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16/12/2025
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In the rapidly evolving healthcare landscape of Abu Dhabi, staying ahead of regulatory requirements—such as the DOH clinical costing standards—is crucial for providers aiming to optimize operations, ensure financial sustainability, and deliver high-quality patient care. At Young & Right, your trusted accounting and tax consultancy, we specialize in guiding healthcare organizations through complex financial frameworks, including accurate clinical and financial data management. One pivotal development is the DOH Clinical Costing Framework, introduced by the Department of Health – Abu Dhabi (DoH). Effective January 2025, this framework represents a significant shift toward standardized, transparent, and data-driven costing practices, with a strong emphasis on the clinical cost data collection process.
Launched in 2024 as part of the broader Clinical Costing and Value-Based Funding Framework Project, the DOH Clinical Costing Framework mandates a uniform approach to collecting, measuring, and reporting clinical costs at the patient level through a robust clinical costing system. This is not merely about compliance—it empowers healthcare providers to make informed decisions that enhance efficiency and value. In this comprehensive post, we explore the framework’s background, principles, methodology, and implementation. Whether you are a hospital administrator, clinic manager, or financial officer, understanding this framework—including the role of a dedicated clinical costing contact person—can transform how you manage costs and resources. At Young & Right, we have helped numerous clients navigate similar regulatory landscapes and are ready to provide tailored advice to ensure seamless compliance with DOH standards.
The DOH Clinical Costing Framework is a regulatory initiative by the Department of Health – Abu Dhabi (DoH) designed to standardize clinical costing across all licensed healthcare providers in the Emirate, aligning with clinical costing standards in Abu Dhabi. At its core, it focuses on accurately capturing the costs associated with patient care by breaking down resources such as staff time, equipment, and supplies—fulfilling the core purpose of clinical costing. Unlike traditional financial accounting, which often aggregates expenses into broad departmental budgets, clinical costing zeroes in on costing products, which are the specific activities such as a surgical procedure, an outpatient consultation, or an inpatient stay—to meet DOH requirements.
The framework was developed through extensive collaboration, including more than 50 stakeholder sessions (Steering Committee meetings, Market Advisory Committees, and technical working groups). These engagements brought together providers, payers, and industry experts to create a system that is both practical and aligned with global standards (e.g., HFMA). The result was three core documents released in November 2024: the Abu Dhabi Clinical Costing Standard (ADCCS), the Abu Dhabi Clinical Costing Guidelines, and the Cost Data Collection Technical Document, detailing the clinical cost data collection’s technical aspects.
Why does this matter? In Abu Dhabi’s increasingly value-based environment, accurate costing data underpins funding models, pricing strategies, and performance improvement. The DOH Clinical Costing Framework enables a shift from volume-based reimbursement (payment tied to service counts) to outcome-based models that reward efficiency and quality. For example, a hospital may discover that a routine procedure costs 20% more than industry benchmarks due to supply chain inefficiencies; with this framework, such insights become actionable, leading to cost savings and better patient outcomes.
At Young & Right, we view the framework as an opportunity rather than a burden. Our costing experts can audit your current systems, map expenses, and prepare DOH submissions—helping you comply and leverage your data for strategic advantage.
The framework stems from Abu Dhabi’s ambition to lead in value-based healthcare by addressing inconsistencies in patient-level cost data. Before its launch, costing practices varied widely, hindering policymaking and funding decisions. The DoH responded with the Clinical Costing and Value-Based Funding Framework Project in 2024, culminating in the current framework that supports robust healthcare cost management.
The primary purpose is to establish a consistent process for gathering accurate cost data through the Abu Dhabi Clinical Cost Data Collection (ADCCDC), ensuring compliance with DOH standards. This data informs:
→ Value-Based Funding:
Moving away from fee-for-service toward payments based on outcomes and efficiency (e.g., incentives for lower readmission rates), highlighting the link between clinical costing standards and value-based funding.
→ Pricing and Policy:
Accurate costs inform fair tariffs that reflect true resource use—vital for negotiations with insurers and government payers.
→ Performance Improvement:
Providers can pinpoint inefficiencies (e.g., overstaffing or underutilized equipment) and implement targeted optimizations.
→ Equity and Transparency:
Standardized data ensures fair allocation of public funds and reduces disparities between large hospitals and smaller clinics.
The Abu Dhabi Clinical Costing Road Map 2025 sets a phased approach, with mandatory annual submissions starting in April 2025 for the prior calendar year (January 1–December 31). This roadmap is more than a timeline; it is a blueprint for building a resilient healthcare ecosystem across facilities providing direct patient care. From our experience, early adopters who integrate this framework into financial planning often see meaningful improvements in operational efficiency within the first year.
