The private health care industry is facing uncertainty and change as a result of the market inquiry being undertaken by the Competition Commission into the private health care industry, the introduction of the National Health Insurance and the possibility of fee regulation. This study seeks to determine the extent to which activity-based costing is used within the operations of private health care facilities in South Africa. A structured online questionnaire was used to collect the primary data; it was completed by 32 private health care facilities and three hospital groups. This study found that the level of activity-based costing adoption at a health care facility level increased from 1.2% in 1994 to 31% in 2013. The increase in the level of activity-based costing adoption indicates that the private health care facilities are willing to adopt and use innovative management tools and techniques to face their current challenges.