by the medical profession
and more specifically by radiation oncologists, literature
data on the cost of radiotherapy (RT) activities and
products are scarce and often contradictory (1–3). Al-
though part of the literature analyzed the costs of specific
aspects of the RT process, most efforts have focused on
the cost of RT delivery—the cost per patient visit (or
fraction), extrapolated to a global RT treatment cost
(2– 8). Because of differences in methods, included cost
components and RT activities, and health care systems,
these studies yielded considerable variation in computed
costs, rendering the comparison of the results unreliable
(1, 3). Moreover, most of these approaches calculated the
average costs; total treatment costs were obtained by
multiplying the average cost per fraction by the number
of fractions typically given for each type of treatment.
This method may, however, not give a good representa-
tion of the consequences of fractionation changes on
resource consumption (2), because it implicitly assumes a
stable relationship between the cost per fraction and the
planning or fixation. In practice, this is usually not the
case, hence the cost of the different steps should ideally
be calculated separately (3).
Because they are easy to obtain, charges (i.e., patient
bills), whether or not adapted by cost/charge ratios (9, 10),
are frequently used as proxies for resource cost. The same
goes for reimbursement data of RT. Although it is theoret-
ically possible that charges or reimbursement for a given
procedure are an accurate measure of its actual resource
cost, this is rarely the case in reality because of historical
and political factors, government regulations, budget con-
straints, and market forces (11).
In view of producing more accurate resource cost esti-
mates, health care organizations have started to invest in
more sophisticated cost-accounting systems capable of pro-
ducing activity- or product-specific cost data (12). Activity-
based costing (ABC) is a cost-accounting system that allo-
cates the resource costs to the products using a multistep
allocation procedure on the basis of activity consumption.
This article describes the development and application of
such an ABC system for the RT department of the Leuven
University Hospital.

Reprint requests to: Yolande Lievens, Ph.D., Department of E-mail: yolande.lievens@uz.kuleuven.ac.be

Radiotherapy, University Hospitals Leuven, Herestraat 49, Leuven Received Oct 29, 2002, and in revised form Apr 17, 2003.
3000 Belgium. Tel: 0032 16 347600; Fax: 0032 16 347623; Accepted for publication Apr 23, 2003.

522
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT
Fig. 1. ABC schematic.
Activity-based costing
In an era of rapidly increasing production complexity,
product size, and volume diversification, ABC was devel-
oped as a response to the shortcomings of traditional cost
accounting methods.
Whereas the latter focus on the products and directly
assign resource costs (e.g., wages, equipment) to the prod-
ucts on the basis of the assumption that each product con-
sumes a certain amount of these resources, ABC (Fig. 1)
focuses on the activities (13–15). More specifically, the
assignment of costs through ABC occurs in two stages: cost
objects (i.e., services or products) consume activities, activ-
ities consume (resource) costs. In practice, this means that
the indirect costs are allocated to the products on the basis
of the activities consumed within the production process
(e.g., medical wage costs are allocated to different activities
such as simulation or follow-up) using “first-stage cost
drivers.” The further allocation of the costs of activities to
the products is performed in a second step using “second-
stage cost drivers.” Traditional approaches use only a few
(mostly volume-based) cost drivers. In ABC, a large num-
ber of diverse cost drivers may be used, reflecting the
relation between the resource costs and activities and be-
tween the activities and products.
The practical scheme that underlies this stepwise alloca-
tion, and thus the constituting components (i.e., costs, ac-
tivities, products, and cost drivers), is, however, unique for
each specific situation.
The major advantage of ABC lies in a more accurate cost
computation, especially in situations in which product di-
versity is important and in which the indirect costs, not
directly traceable to the products, represent an important
proportion of the total costs.
Additionally, ABC also allows an in-depth product anal-
ysis by explaining the relationship between the products and
523
activities. The improved insights in the (cost) structure of
products and of departments supports continuous process
improvements, referred to as activity-based management
(13).
The potential drawback of ABC systems lies in the time
and resource consumption associated with the development
and management of such complex cost-accounting tech-
niques. Because the precision of an ABC model depends
critically on the level of detail of its constituting compo-
nents, an appropriate choice of this level of detail is crucial.
If the process analysis or the product definition is not
detailed enough (aggregation), the obtained cost per product
will not be considered relevant because of a lack of speci-
ficity. Conversely, if too many (sub)activities and products
are defined (disaggregation), the whole calculation process
becomes too complex and difficult to perform, which in turn
translates into a greater workload and associated cost in the
development phase, as well as during routine use, of the
program.
The difficulty in designing a good cost system thus lies in
achieving a model that is easy and economic to maintain yet
does not introduce excessive distortions (16). We describe
the way in which this was approached in the Leuven radio-
therapy department.
METHODS AND MATERIALS
Development of an ABC system for the Leuven
radiotherapy department
The described cost-accounting model was developed for
the Leuven radiotherapy department using the product and
activity data of 2000. In 2000, the department delivered
1769 external beam radiotherapy (EBRT) courses, operated
with four treatment machines (linear accelerators, of which
one was a multileaf collimator [MLC]) and two simulators.
The personnel working in the department consisted of 11
full-time equivalent (FTE) radiation oncologists (5.5 FTE
staff members, 5.5 FTE residents), 29.13 FTE paramedical
staff, and 3.47 FTE administrative staff.
The ABC program of the Leuven radiotherapy depart-
ment was developed in an iterative way by progressively
defining its components. Because the main incentive of this
exercise was to gain insight into the cost structure of the
Leuven radiotherapy department and to obtain accurate cost
estimates of the delivered radiation treatments for additional
use in management applications and for economic evalua-
tions, a detailed approach was necessary.
The different allocation steps defined within the devel-
oped model are schematically shown in Fig. 2. Specific to
this model is that a distinction was made between the
different levels of activities: (1) activity groups were de-
fined as the global amount of a certain activity (e.g., simu-
lation) and included all the specific activities incorporated
into this group; and (2) specific activities represent activities
linked to a specific product (e.g., simulation of a tangential
breast irradiation).
The definition of two activity levels translated into the
524 I. J. Radiation Oncology ● Biology ● Physics
Fig. 2. ABC in Leuven radiotherapy department: allocation steps.
vast majority of the costs (wage, equipment, and space, all
indirect costs) being allocated using a three-step procedure.
As is common practice in ABC, the first-stage cost drivers
allocated the resource costs to the activity groups. The
second step, using second-stage cost drivers, allocated the
costs of these various activity groups to the specific activ-
ities. It was only in the third step that the costs were
allocated to the products. In this final step toward the
calculation of the (treatment-related) product costs, the ac-
tivity costs per product were added. Moreover, multiplica-
tion factors (or third-stage cost drivers), accounting for the
complexity of the treatments (i.e., the number of fractions
and number of fields), were introduced in this step.
A very complex allocation principle with a large diversity
of cost drivers could be avoided by introducing an extra
allocation step between activity groups and activities. The
straightforward principle of time consumption, weighed by
some factors of treatment complexity, was used instead.
A few cost components were not allocated to the products
following this stepwise allocation procedure. Part of the
material costs were defined as direct costs and therefore
were directly assigned to the products. The overhead costs
were treated in varying ways. Some of the so-called depart-
mental support costs were related to machine maintenance
and were therefore reallocated to the equipment costs. The
remainder of the departmental support costs (e.g., research
and teaching) and the hospital support costs (e.g., general
management) were allocated to the products using a param-
eter that mimics product complexity. These overhead costs
were not allocated through the intermediary of activity
consumption but by using a complexity parameter, for
which the number of fractions was chosen.
Volume 57, Number 2, 2003
After having performed all described allocations, the
global cost of the product equals the sum of the wage,
equipment, and space (treatment-related) activity costs, the
specific material cost, and the allocated proportion of the
overhead costs.
Within the development of the ABC model, the costs,
activities, products, and cost drivers were progressively
defined. This resulted in a large data set. To link these
data— using the defined allocation principles and cost driv-
ers and with the aim of calculating the RT product costs—a
computer program was developed using Microsoft Excel
software. The consecutive Excel files, mirroring the ABC
structure, are presented in Table 1.
Costs
All cost inputs (Table 2) used in the ABC program were
obtained from the Leuven University Hospital in 2000 and
expressed in Euro (€). The actual costs were used for all
resources; for the durable inputs, equivalent annual costs
were calculated on the basis of the actual price or the current
replacement value.
Five cost categories were defined: wage, equipment,
space, material, and overhead costs.
On the basis of the way they are assigned, costs can be
divided into direct costs (directly traced to the cost objects)
and indirect costs (not directly traceable to the cost objects,
but indirectly allocated using cost drivers).
The only direct costs within a RT process are some
specific material costs, including the costs of fixation masks,
X-ray films, simulation and portal films, and the materials to
produce shielding blocks. Because the use of masks is
standard for certain types of treatments, and because the
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT 525