Just as competitive businesses rely on cost accounting to price products correctly, providers using the DOH framework can price services accurately—avoiding under-recovery or overcharging—and build stakeholder trust aligned with Abu Dhabi’s vision for world-class healthcare.
The DOH Clinical Costing Framework is essential for healthcare providers across the UAE aiming to ensure compliance and standardize costing processes. This framework is designed for all providers in Abu Dhabi that offer direct patient care. It includes a broad spectrum of facilities, each requiring tailored approaches to align with clinical costing standards and guidelines. Here's how the framework applies to various healthcare care providers:
Hospitals in Abu Dhabi, both inpatient and outpatient services, require complex procedure and diagnostic costing. As part of the clinical costing process, these facilities must track detailed patient-level data, ensuring accurate cost allocations that align with Abu Dhabi’s clinical costing standards. This ensures transparency and supports the clinical costing results by accurately capturing the costs of medical procedures and diagnostics.
Specialist centers, such as day case and day surgery facilities, must be able to cost short-term interventions with precision. These centers rely on clinical costing services and patient-level costing to break down costs related to short-term treatments, ensuring that every procedure is accounted for and compliant with the DOH standards. Through end-to-end clinical costing services, these facilities can effectively manage their costing journey while adhering to costing standards and compliance.
Long-term care facilities, such as rehabilitation centers and nursing homes, focus on ongoing care costs. Implementing clinical costing services here is crucial for tracking patient care over extended periods. These facilities must use patient-level data to highlight cost variances and optimize the care process, ultimately transforming your clinical costing approach to meet DOH compliance. Accurate cost tracking can lead to improved care delivery while managing operational costs.
Stand-alone services such as dialysis centers, IVF clinics, and dental practices are specialized units that need to highlight cost variances at the patient level. Here, clinical costing services provide the structure for costing services and patient-level costing, ensuring that these specialized treatments and services are accurately costed and aligned with DOH clinical costing standards. This also supports healthcare organizations in analyzing treatment costs, enabling better costing results and facilitating costing compliance.
Primary care clinics and centers that manage routine visits and preventive care also need to integrate DOH clinical costing strategies. These settings require a streamlined clinical costing process that captures the cost of daily operations and patient interactions. Costing services provide the framework to monitor costs associated with preventative care, making sure all activities align with clinical costing standards.
Reliability and comparability anchor the DOH Clinical Costing Framework, guided by core principles for patient-level clinical costing:
→ Cost-Center Accounting :
Map expenses to specific cost centers based on managerial responsibility, creating a clear hierarchy from clinical units to support services.
→ Causality :
Match expenses to products and encounters that actually consume resources (e.g., allocate nursing time based on measured patient interaction).
→ Inclusion of Third-Party Costs :
Allocate shared services (e.g., corporate IT/HR) proportionally to reflect true overheads.
→ Exclusion of Non-Expenses :
Omit balance-sheet items, bad debts, and non-patient revenues to focus on operational costs.
→ Data Quality and Auditability :
Document, validate, reconcile, and audit all steps to maintain integrity.
These principles prioritize accuracy, even when processes become more complex. From an accounting perspective, they align with international best practices (e.g., IFRS concepts) applied to healthcare operations. Regular internal audits during transition mitigate common errors, such as misclassifying capital expenditures as operating costs.
The framework outlines a meticulous six-stage methodology to convert raw financial data into actionable patient-level costs. The process is iterative, with validation at each stage.
Extract and classify expenses from the general ledger. Include payroll, supplies, depreciation, and third-party allocations; exclude balance-sheet items, patient charges, and grants. Map items to standardized Cost Types (ADCCS Appendix 1).
Example : AED 500,000 in drug purchases, net of refunds, is classified under “Supplies and Consumables.”
Adjust the general ledger for costing purposes. Classify cost centers as Final Direct (e.g., wards, ORs) or Overhead (e.g., administration, IT). Aggregate direct centers into Cost Buckets (Appendix 2) to simplify reporting without losing traceability.
Distribute overheads to direct centers using statistics (Appendix 3), such as bed-days or IT assets. The Reciprocal method is preferred for accuracy; Step-Down is acceptable for simpler environments. Document all rationales for auditability.
Define outputs of care (Appendix 4)—e.g., inpatient days, imaging scans—and align them with encounter data. Exclude non-patient activities from patient costing.
Assign costs using appropriate drivers: Actual (e.g., specific drug), Duration (e.g., OR minutes), Count (e.g., lab tests), or RVUs for complexity.
