Cost measurement in value-based healthcare: a systematic review

Evaluation of reporting in time-driven activity-based costing studies on cardiovascular diseases: a scoping review

Aim: This scoping review evaluates the application of the time-driven activity-based costing (TDABC) methodology in cardiovascular disease (CVD) studies. Materials & methods: The evaluation was conducted using the 32-item TDABC Healthcare Consortium Consensus Statement Checklist. A systematic search was performed in Medline, Embase and Scopus in September 2023, including only full-text, peer-reviewed studies reporting the application of TDABC in CVD research. Results: Twenty studies were included in the review. The positive response rate for individual studies ranged from 31 to 81%. The most frequently addressed checklist item was the clear definition of study objectives, while presenting costs per patient included in the analysis was the least reported item. Although 70% of the studies achieved a positive response rate above 50%, adherence to the TDABC checklist remains inconsistent. Conclusion: There is significant room for improvement in the reporting of TDABC methodology in CVD studies. Providing a more comprehensive and standardized description of the methodology would enhance the utility, reproducibility and accuracy of the information generated, supporting the development of evidence-based health policies and improving accountability in healthcare cost assessments.

Supporting managerial decisions: a comparison of new robotic platforms through time-driven activity-based costing within a value-based healthcare framework

BACKGROUND

The advent of novel robotic platforms requires that managers base their decisions on the value these platforms generate. This study showcases how micro-costing methodologies can assist managers in the decision-making process regarding the implementation of new robotic platforms within the value-based healthcare (VBHC) framework.

METHODS

We applied time-driven activity-based costing (TDABC) to evaluate cost disparities between the da Vinci and Hugo robotic systems for robot-assisted radical prostatectomy (RARP). Data were collected from consecutively enrolled patients with organ-confined prostate cancer. Basic cost information was gathered from Azienda Universitaria Integrata di Verona's finance and pharmacy departments. We conducted cost and sensitivity analyses to evaluate the most cost-sensitive parameters.

RESULTS

The da Vinci system incurred higher total costs for RARP than the Hugo system (€4,97.21 vs. € 3,511.73, p-value < 0.001) However, excluding surgical kit costs, the da Vinci platform proved less expensive (€1,481.18 vs. €1,926.18, p-value < 0.001). Sensitivity analyses identified surgical kit costs as the most influential parameter, followed by surgical duration and platform costs.

CONCLUSIONS

This study highlights the importance of micro-costing practices in supporting managerial decisions within a VBHC framework. When clinical outcomes are equivalent, the value of robotic platforms is related to cost savings. By using TDABC and sensitivity analyses, managers can pinpoint critical activities and parameters to optimize the effective adoption of new platforms.

Transforming Healthcare Through Value: A Fiscal Perspective on OECD Countries

Background

Escalating healthcare expenditures pose a significant challenge to global fiscal sustainability. Value-based healthcare offers a strategy to improve health outcomes while controlling costs. This study examines the fiscal impacts of value-based healthcare in OECD countries, providing evidence of its role in enhancing fiscal efficiency.

Methods

This study employs three key approaches. A value-based healthcare index was constructed using the entropy weight method to measure performance across 32 OECD countries from 2000 to 2019. Econometric analysis using panel data models explored the fiscal effects of value-based healthcare. Contextual examination further assessed the interactions between value-based healthcare and factors such as government health expenditure, population aging, and elderly disease burden.

Results

The results show that higher value-based healthcare performance improves budget balance, reduces debt burden, and enhances fiscal sustainability. Interaction effects highlight the importance of government health expenditure and demographic factors in influencing fiscal outcomes.

Conclusion

This study demonstrates the fiscal benefits of value-based healthcare, emphasizing its potential to address healthcare inefficiencies and promote sustainable public finances. Policymakers should integrate value-based healthcare principles into healthcare systems while considering country-specific contexts to maximize long-term impact.

Key Factors in the Implementation of Value-Based Healthcare Performance Evaluation in General Hospitals Healthcare Groups: A Mixed Methodology Study

OBJECTIVE

To identify the principal factors influencing the implementation of high-value healthcare performance evaluation and to examine the interrelationships among these factors.