Table 1. Files of activity-based costing program

File group File Function

Definition files Definition costs Definition of center-specific parameters

Definition activities
Definition products
Activity group files Time activity groups Interim calculations based on defined parameters
Wage activity groups
Space activity groups
Equipment activity groups
Total activity groups
Activities file Cost activities Calculation of treatment-related unit costs
Products file Cost products Calculation of product costs

number of films used and blocks produced per type of RT is
equally defined, their cost can be directly and unequivocally
traced to that specific RT treatment.
The vast majority of the cost inputs of a RT process
(i.e., costs of personnel, equipment, and buildings, re-
mainder of the material costs, and overhead costs) are
consumed during the production of a wide range of
different RT products. It is therefore impossible to trace
directly (a part of) these costs to a specific RT treatment.
Hence, these costs were considered indirect costs and
were allocated to the RT products using cost drivers. For
wage, equipment, and space costs, a stepwise allocation
using the ABC method was used; the nonspecific material
costs and overhead costs were allocated on the basis of
the number of fractions.
taking place in an organization, which activities are associ-
ated with which part of the production process, and how
these activities are linked to the consumption of resources
and the generation of revenues.
In our model, a first global distinction was made between
two groups of activities: treatment-related activities, di-
rectly linked to the delivery of RT; and supporting activities,
supporting the production process and the department but
not linked to specific RT treatments. Figure 3 graphically
shows the further subdivision of these categories into sub-
categories.
Treatment-related activities. Thirty treatment-related ac-
tivities (Table 3), performed in the process of delivering RT
to patients, were defined and aggregated into four treatment-
related activity subcategories:

Activities General activities: performed in each type of RT product

Activities are defined as repetitive actions performed in
the production process of an organization. Because they are
the central components of an ABC system, through which
the indirect resource costs are allocated to the products, the
first prerequisite in the development of an ABC program is
to perform an activity analysis. This identifies all activities
Product-related activities: related to certain types of RT
products
Fractionation-related activities: vary in frequency as a func-
tion of the number of fractions delivered
Field-related activities: vary in frequency as a function of
the number of fields delivered

Table 2. Cost categories by cost type and allocation basis

Cost category Cost input Cost type Allocation basis Amount (€)

Wage costs Reference wage costs Indirect costs Stepwise ABC 2,445,318€
Equipment Equivalent annual costs ⫹ external Indirect costs Stepwise ABC 1,444,944€
costs maintenance contracts ⫹ CRS
Space costs Equivalent annual costs Indirect costs Stepwise ABC 227,453€
Material costs Consumed materials Direct costs Direct assignment 55,863€
Indirect costs Fraction number 52,465€
Overhead costs Hospital* support Indirect costs Fraction number 604,268€
Departmental† support Indirect costs Fraction number Part of rows 1–3, 5
Total 4,830,313€

Abbreviations: ABC ⫽ activity-based costing; CRS ⫽ care-related support (see definition activities); IT ⫽ information technology; FTE
⫽ full-time equivalent.
* Contains overhead costs assigned by hospital to radiotherapy department; costs of nonassigned buildings and equipment, financial costs,
general costs, maintenance costs, and costs of energy were allocated on basis of number of square meters of department; cost of general
coordination and administration, personnel accommodation, the IT department, and industrial medicine were allocated by number of FTE
staff working in department.
†
Contains costs related to departmental support activities (care and non– care-related costs of wage, equipment, space and material); they
are defined within additional steps of ABC program.
526 I. J. Radiation Oncology ● Biology ● Physics Volume 57, Number 2, 2003

Fig. 3. Activity categories of RT department.

