Our approach
What is Time-Driven Activity-Based Costing?
Most healthcare budgets can tell you what was spent. Electronic medical records can tell you what was scheduled and billed. But what neither can tell you is what actually happened between those data points — the time spent preparing for care, the degree of coordination between providers, and the small inefficiencies that compound across every patient encounter.
TDABC was designed to close that gap. Developed for healthcare costing by Kaplan and Porter (2011), it illustrates how time relates to cost and, when combined with information on space, equipment, and materials at the level of individual routine care activities, produces an accurate account of what delivering care actually costs.
That precision is embedded into the services we offer. It makes it possible to understand how clinical time and resources are used — and how they can be used better, both for your staff and for the patients they serve.
Why TDABC?
Traditional costing, while administratively simple, has fallen short in accurately capturing the actual costs of care (Etges et al., 2020). Activity-based costing and TDABC both offer greater precision than conventional methods.
Where activity-based costing estimates resource costs by distributing expenses across predefined workflow activities based on employee-reported time allocations, TDABC expands upon this by treating time as the central cost driver, requiring only two parameters: the unit cost of supplying capacity and the time required to perform each activity (Kaplan and Anderson, 2004). Using TDABC eliminates reliance on rigid, pre-established cost drivers and reduces dependence on repeated staff surveys, improving accuracy and adaptability to changing workflows.
Conventional costing methods average expenses across a service and divide by volume. That works for financial reporting, but it was not built for the kinds of decisions healthcare leaders actually face.
How do we grow a service without overextending the team?
How do we respond when funding models shift?
How do we plan staffing when patient demand changes?
How do we better use the resources we already have?
For those questions, averages do not paint the full picture. TDABC gives organizations activity-level data to answer them with confidence. When you can see exactly where clinical time and resources are going, you can plan service growth sustainably, build funding proposals on real numbers, and make staffing decisions that reflect the actual demands on your team.
In a healthcare environment that increasingly ties funding to demonstrated value, organizations with that clarity are better equipped to act.
The evidence
The research supporting TDABC spans oncology, diabetes care, cardiology, mental health, and long-term care across more than a dozen countries. A 2025 systematic review by Shakya et al. covering 32 studies found that TDABC consistently improved cost accuracy, identified resource waste, and produced findings that teams could act on. In one example from that review, a TDABC analysis of radiation therapy identified a single supply substitution projected to reduce consumable costs by 30%.
Three Canadian studies illustrate this directly.
In Ontario, Sadri et al. (2021) applied TDABC to cataract surgery and found the average procedure cost $545 per patient, with operating room use accounting for the majority of that expense and the facility running at roughly 50% of its potential capacity due to funding constraints.
In British Columbia, Liu et al. (2025) mapped the full cost of care in a cochlear implant program from referral through post-surgical follow-up, identifying the surgical day as the primary cost driver and giving program leads a clearer basis for planning volume growth.
In Quebec, Nabelsi and Plouffe (2024) used TDABC to evaluate a teleconsultation model in long-term care facilities facing staff shortages, recording $113,343 in savings over the pilot period against $25,059 in setup costs.
Across these studies, TDABC surfaces the actual cost of care, step by step, helping organizations see where capacity is constrained and where resources could be redirected into other areas of care.
Costara’s approach
Most healthcare organizations have a sense that their current data is not giving them the full picture. Costara is built to close that gap. We apply a version of TDABC that aligns with your care pathway to deliver a clear, accurate view of your services, your resource use, and where your capacity to serve more patients can grow.
What we build with you is more than a one-time deliverable — it is a working model that your team can use for planning, funding conversations, and service decisions for years to come.
Our analyses are conducted in accordance with established best practices in healthcare micro-costing. The methodological foundation for our work draws on the eight-step TDABC framework developed by Etges et al. (2019) — the most comprehensive standardized guide to implementing TDABC in healthcare settings — as well as the systematic review of TDABC’s application to inpatient management by Etges et al. (2020), which confirmed the method’s consistent contribution to cost accuracy and value-based improvement across diverse surgical and clinical contexts.
Adherence to these frameworks helps ensure our analyses are rigorous, reproducible, and comparable across service lines and institutions.
Your clinical and administrative staff are part of the process from the start, because understanding how care is delivered requires the people who deliver it. The result is analysis grounded in your reality, and a set of tools your team can act on with confidence.
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