Objective: Combined with the empirical analysis on Time-Driven Activity-Based Costing (TDABC) of dosage forms for hospital preparation in traditional Chinese medicine hospital，it aimed to discuss on the application of cost accounting and medical insurance decision in public hospitals. Methods: Taking the in-hospital preparation of a public hospital as the cost object，and TDABC is used to calculate the production cost of in-hospital preparations，and provide pricing suggestion according to the cost of in-hospital preparations to propose prices. Results: (1) TDABC of dosage form is beneficial to promote the transformation of the cost accounting results of preparations in traditional Chinese medicine hospitals into the application of Medicare pricing. (2) Decision-making application value and limitations of Time-Driven Activity-Based Costing of dosage form. Conclusion: (1) Strengthen the integration of hospital industry and finance，and promote the construction of all staff costs. (2) Improve the quality of cost information and promote the transformation of cost decision-making applications. (3) Master the mechanism of cost behavior and promote the implementation of budget performance management. (4) Creat a cost governance environment and promoting public welfare governance and high-quality development in public hospitals.