The definition of the fractionation- and field-related activi-
ties was judged crucial because of the relation of these com-
ponents to the treatment complexity and the resulting cost.
Supporting activities. Supporting activities included de-
partmental-supporting activities and hospital-supporting ac-
tivities. Departmental-supporting activities were those ac-
tivities performed by personnel of the RT department,
specific to the department but not product specific. They
were further subdivided into care-related support (e.g., on-
cologic case discussions) and non– care-related support
(e.g., research and teaching).
Hospital-supporting activities were those activities per-

Table 3. Treatment-related activities, aggregated into four categories and further subcategories

Category Subcategory Details

General activities First contact Status and/or

multidisciplinary consultation and/or
consultation in other department
Appointment planning
Permanence—file management
Morning discussion
Simulation
Planning Basic planning and
1D planning or
2D planning or
3D planning and
supervision planning
Quality control start
Social work
Discharge
Product-related activities Trial discussion
Mask—immobilization
Preparation therapy Localization and
CT in RT position and
drawing target volume and
discussion of radiotherapy plan
Dietary advice
Psychological advice
Fractionation-related activities Radiotherapy delivery
Weekly follow-up
Weekly chart round
Weekly quality control
Field-related activities Blocks—bolus
In vivo dosimetry
Portal imaging
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT
formed for many or all other departments in the hospital by
personnel not belonging to the RT department. Examples of
such activities include general management, heating and
maintenance, and information technology support. Follow-
ing the practice in the Leuven hospital, the model allocated
part of these global hospital overhead costs to the RT
department on the basis of the number of FTEs and number
of square meters of space.
Non–EBRT activities. Some activities (i.e., consultations,
brachytherapy, and services provided to other RT depart-
ments) were defined as non–EBRT activities. Because these
were irrelevant to the cost of EBRT, they were excluded
from the calculation. However, because these activities
partly consume the same resources as EBRT, their time (and
related resource) consumption had to be defined before
being separated from the rest of the cost calculation.
Products
In this model, a product was defined as any type of RT.
Because the aim was to analyze the resource cost of the
different radiation products delivered in the Leuven radio-
therapy department and to use these cost data in economic
evaluation studies, an aggregate product definition would
have been insufficient. A high level of detail (i.e., products
defined as specific treatments per tumor type) was therefore
used.
The products were organized in large categories per or-
gan system (e.g., cranial RT, breast RT). Within each organ
system, further distinction was made between the different
tumor types, closely related to the specific treatment setups.
If within one tumor type, separate target volumes (e.g.,
primary tumor and locoregional lymph nodes, whole organ
and boost volume) can be both irradiated concomitantly and
consecutively, these different target volumes were defined
as separate products. Moreover, because the resource con-
sumption (and cost) of a target volume (e.g., locoregional
lymph nodes in breast cancer), irradiated separately or in
addition to another volume can differ quite substantially,
two different products were defined in these situations.
Finally, several variables influencing the treatment com-
plexity and therefore potentially also the cost, were taken
into account: number of fractions, number of fields, and
whether a planning CT scan and three-dimensional (3D)
planning was performed.
Cost drivers
Cost drivers are used to allocate indirect costs to prod-
ucts. As mentioned before, our model used three, instead of
two, levels of cost drivers, thus replacing a large diversity of
cost drivers by a straightforward principle of time consump-
tion, weighed by some factors of treatment complexity.
It follows that the definition of the consumed time is the
cornerstone of the calculation model. The time spent per
type of personnel for each activity and per specific product
(e.g., the technologists’ time spent on a simulation of a
tangential breast irradiation) was defined on the basis of
information from time slots (especially for the radiation
527
technologists) and interviews and time calculations (for the
other personnel categories).
First-stage cost drivers: allocation of resource costs to
activity groups. First, wage costs were allocated to the
different activity groups on the basis of the percentage of
time spent per type of personnel to that activity (e.g.,
percentage of yearly technologists’ time spent on
simulation).
The defined time estimates per type of personnel, per
activity, and per product type were used to calculate this
percentage (or proportion) of time per activity group and per
type of personnel, on the basis of the product-mix of the
year under investigation. As an example, the calculation for
the technologists is demonstrated (Table 4):
The time per activity per specific product was multiplied by
the total number of these products delivered in the year
under investigation, resulting in the summed time per
activity group
All the times per activity group of the technologists were
added and augmented with the yearly technologists’ time
spent on care and non– care-related supporting activities
and with the yearly time spent on activities not related to
EBRT
The global summation thus amounts in a total technologists’
time per year, equal to 100%
With the “rule of three,” the proportion of the technologists’
time spent to the different activity groups was then cal-
culated
Knowing the global technologists’ wage costs, the cost for
each activity group, treatment related and supporting and
non-EBRT activities, could then be defined
The same approach was then repeated for the calculation of
the proportional time, and correlated costs, for the different
activity groups and various personnel categories. The sum-
mation of all the personnel costs equals the wage cost per
activity group.
This approach is especially useful for calculating the time
consumption of those personnel categories that have an
irregular time schedule and/or accumulate several activities
within the same time slot. More importantly, it eliminates
the potential problem related to the use of standard time
schedules in which the total time consumption per activity
group may be overestimated (in the case of incomplete
occupation of the personnel) or underestimated (in the case
of a higher workload than predicted on the basis of the
available staff). Without correction, the “idle” time related
to incomplete occupation would be neglected, thus under-
estimating the real cost. In the converse situation, an over-
estimation of the real cost would occur. Because the actual
time consumption of the investigated year was used as the
calculation basis, the calculated cost was corrected for the
productivity of the department during that year.
Second, space costs were allocated to the activities as a
function of the activities taking place in the different rooms.
Because most rooms share their space among different
activities (e.g., the simulation room is used for EBRT and
528 I. J. Radiation Oncology ● Biology ● Physics Volume 57, Number 2, 2003

Table 4. Detailed example of different cost calculation steps performed in allocation of wage costs (time and cost data used were those
for radiation technologists)

Level Treatment Specific time Total time/cost

Activity group
Time
Simulation Tangential breast 80 min ⫻ 319 ⫽ 25.520 min
Bone metastases 70 min ⫻ 177 ⫽ 12.390 min
(APPA, 5 fractions)
Total … — 144,240 min ⫽ 2,404 h
Total yearly time Treatment-related
activities
Simulation 2,404 h
RT delivery 21,170 h
… —
CRS 3.163 h
Non–CRS 2.588 h
Non-EBRT 67 h
Total 34,920 h ⫽ 100%
Proportional time
Simulation 2.404 h/34.920 h 6.88%
Total yearly wage cost
829,994€
Cost
Simulation 829,994€ ⫻ 6.88% 57,139€
Activity
Proportional time
Breast simulation 80 min/144.240 min 0.555 ⫻ 10⫺3
Cost
Breast simulation 0.555 ⫻ 10⫺3 ⫻ 57.139€ 31.7€

Abbreviations: APPA ⫽ antero posterior opposed fields; RT ⫽ radiotherapy; CRS ⫽ care-related support; EBRT ⫽ external beam RT.

