Which statement best describes a benefit of TDABC?

• A. It increases hospital revenue by charging more
• B. It reduces the accuracy of cost data
• C. It ignores patient journey costs
• D. It provides cost transparency and identifies inefficiencies

Answer: (D)

TDABC assigns costs based on the actual time resources spend on activities and follows the patient care journey to map where care occurs. This creates cost transparency by showing the true cost of each step and how work moves through the patient pathway. With that visibility, you can spot bottlenecks, wasted steps, or excessive time on activities, which helps identify inefficiencies and target improvements. Because costs are tied to time and specific activities, TDABC tends to be more accurate than traditional methods that rely on broad allocations. It isn’t about charging more to boost revenue, and it doesn’t ignore the costs incurred along the patient journey. The strongest benefit is the combination of clear cost visibility and the ability to pinpoint inefficiencies for process improvement.