Follow the preferred hierarchy : Actual → Duration → Count → RVU. Include all encounters regardless of payer.
Validate with checks in the Guidelines (e.g., Annexures). Reconcile inputs and outputs, attest compliance, and prepare for audits.
This end-to-end process transforms opaque financials into transparent insights. While implementation requires investment, the efficiency gains are substantial. Our pilots often uncover hidden cost leakages that can be addressed quickly.
Costs are categorized as Direct or Overhead. Direct costs are tied to patient care (e.g., physician fees, procedures), while Overhead costs support functions like maintenance and administration.
Salaries and Wages : Nursing, physicians, and administrative staff
Supplies and Consumables : Drugs, devices, and reagents
Facilities and Utilities : Depreciation and utilities
Other : Training and IT licenses
For efficient reporting, cost centers can be grouped (e.g., “Wards”), and Costing Products focus on deliverables such as visits, procedures, and scans.
The allocation of costs is driven by fairness and causality, ensuring each cost is assigned where it truly belongs.
Direct Allocation : Costs are assigned directly to products (e.g., the actual cost of a drug prescribed).
Overhead Allocation : Costs are distributed via statistics. The Reciprocal Method is the most accurate, while Step-Down is simpler.
Patient-Level Allocation : This method tracks true consumption and complexity. For example, Relative Value Units (RVUs) are used for intensive cases, reflecting the level of care provided.
Each of these allocation methods must be documented as per the DOH Clinical Costing Standards and its appendices.
We regularly simulate alternative allocation models to test costing results against financial statements and assess sensitivity before submission. This ensures accuracy and compliance with DOH standards and improves the clinical costing journey for healthcare providers.
Our health costing experts help implement the DOH clinical costing framework efficiently, ensuring that all methods used comply with the required costing standards and provide transparent, reliable results.
Navigating DOH requirements can be complex for healthcare providers across Abu Dhabi. Young & Right helps you implement a standardized clinical costing framework that aligns with DOH clinical costing standards, accelerates your costing journey, and supports sustainable, data-driven decisions for healthcare facilities providing direct patient care—both in Abu Dhabi and across the UAE.
We translate clinical costing standards and guidelines—including DOH technical specs and Shafafiya-aligned rules—into clear workflows. Our team clarifies the relationship between clinical costing services and regulatory reporting, establishing controls that achieve clinical costing compliance and help providers meet DOH expectations without disruption. From hospital patient costing standards to policy updates in the new Abu Dhabi clinical costing framework, we keep you audit-ready.
Every provider is unique. We design fit-for-purpose clinical costing services—from service mapping to cost-driver selection—that reflect your operations. Our methods embed patient-level costing (because patient-level costing involves precise activity and resource capture), unify clinical data with finance, and deliver a complete clinical costing model that scales across Abu Dhabi. Whether you need a light overlay or a full clinical costing solution, we configure what works for your teams.
We operationalize the clinical cost data collection technical requirements end-to-end: data staging, validation, reconciliation, and packaging data to the DOH for error-free DOH submission. We set automated checks, exception queues, and reconciliation logs so submissions are punctual and accurate—freeing staff to focus on care delivery while we manage the technical heavy lifting.
Costing should inform action. We turn numbers into insights that transform your clinical costing—highlighting service-line margins, pathway efficiency, and tariff alignment. Our dashboards connect clinical and financial signals to reveal savings, capacity pinch points, and pricing gaps, enabling healthcare service leaders to make faster, defensible decisions that improve both outcomes and the bottom line.
Compliance isn’t one-and-done. We provide a dedicated clinical costing contact person and a costing lead for governance, reviews, and refresh cycles. As standards evolve, we update your methods, documentation, and controls—sustaining costing and compliance for healthcare providers across Abu Dhabi and beyond. We also train teams on implementation strategies for DOH clinical requirements so improvements stick.
The DOH Clinical Costing Framework is more than regulation—it is a catalyst for innovation in Abu Dhabi’s healthcare ecosystem. By adopting it, providers gain transparency, efficiency, and competitiveness. Implementation can be challenging, but with expert guidance, you can align clinical outcomes with financial sustainability.
Young & Right is committed to your success. We provide costing platforms and hands-on support to implement clinical costing effectively. Our services ensure accurate clinical and financial data, sustained compliance with DOH standards, and measurable operational improvements. Contact us today to navigate the DOH Clinical Costing Framework and turn compliance into opportunity.
Navigate the DOH Clinical Costing Framework seamlessly with Young & Right. Our tailored services ensure accurate data collection, compliance, and enhanced operational efficiency.
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