brachytherapy simulations, localizations, and making
masks) and other rooms are only used a few hours through-
out the day (e.g., the meeting room) and to integrate the
productivity factor into the calculation, the following ap-
proach was used.
After having defined the activities—treatment-related, as
well as supporting and non-EBRT activities—taking place
within a specific room, these activities were linked to the
“critical personnel” (i.e., the personnel category most
closely related to the use of the room). The calculation of
the proportional space cost was subsequently performed in
analogy with the cost calculation of the wage costs. The
time consumption of all activities performed in a certain
room, on the basis of the critical personnel, was summed.
The proportional time (and thus cost) for each separate
activity could thus be easily calculated.
Third, the equipment costs were allocated using a com-
parable approach, that is by defining the activities per-
formed with a type of equipment and then linking these to
the critical personnel using this equipment.
Second-stage cost drivers: allocation of activity group
costs to activities. This allocation was simply based on the
time consumption of each specific activity per specific prod-
uct and personnel category. As an example, the technolo-
gists’ cost in the simulation of a tangential breast irradiation
was calculated as follows (Table 4). The number of minutes
spent by the technologists on a simulation for tangential
breast irradiation was divided by the total yearly time con-
sumption of technologists for the activity group of simula-
tion. Then, the resulting proportion was multiplied by the
annual simulation cost of the technologists (proportional to
the time technologists yearly spent on simulation).
This calculation was then performed for every type of per-
sonnel, as well as for the building and equipment cost, and
repeated for all treatment-related activities and all products.
Third-stage cost drivers: allocation of activity costs to
products. The final step between the activities and treat-
ment-related product costs was basically a summation of the
different calculated activity cost components. Some factors
correcting for complexity (defined as third-stage cost driv-
ers) were nevertheless introduced in this last step. The
fractionation-related activities were multiplied by the num-
ber of fractions (or weeks) necessary to produce the product
and the field-related activities were multiplied by the num-
ber of fields used in the setup of the treatment.
The addition results in the treatment-related product cost
based on wage, equipment, and space consumption.
Overhead costs. The support costs (both departmental
and hospital support) were allocated to the products in a
single step using a cost driver that was thought to ade-
quately capture the product complexity (i.e., number of
fractions). In other words, each product was assigned a
proportion of the support costs on the basis of the number of
fractions necessary to deliver that product.
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT 529

Table 5. Comparison of costs at activity group level: costs of Twenty-one percent of the activity group costs were
treatment-related, care- and non– care-related departmental related to departmental support activities that could not be
support and non-external beam radiotherapy activities
directly allocated to the specific RT treatment (e.g., research
Cost type Cost (€) % and teaching). About 7% of the wage, equipment, and space
costs of the RT department were used to perform non-EBRT
Treatment-related activities 2,956,848 71.81 activities.
Treatment preparation 923,031 22.42
Simulation 356,872 8.67 Product costs. Table 6 shows the total yearly cost per
Planning 340,099 8.26 organ system. It also presents the percentage of the costs
Quality assurance 213,586 5.19 and products per organ system as a function of the total
Administration 199,859 4.85 costs and total products. The relative index divided the
Treatment delivery 1,620,372 39.35 percentage of the costs by the percentage of the products,
Care-related support activities 318,254 7.73
Non–care-related support activities 566,790 13.76 giving an indication of treatment complexity.
Non–EBRT activities 275,824 6.70 Figures of ⬎100% were found in the relatively more
Total 4,117,716 100 expensive treatments (i.e., that consumed more resources
than expected on the basis of the number of delivered
Abbreviation: EBRT ⫽ external beam radiotherapy.
treatments). This was most clearly seen in organ systems in
which treatments are predominantly curative, with long
Direct costs. The specific material costs (immobilization irradiation schedules (between 6 and 7 weeks) and a boost,
masks, materials used for making shielding blocks, and including secondary simulation and planning, such as head-
X-ray films) were directly assigned to the products using the and-neck and breast RT.
defined consumption of these materials per product. Conversely, if the relative index was ⬍100%, this means
that, on the basis of the production volume, fewer costs
(resources) were consumed than average. Bone and soft-
RESULTS tissue RT, largely composed of palliative treatments that
Cost data of Leuven radiotherapy department combine very short schedules and easy treatment tech-
Resource costs. The distribution of the cost inputs of the niques, were found in this category. Although predomi-
Leuven radiotherapy department were wage costs (52.06%), nantly curative, the cumulative effect of short fractionation
equipment costs (28.48%), hospital overhead costs regimens (between 3 and 4 weeks) and of shorter time slots
(12.51%, of which 9.34% and 3.17%, respectively, were on the treatment machines (because of predominantly
allocated by the number of square meters and FTEs), space APPA irradiations) explain why treatments for patients with
costs (4.71%), and material costs (2.24%). hematologic malignancies are also found to be less costly
Activity costs. Table 5 shows the costs at the activity than the “average” product.
group level, consisting of wage, equipment, and space costs. In Table 7, some specific product costs are shown, as well
The treatment-related activities were organized into the the global costs, as the different components: treatment-
larger categories of treatment preparation, quality assur- related costs (wage, equipment, and space costs and differ-
ance, administration, and treatment delivery. As could be entiating between various subactivities), material costs, and
expected, treatment-related activities consumed the greatest overhead costs (both departmental and hospital support
proportion of the costs (72%), with treatment delivery the costs). As a matter of comparison, the average departmental
most important component. Within treatment preparation, product cost is also shown.
simulation and planning roughly consumed the same Breast treatments were chosen as an example of curative
amount of costs. treatments. A distinction was made between breast and

Table 6. Cost per organ system

Relative
Organ system Total cost (€) Cost (%) Products (%) index

CNS 385,774 8.47 9.21 91.92

Head and neck 619,059 13.59 8.93 152.18
Breast 1,709,988 37.55 25.49 147.27
Lung 358,550 7.87 10.63 74.08
Hematology 126,356 2.77 4.18 66.32
Gastrointestinal 444,878 9.77 9.16 106.66
Urology 298,933 6.56 5.14 127.59
Gynecology 139,370 3.06 3.05 100.25
Bone and soft tissue 471,581 10.35 24.19 42.80
Total 4,554,489

Abbreviation: CNS ⫽ central nervous system.

