Cost accounting in the healthcare industry is very labor-intensive to perform accurately without the precise data that activity based cost accounting software for hospitals can provide. The same hospital trying to calculate costs for the same set of patient procedures could get noticeably different results depending on the costing methodology and the sophistication of the tools and methods it utilizes—a variance in cost accounting data accuracy that could negatively impact budgets and reported profits by millions of dollars over time. For a healthcare organization to effectively monitor and report profitability, it’s crucial to have the most accurate cost accounting data possible.

Activity-based costing is considered by most healthcare finance professionals to be the most precise cost accounting method for the unique business of healthcare. Correctly implementing and maintaining a sophisticated approach to healthcare cost accounting does require a significant staff effort compared to simply plugging in cost-to-charge ratios (RCCs), which are not dependable for close margin analysis. Our activity-based cost accounting software for hospitals provides the highest level of cost data accuracy while being drastically simplified and mostly automated with the use of the CostFlex activity-based Procedure-Level Cost Accounting solution.


Hospital activity-based costing is a method of directing all known expenses to the cost components of the specific services that received benefit from the expense dollars. Unlike other costing methodologies that add the hospital’s average overhead expenses per procedure to each service after the fact, activity-based cost accounting in hospitals considers more service-specific factors beforehand, delivering more accurate results for better reporting and making better decisions. Having the ability to correctly align expenses with the work tasks that are unique to patient care, consuming 100% of the known expenses into costs and devoting greater attention to the individual costs associated with each procedure, makes activity-based costing the best decision support accounting method available for hospital financial management today.

Because the CostFlex proprietary solution is designed to align 100% of the monthly GL expenses with the work and procedures that were performed in the same fiscal month, the result is a fully burdened cost accounting data file at the procedure level where, through the use of patient detailed data collected, the costs will accurately and automatically roll up to the patient level to create dependable patient and service line costs. Through easy-to-navigate client interfaces to the CostFlex databases, patient demographics are used to create custom service lines of patients for user-defined reporting of accurate cost accounting data at the patient/service line level. Understanding and trusting the total cost of each procedure helps healthcare facilities comfortably manage their budgets and generate KPIs for cost reduction and control efforts.


The idea of activity-based cost accounting isn’t unique to the healthcare industry, but generic software is unlikely to get the most accurate results for a healthcare provider facility. CostFlex’s activity-based cost accounting software for hospitals was designed specifically for healthcare, and because of that, we deliver the highest cost accounting data accuracy in the market today. Our solution automatically ties a healthcare provider organization’s costing data to its monthly financials, enabling convenient reporting and allowing administrators to keep an eye on their profits and losses throughout the year instead of just once or twice annually.

Product maintenance for our Procedure-Level Cost Accounting solution has the lowest staffing requirement in the healthcare decision support software industry when comparing the sophisticated costing approaches available—our tools run efficiently with minimal input from your staff, reducing your organization’s labor expenses. Regular maintenance and customer support are available to you in perpetuity, and we’ll distribute the latest version of the software each quarter so you’ll always be up to date.


The sooner you have accurate hospital activity-based costing data, the sooner you can identify areas for improvement and start maximizing your profits. CostFlex helps our clients act quickly by completing turnkey software installations, including staff training, in eight weeks or less every time. You’ll be assigned a dedicated project manager that will keep installation moving on schedule and answer any questions that arise during the setup process.


CostFlex’s commitment to excellent customer service goes far beyond the initial installation period. You’ll have ongoing access to our all-star support staff, made up entirely of development programmers with firsthand knowledge of our software solutions (we don’t believe in third-party call centers). Most support issues can be resolved at the time of contact, but if anything needs extra attention, we guarantee a response within 48 hours.


CostFlex’s full suite of healthcare decision support solutions offers everything an organization needs to excel in its market. If you’d like to see our Procedure-Level Cost Accounting solution in operation before signing on with CostFlex, fill out our demo request form. If you aren’t satisfied with our software after making a purchase, you are entitled to a full, unconditional refund for up to three months after installation. Please contact us at your convenience with any questions about our software or services.