Developing cost containment strategies for soft tissue tumor management using lean principles in hospitals

Abstract

Hospitals in low- and middle-income countries face increasing financial pressure due to discrepancies between reimbursement tariffs and actual service costs. This study aimed to analyze the unit cost and Cost Recovery Rate (CRR) of soft tissue tumor (STT) surgical services at Hospital “X” in Makassar, Indonesia, using Activity-Based Costing (ABC), and to formulate cost containment strategies through a lean management approach. A mixed-methods study with an explanatory sequential design was employed. Quantitative data were used to calculate unit costs and financial performance (CRR), followed by qualitative data collection through observations and in-depth interviews to identify inefficiencies and sources of waste in service delivery. The results showed that the unit cost of STT surgery was IDR 9,045,213 per case, which was lower than the hospital tariff (IDR 15,737,000) but significantly higher than the INA-CBGs reimbursement rate (IDR 4,248,900), resulting in a negative margin of IDR 4,796,313 per procedure. Qualitative findings revealed inefficiencies in service flow, with an average waiting time of 243 minutes. Waiting time was identified as the dominant form of waste, primarily caused by physician delays and weak coordination among surgical teams. STT surgical services at Hospital “X” are financially unsustainable under current reimbursement schemes. The gap between actual costs and INA-CBGs tariffs, combined with operational inefficiencies, contributes significantly to negative financial performance. The study highlights the importance of implementing lean-based cost containment strategies, including waste elimination, improved scheduling coordination, standardized clinical pathways, and workflow redesign. These interventions are essential to enhance operational efficiency, improve cost recovery, and maintain service quality and patient safety in resource-constrained hospital settings.