530 I. J. Radiation Oncology ● Biology ● Physics Volume 57, Number 2, 2003

Table 7. Examples of specific costs per product

Treatment-related costs* (€)

Quality Radiotherapy Material Overhead Total

Product Preparation Simulation Planning assurance Administration delivery Total costs (€) costs (€) costs (€)

Breast
Breast 71 146 157 107 122 966 1567 18 966 2551
Thoracic wall 71 130 171 69 122 966 1528 2 966 2496
Separate IM-MS 114 130 124 88 122 966 1544 12 966 2522
Additional IM-MS 89 100 38 68 4 445 744 12 966 1721
Electron boost 16 66 77 33 35 296 523 2 309 834
Photon boost 16 99 110 71 35 296 626 18 309 953
Lung
Palliative 110 178 110 71 81 396 946 24 386 1356
Involved field 134 398 439 159 165 1264 2559 36 1275 3869
Mediastinum 110 178 439 107 129 898 1866 24 888 2778
Boost 87 157 68 99 35 366 807 36 386 1229
Head and neck
3D-3-field setup 74 315 351 125 128 1449 2442 67 966 3475
Parotid-sparing 230 401 442 143 131 1894 3241 79 966 4286
Boost 3 fields 87 105 63 89 35 551 929 36 386 1351
Boost 4 fields 110 105 63 107 35 729 1149 47 386 1583
Palliative (Gy)
1⫻8 48 127 77 47 33 59 392 24 39 454
4⫻5 95 127 77 59 52 207 618 24 193 835
10 ⫻ 3 95 127 77 71 72 390 833 24 386 1243
Average cost 2575

Abbreviation: IM-MS ⫽ internal mammary and medial supraclavicular lymph node chain.
* Includes wage, equipment, and space costs.

thoracic wall RT, internal mammary and medial supracla-
vicular lymph node chain (IM-MS) RT (treated separately
or in addition to breast or thoracic wall RT) and boosts with
electrons or photons. Breast, thoracic wall, and lymph nodes
were irradiated to 50 Gy in 2-Gy fractions, boosts delivered
a dose of 16 Gy in eight fractions.
All curative intent breast RT sessions cost grossly the
same (i.e., around 2500), irrespective of the setup (breast,
thoracic wall, or separate IM-MS RT). The cost of a breast
boost ranged between 834 and 953. The cost of additional
IM-MS RT was one-third lower than the cost of a separately
irradiated IM-MS. Moreover, because of the specific struc-
ture of the ABC program, an equal amount of overhead
costs was allocated to additional and separate treatments.
Hence, this calculated cost of additional IM-MS might even
be too high; if no overhead cost was allocated to additional
RT treatments, the cost would drop to 756€.
For lung treatment, a palliative fractionation schedule (30
Gy in 3-Gy fractions) was compared with the curative-intent
fractionation (involved field of 66 Gy in 2-Gy fractions and
mediastinal RT to 46 Gy followed by a boost of 20 Gy in
2-Gy fractions). It demonstrated that a palliative schedule
costs about one-third of a curative schedule, in other words,
that the costs correlated well with the number of fractions.
This could obviously be expected, because the model ex-
plicitly defined the number of fractions as a factor of
complexity.
A similar impact of the number of fractions on the cost
was found in the palliative bone schedules (i.e., one fraction
of 8 Gy; 20 Gy in 4-Gy fractions, respectively, without and
with use of an immobilization mask; and 30 Gy in 3-Gy
fractions). It was assumed that each of these RT sessions
was performed with two parallel-opposed fields. Moreover,
a comparable number of fractions translated into a similar
cost, irrespective of the indication. A treatment delivering
10 fractions costs 1242€ in the case of bone metastases and
1356€ for lung treatment.
The curative treatments showed that the complexity of
the treatment preparation (e.g., CT scan in treatment posi-
tion and 3D planning) was of less importance in the total
cost picture. The cost of curative-intent, 3D pulmonary
treatment hovered between 3869 and 4007 and that of 3D
head and neck RT amounted to 4826; the cost of breast RT
(without treatment CT scan) followed by an electron boost
was 3385. If additional IM-MS RT was performed, the total
cost amounted to 5106 or 4141, respectively, with and
without the inclusion of the overhead costs in the latter. The
more complex parotid-sparing approach for head-and-neck
cancer was even more expensive at 5869€.
For most RT, about one-third of the total costs were
consumed by overhead costs. As defined, this proportion
correlated with the number of fractions.
It should be acknowledged that within the model, mean
equipment cost estimates were used, not accounting for the
type of linear accelerator (simple, dual-energy, or MLC) on
which the product was delivered. This decision was taken
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT 531

Table 8. Impact on costs of replacing all actual treatment machines with multileaf accelerators

Baseline After replacement After correction

Variable cost (€) cost (€) cost (€)

Cost inputs
Wage 2,514,702 2,514,702 (0) 2,483,254 (⫺1.3)
Space 227,454 227,454 (0) 227,454 (0)
Equipment 1,375,560 1,719,349 (25) 1,719,349 (25)
Material 108,329 80,441 (⫺25.7) 80,441 (⫺25.7)
Support 605,268 605,268 (0) 601,668 (⫺0.6)
Treatment-related costs
Treatment preparation 923,031 1,000,180 (8.4) 996,828 (8)
Quality assurance 213,586 251,723 (17.9) 248,913 (16.6)
Administration 199,859 201,557 (0.8) 200,297 (0.2)
Treatment delivery 1,620,372 1,852,306 (14.3) 1,833,726 (13.2)
Total 2,956,848 3,305,767 (11.8) 3,279,763 (10.9)
Product costs
Tangential breast 2551 2797 (9.6) 2777 (8.9)
Involved field cerebral 3785 3554 (⫺6.1) 3529 (⫺6.7)
Palliative lung 1356 1481 (9.2) 1471 (8.1)
Bone metastasis 454 494 (8.8) 491 (7.9)
Average cost 2575 2759 (7.1) 2740 (6.4)
Total EBRT cost 4,554,489 4,880,882 (7.4) 4,846,896 (6.4)

Abbreviation: EBRT ⫽ external beam radiotheraphy.

Data in parentheses are percentages of differences in cash.

