Objective Traditional costing systems in hospitals often generate significant cost distortions and fail to reflect the true economic burden of healthcare delivery. To address these limitations, time-driven activity-based costing (TDABC) offers a more accurate and flexible framework by emphasizing the time required to perform each activity. This study used TDABC to estimate the actual cost of rehabilitation services provided at Rofeideh Rehabilitation Hospital, Tehran, Iran, in 2022.
Materials & Methods This is a descriptive retrospective study with a cross-sectional design. The TDABC approach was used to estimate the actual cost of services based on the time spent performing each activity and the cost of consumed resources. After identifying rehabilitation service delivery processes, data on human resources, equipment, physical area, support services, and other operational costs were extracted from the hospital’s financial and administrative units. The capacity cost rate for each resource was calculated based on its practical capacity and annual cost, and the time required to deliver each service was determined through direct observation, document review, and staff interviews. Then, the cost of each rehabilitation service was calculated based on the standard codes in the national relative value book of health services, and the cost of inpatient service packages for patients with different diseases was estimated. Finally, the obtained costs were compared with the public sector tariffs and reimbursement rates of the Iranian Health Insurance Organization.
Results The largest portion of rehabilitation service costs at Rofeideh Rehabilitation Hospital was allocated to human resources, followed by contracted services and consumable materials. For major patient groups, including cerebral palsy, multiple sclerosis, stroke, traumatic brain injury, and spinal cord injury, the reimbursement from the Iranian Health Insurance Organization covered only 79.1%, 86.7%, 83.9%, 81.9%, and 86.3% of the actual service costs, respectively.
Conclusion The findings indicate that insurance reimbursements do not cover the actual cost of rehabilitation services provided at Rofeideh Rehabilitation Hospital. To enhance the financial sustainability of these services, revising tariffs based on the actual costs is essential. At the same time, hospitals should prioritize efficient cost management through optimized resource utilization and inventory control. Expanding outpatient rehabilitation services, including home-based programs, can also be effective in reducing hospital costs.