for practical purposes within the development of the pro-
gram, and also because, except for intensity-modulated ra-
diotherapy (IMRT) of the prostate, there are no absolute
clinical reasons why specific products delivered in our de-
partment should be irradiated on the MLC. That this ap-
proach may, however, yield some distortions in the calcu-
lated product costs is illustrated for the GI and urologic
patient populations.
In our department, these patients are specifically treated
on the more-expensive MLC. The treatment time slots used
on this machine are, however, shorter. As a result, because
the model does not account for the type (and related cost) of
the treatment machines, the cost of GI and urologic RT was
relatively underestimated. In the baseline calculation, both
groups were shown to have resource consumption grossly in
line with the expectations based on the number of delivered
treatments as expressed by a relative index of 107 and 128,
respectively. However, after rerunning the program with
time slots as for a regular linear accelerator, higher relative
costs were calculated (i.e., corresponding index of 114 and
145, respectively). The same finding was observed for the
absolute costs. When using longer time slots, the cost of
coplanar rectal RT, for example, increased from 2747€ to
3119€ or 14%.
Some practical applications of the program
The ABC model can also be used to analyze how costs
are affected by changes in cost inputs, in practice. Some
examples are presented.
Different resource costs. As an example of analyzing how
the introduction of different resource inputs affects the
costs, it was assumed that MLCs, including on-line portal
imaging, would replace standard collimators on the three
non-MLC treatment machines of the department. With
MLC, shorter time slots can be used for some indications,
implying that less technologist time would be needed for
treating the same number of patients. Because the actual
workload is very high, a calculation was also made assum-
ing that the level of staffing for technologists was not
reduced. Table 8 shows the costs and the difference in costs
compared with baseline, without and with correction for a
lower number of needed technologists.
The calculations show that replacing all standard colli-
mators with a MLC, including on-line portal imaging,
would lead to an increase in the annual EBRT costs of 7.4%.
The total equipment costs would increase by 25%
(343,789€) and the material costs would decrease by 25%
(27,888€), because portal films would no longer be used.
After the introduction of reduced treatment time slots in
those RT sessions in which this would be possible, it was
calculated that the technologist staff could be reduced by
(only) 0.74 FTE, while maintaining the same workload as in
the baseline calculation. This represented a decrease in
annual wage cost of 31,448€ and of FTE-related support of
3600€. Hence, these savings would not compensate for the
increased equipment costs.
As expected, the costs of treatment delivery and quality
control would increase by introducing more costly treatment
machines and on-line portal imaging.
For most products, the increase in equipment costs trans-
lated into an increase of product cost. Only for the products for
which the treatment time slots shortened after introducing
MLC, costs conversely decreased. Because, in the Leuven
department, most of the more complex treatments are done on
the MLC, the products for which the actual treatment time slots
(and thus costs) would decrease, would be limited.
532 I. J. Radiation Oncology ● Biology ● Physics
Fig. 4. Variation in cost per patient as a function of department size.
Number of patients. We ran the calculations varying the
number of patients treated per year between 250 and 2500,
while keeping a same product mix as in the original data.
The resource requirements of personnel, equipment, and
space were defined as a function of the number of patients
according to the Belgian accreditation norms (17). The
consumption of overhead was related to the defined num-
bers of FTEs and square meters; the material costs were
varied proportional to the number of patients. Mean unit
resource costs of the Leuven radiotherapy department were
used. As an example, the cost of tangential breast irradiation
is shown in Fig. 4. The variation in cost was similar in all
other situations.
Because the resource requirements of personnel, equip-
ment, and space varied stepwise with the number of patients
(semifixed costs, see “Discussion”), the cost per patient not
only depends on the department size but also on the degree
of use of the available resources. The resulting cost per
patient is the lowest if all available staff and equipment is
used fully. The variability in the costs, as well in absolute
terms as related to the level of excess capacity, was most
obvious in departments treating ⬍1000 new patients annu-
ally. For larger departments, an additional decrease in costs
was observed, although less importantly.
Product mix. In addition to the number of patients treated,
the level of complexity also affects the costs. For example,
the workload associated with treating 1000 patients with
metastatic bone schedules will be lower than the workload
for treating 1000 patients with conformal head-and-neck
RT. It was analyzed how the total annual costs would vary
as a function of a change in product mix, assuming that the
cost per product would remain the same.
The first example analyzed the impact of RT for the
IM-MS. In the baseline data set, 128 patients received
additional IM-MS irradiation. If the IM-MS would have
Volume 57, Number 2, 2003
been irradiated as the standard in all patients treated to the
breast or thoracic wall who did not receive RT to all
locoregional lymph nodes (i.e., a total of 355 patients), the
total department cost would have increased with 390,667€
(or 8.6%). Conversely, under the assumption that no addi-
tional IM-MS would have been delivered, the costs would
have decreased by 4.8% (or 220,288€).
The second example tested the impact of using different
fractionation schedules for the treatment of bone metasta-
ses. Although in the baseline calculations, there was a mix
of different metastatic bone RT schedules, it was subse-
quently assumed that all these patients would undergo RT
with a single fraction of 8 Gy, 5 fractions of 4 Gy, or 10
fractions of 3 Gy. In the first two situations, the departmen-
tal costs would have decreased by 3.8% and 0.5% (or
172,764€ and 24,652€ for the standard use of a single
fraction and 5 fractions, respectively). In the third situation,
it would have increased by 3.1% (138,946€) if 10 fractions
had been the standard.
These simulations demonstrated that the total costs
change proportionally with the complexity of the product
mix. They, however, also assume that the resource con-
sumption proportionally follows the product mix. This is
correct for the material costs, but not for the wage, equip-
ment, and space costs, which vary stepwise with the pro-
duction and product mix.
One could, moreover, assume that, because of budgetary
restrictions, the total costs should remain constant. The
second approach (Table 9) therefore analyzed the effect of
the same changes in product mix under the assumption of
fixed total resources. In this case, the costs per product
decrease if a more complex product mix is delivered. In
other words, more complex products can only be delivered
at the same total costs by increasing productivity.
There is, of course, a limit to increases in productivity,
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT
Table 9. Product costs after change in product mix
Variables Breast (€)
Baseline 2551
IM-MS
Standard IM-MS 2349 (⫺8.6)
No IM-MS 2687 (5.1)
Bone irradiation
8 Gy/8 Gy 2652 (3.8)
20 Gy/4 Gy 2568 (0.7)
30 Gy/3 Gy 2473 (⫺3.2)
Abbreviation: IM-MS ⫽ internal mammary and medial supraclavicular lymph node chain.
Data in parentheses are percentages of change in product cost compared with baseline.
whether as a consequence of the complexity or the number
of patients, that can be accommodated with a certain level of
personnel, equipment, and space. If growth were substan-
tial, additional resources would be needed regardless.
It was calculated that by introducing standard IM-MS
irradiation, the workload of most personnel would increase,
with the largest increase for dosimetrists, technologists, and
mold technicians (6.77%, 5.57%, and 2.99% increase, re-
spectively). The standard use of single fractions for meta-
static bone RT would lead to a 2.95% decrease in the
workload for the technologists and 7.45% for the mold
technicians.
Considering the number of technologist working hours,
this represents a decrease of 937 h (for the change in
palliative practice) and an increase of 1771 h (for the change
in IM-MS practice) yearly, which, assuming optimal pro-
ductivity in the baseline situation, would free 0.58 FTEs or
necessitate 1.09 FTEs extra, respectively. Furthermore, be-
cause most of these technologist hours (i.e., about 85%)
would be devoted to treatment delivery, the former change
would save about 1 h of machine time daily and the latter
would require 2 h extra, using an assumption of three
technologists per treatment machine.
DISCUSSION
Benefits of ABC in RT
Improved insight into departmental costs. The major ad-
vantage of using ABC for cost calculation in RT is that it
yields more accurate costs and gives better insight into the
departmental cost structure.
In line with other literature reports, the Leuven analysis
confirms that the major resource costs of a RT department
are wage and equipment costs (3, 12, 18). The cost analysis
of the different activity groups showed that almost three-
quarters of the total wage, equipment, and space costs were
consumed by patient care, of which treatment delivery rep-
resented the largest part (almost 40%). This is not surpris-
ing, because the delivery of RT is a repetitive process that
consumes important amounts of personnel time and expen-
sive equipment and space. Treatment preparation, also com-
533
1⫻8 Gy 10⫻3 Gy
(€) 5⫻4 Gy (€) (€)
454 835 1243
433 (⫺4.9) 781 (⫺6.9) 1152 (⫺7.8)
467 (2.8) 870 (4) 1303 (4.7)
462 (1.7) 867 (3.7) 1295 (4.1)
455 (0.2) 837 (0.2) 1248 (0.5)
448 (⫺1.3) 815 (⫺2.4) 1207 (⫺2.9)
bining several highly complex and time-consuming activi-
ties of the RT process, consumed 22.42%.
As a consequence of the former observation, the analysis
of the costs per product group showed that long curative
treatments had a higher relative cost compared with those
with shorter curative schedules, which again cost more than
those with predominantly palliative schedules. Also, the
cost of the specific products was determined more by the
length of treatment (i.e., number of fractions and, by exten-
sion, the use of the treatment machine) than by the treatment
complexity as such (e.g., related to more complex planning
using a treatment CT scan). As an example, in our calcula-
tion, three-field 3D prostate RT was not more expensive
than standard tangential breast RT. However, if the treat-
ment complexity also translates into more irradiation fields
and thus longer treatment time slots, the product cost rose
considerably, as for example seen in parotid-sparing head-
and-neck treatments, figuring in the top five of the most
expensive treatments.
These observations are important if we consider the cost
of novel approaches that aim to obtain higher cure rates
and/or diminish (long-term) side effects. From a radiobio-
logic point of view, it was found that, at least in certain
cancer types, cure rates increased by altering the fraction-
ation schedule, which resulted in the delivery of two (or
more) sessions daily for a growing number of patients.
Conformal (CRT) and intensity-modulated radiotherapy
(IMRT) aim to improve outcome by optimizing physical
dose delivery. In both described innovations, the treatment
costs will increase because of longer treatment times. In
hyperfractionation, the cost will increase as a consequence
of the greater number of fractions and in CRT and IMRT
because of the longer treatment time slots.
Analysis of financial implications of resource and prac-
tice changes. The strength of such a detailed cost accounting
program lies not only in the analysis of the actual situation,
but also in the possibility to run simulations on variations in
resources or practice patterns, as described in “Results.”
The example for the changes in resource cost inputs
demonstrated that the greater equipment costs incurred by
replacing all standard machines with MLCs and on-line
534 I. J. Radiation Oncology ● Biology ● Physics
portal imaging were not compensated for by the savings in
material, wage, and support costs. It can therefore be pos-
tulated that the introduction of more complex treatment
techniques using high-tech equipment will inevitably induce
higher costs.
The other examples demonstrated the impact of the work-
load—in terms of the number of patients treated (depart-
ment size) and treatment complexity (product mix)— on the
product cost.
Because of the indivisibility of some resources, large-
scale departments can treat their patients at a lower cost per
case. The treatment cost also depends on the degree of
resource use, with the cost lowest when all additional equip-
ment and staff are fully occupied.
That the product mix is equally important to the specific
product costs was shown by simulating the effect of a more
complex (standard use of IM-MS irradiation for all breast
cancer patients) and a less complex (single fractions in the
palliative treatment of bone metastases) product mix. As
expected, we found that the former practice change would
require extra treatment machine time, and the latter would
liberate machine time. Because these two examples apply to
the most frequent product groups in our department, these
changes in resource needs must be at the outskirts of those
expected by a single practice change. Moreover, they
showed that different changes in practice should be weighed
against each other to estimate their conjunctional effect on
the product mix and resource requirements.
Correction of costs for actual productivity. The Leuven
ABC system used a mixed top-down and bottom-up ap-
proach in the allocation of the semifixed costs (i.e., costs
that vary stepwise with the number of patients) of wage,
equipment, space, and overhead.
A top-down approach divides the total costs of the overall
products. Because the total costs are known and remain
constant, the cost of a product is inversely related to the
production volume (i.e., the cost per product diminishes
with increasing production volume). As such, a top-down
calculation requires exact data on the delivered number of
products, product mix, and relative resource consumption of
the respective products. In a bottom-up approach, con-
versely, the cost of each final product is calculated on the
basis of the activities used. Because the actually delivered
production volume, however, is not necessarily equivalent
to the expected one (on the basis of which the unit cost is
calculated), this might result in higher (or lower) total
(calculated) departmental costs than expected. In other
words, in a bottom-up approach, the total calculated product
costs, with unit costs based on the expected production
volume, do not necessarily coincide with the actual total
departmental input costs.
The Leuven ABC program was mainly designed using
the top-down allocation principle. All costs introduced in
the model were totally allocated to the products. The major
cost driver of the model (i.e., time consumption) was, how-
ever, defined using the bottom-up principle: “how much
time is spent per type of personnel for each activity and per
Volume 57, Number 2, 2003
specific product.” By equaling the total consumed time to
100% and by using percentages of this total time as the cost
driver, the top-down approach was introduced at this level.
Although the presented cost calculation model is by de-
fault post hoc and is unable to calculate the cost of isolated
products, because knowledge of the global departmental
productivity and product mix is required, the major advan-
tage of such a combined top-down and bottom-up approach
lies in the correction of the costs for productivity (i.e.,
account is made for the potential over or under use of
resources). Because semifixed costs remain constant over a
certain range, irrespective of the degree of resource use, a
pure bottom-up calculation would result in an overestima-
tion of the costs in the former situation (as more products
are produced than expected) and an underestimation in the
latter (because the unused resources would not have been
allocated).
The use of such a mixed top-down and bottom-up model
is the major difference between the Leuven ABC calcula-
tion system and some other ABC-like exercises developed
in the field of RT (19, 20), in which the calculation of the
product costs, on the basis of activity consumption, was
solely performed using the bottom-up principle.
Potential drawbacks related to use of presented
ABC model
Model complexity. The precision of an ABC system de-
pends critically on the level of detail of its constituting com-
ponents: the more refined the definition of costs, activities,
products, and cost drivers, the more accurate the resulting cost
calculation. A high level of detail, however, unavoidably trans-
lates into a higher workload (and cost), not only during the
development phase, but also in daily use.
Although the decision to use detailed definitions of con-
sumed resources, performed activities and delivered prod-
ucts—necessary to obtain the accurate cost estimates we
aimed for—might have rendered the Leuven approach too
complex to be practically manageable, this was avoided by
limiting the number of cost drivers. This limitation in cost
drivers was accomplished through the introduction of a third
allocation step between the activity groups and activities.
By doing so, time consumption, weighed by some factors of
treatment complexity, became the main allocation principle,
instead of using a large number of different cost drivers.
Possible distortions. Although the detailed definitions
and multistep allocation principle yielded a refined cost
calculation, some assumptions (use of mean equipment cost
estimates and allocation of overhead costs to the additional
products in a similar way as for the other products) made
during the development of the model, may result in a slight
distortion of the calculated costs.
The impact of these two potential shortcomings is de-
scribed in “Results.” No attempt was made to correct for
them, because this would have rendered the model much
more complex, requiring programmatic adaptations when
applying it to other RT departments.
When adopting such a model for daily practice, however,
 ABC in radiotherapy ● Y. LIEVENS, W. VAN DEN BOGAERT, and K. KESTELOOT
one should be aware of the potentially imbedded distortions
related to the specificity of the model’s design. To estimate the
importance of the distortions on the results, sensitivity analyses
such as the ones described should be performed explicating
how different options will have an impact on the costs.
Is the routine use of ABC practically achievable?
The baseline results and described simulations illustrate
that the use of an ABC model for RT allows one to solve
questions on departmental activity and product costs. It
provides a tool to evaluate the cost implications related to
capital investments or changes in practice patterns. This
knowledge can support the department in planning and
controlling the costs of the services it provides (e.g., by
reducing or eliminating nonessential activities of [nonprof-
itable] treatments or by adjusting the product mix).
Although such a complex cost calculation program may
be demanding in time and resource costs during the devel-
REFERENCES
1. Goddard M, Hutton J. Economic evaluation of trends in cancer
therapy: Marginal or average costs? Int J Technol Asses
Health Care 1991;7:594–603.
2. Goddard M, Maher EJ, Hutton J, et al. Palliative radiothera-
py—Counting the costs of changing practice. Health Policy
1991;17:243–256.
3. Jonsson E. Cost of radiotherapy in Sweden. Acta Oncol 1986;
6(Suppl.):57–71.
4. Atherton L. Reply to the article by Greene on “The cost of
radiotherapy treatments on a linear accelerator.” Br J Radiol
1984;57:106–107.
5. Greene D. The cost of radiotherapy treatments on a linear
accelerator. Br J Radiol 1983;56:189–191.
6. Penn CR. Megavoltage irradiation in a district general hospital
remote from a main oncology center: The Torbay experience.
Clin Oncol R Coll Radiol 1992;4:108–113.
7. Van den Bogaert W. The material infrastructure of the radio-
therapy departments in Belgium: Commission for material
infrastructure of the Belgian Society of Radiotherapy and
Oncology (BVRO-ABRO). Leuven, Belgium: BVRO-ABRO;
1983.
8. Wodinsky HB, Jenkin RDT. The cost of radiation treatment at
an Ontario regional cancer center. Can Med Assoc J 1987;
137:906–909.
9. Drummond MF, O’Brien B, Stoddart GL, et al. Methods for
the economic evaluation of health care programs. 2nd ed.
Oxford: Oxford University Press; 1997.
10. Gold MR, Siegel JE, Russell LB, et al. Cost-effectiveness in
health and medicine. 1st ed. Oxford: Oxford University Press;
1996.
11. Finkler SA. The distinction between costs and charges. Ann
Intern Med 1982;96:102–109.
12. Perez CA, Kobeissi B, Smith BD, et al. Cost accounting in
535
opment phase, once installed, its daily use should not re-
quire too much time and effort.
A periodic (e.g., yearly) checkup should be performed to
adapt the model to the changed input parameters. Most of
these (the number of resources and their costs, the volume
and types of products) are available in guidelines and/or
routinely recorded within most institutions. The time esti-
mates per activity may be more difficult to collect, but
should not vary much from year to year. Moreover, standard
time estimates, available within the department for appoint-
ment planning purposes, may be used instead of in-depth
interviews.
Finally, in the Leuven approach, a rather high level of
detail was chosen, because the aim was to generate very
detailed product costs (21). Within each specific depart-
ment, however, different choices can be made about the
desired accuracy. The less crucial the level of detail, the
lower the workload associated with the data collection nec-
essary for the routine use of such an ABC program.
radiation oncology: A computer-based model for reimburse-
ment. Int J Radiat Oncol Biol Phys 1993;25:895–906.
13. Baker JJ. Activity-based costing and activity-based manage-
ment for health care. 1st ed. Gaithersburg, MD: Aspen Pub-
lishers; 1998.
14. Cooper R. The rise of activity-based costing—Part one: What
is an activity-based cost system? J Cost Management 1988;
Summer:45–54.
15. Lefebvre C, van den Brande A. Activity based costing: een
nieuw boekhoudkundig ABC. In: Theunisse H, editor. Activ-
ity based costing, beleidsgerichte kosteninformatie. 1st ed.
Antwerpen: MAKLU Uitgevers; 1992. p. 17–50.
16. Cooper R. The rise of activity-based costing—Part three: How
many cost drivers do you need, and how do you select them?
J Cost Management 1989;Winter:34 – 46.
17. Koninklijk Besluit van 5 april 1991 tot vaststelling van de
normen waaraan een dienst radiotherapie moet voldoen om te
worden erkend als zware medisch-technische dienst. B. S.
April 17, 1991.
18. Kesteloot K, Lievens Y, van der Schueren E. Improved man-
agement of radiotherapy departments through accurate cost
data. Radiother Oncol 2000;55:251–262.
19. Azoury E. L’Activity based costing: Application au secteur
medico-technique de la radiothérapie des Cliniques Universi-
taires Saint-Luc. Bruxelles, Belgique: Université Catholique
de Louvain, Faculté de Médecine, Ecole de Santé Public;
1999 –2000.
20. Valiquette L, Dunscombe P. The economic characterization of
radiation treatment process within a cancer care program.
Unpublished data.
21. Lievens Y. Cost and economic evaluation in radiotherapy:
Activity-based costing and modeling techniques. PhD thesis.
Leuven: Katholieke Universiteit Leuven, Faculty of Medicine,
Radiation Oncology Department; 2002.