BACKGROUND

Value-based health care (VBHC) is gaining momentum as a model that focuses on improving patient outcomes. However, there is still a lack of understanding of the multifaceted factors that contribute to its successful implementation.

DESIGN

Theoretical modelling and mixed research methods.

METHODS

First, this study constructed a framework of influencing factors on the implementation of VBHC performance evaluation based on the Technology-Organization-Environment model. Second, a representative set of influencing factors for healthcare performance evaluation was identified. The implementation of performance evaluation was identified based on a literature analysis and a case study in China. Finally, experts were invited to assess the relevance of the aforementioned influencing factors, and the collected data were analysed using Interpretative Structural Model. The PRISMA-ScR checklist guided the reporting of this study.

RESULTS

We initially constructed the theory framework with the objective of categorising and summarising the influential factors and potential problems revealed in the implementation of patient VBHC performance evaluation in general hospitals. Subsequently, 15 key factors were identified through interviews with 10 experts. Then, a six-level hierarchy was developed to construct a visual structure diagram, the purpose of which was to clarify the hierarchy of roles of each influencing factor. Finally, we categorise the influencing factors into four clusters based on their driving power and dependency within the system.

CONCLUSION

The insights from this research will assist hospital managers in identifying and prioritising the key factors that influence high-value healthcare performance.

RELEVANCE TO CLINICAL PRACTICE

This study provides a reliable pathway reference for clinical and nursing performance value enhancement and provides important insights into resource allocation and decision-making for clinical practitioners.

PATIENT OR PUBLIC CONTRIBUTION

No patient or public contribution.

Toward value-based care using cost mining: cost aggregation and visualization across the entire colorectal cancer patient pathway

BACKGROUND

The aim of this study is to develop a method we call "cost mining" to unravel cost variation and identify cost drivers by modelling integrated patient pathways from primary care to the palliative care setting. This approach fills an urgent need to quantify financial strains on healthcare systems, particularly for colorectal cancer, which is the most expensive cancer in Australia, and the second most expensive cancer globally.

METHODS

We developed and published a customized algorithm that dynamically estimates and visualizes the mean, minimum, and total costs of care at the patient level, by aggregating activity-based healthcare system costs (e.g. DRGs) across integrated pathways. This extends traditional process mining approaches by making the resulting process maps actionable and informative and by displaying cost estimates. We demonstrate the method by constructing a unique dataset of colorectal cancer pathways in Victoria, Australia, using records of primary care, diagnosis, hospital admission and chemotherapy, medication, health system costs, and life events to create integrated colorectal cancer patient pathways from 2012 to 2020.

RESULTS

Cost mining with the algorithm enabled exploration of costly integrated pathways, i.e. drilling down in high-cost pathways to discover cost drivers, for 4246 cases covering approx. 4 million care activities. Per-patient CRC pathway costs ranged from $10,379 AUD to $41,643 AUD, and varied significantly per cancer stage such that e.g. chemotherapy costs in one cancer stage are different to the same chemotherapy regimen in a different stage. Admitted episodes were most costly, representing 93.34% or $56.6 M AUD of the total healthcare system costs covered in the sample.

CONCLUSIONS

Cost mining can supplement other health economic methods by providing contextual, sequence and timing-related information depicting how patients flow through complex care pathways. This approach can also facilitate health economic studies informing decision-makers on where to target care improvement or to evaluate the consequences of new treatments or care delivery interventions. Through this study we provide an approach for hospitals and policymakers to leverage their health data infrastructure and to enable real time patient level cost mining.

Patient-level cost analysis of subfertility pathways in the Dutch healthcare system

BACKGROUND

Health economic evaluations require cost data as a key input, and reimbursement policies and systems should incentivize valuable care. Subfertility is a growing global phenomenon, and Dutch per-treatment DRGs alone do not support value-based decision-making because they don't reflect patient-level variation or the impact of technologies on costs across entire patient pathways.

METHODS

We present a real-world micro-costing analysis of subfertility patient pathways (n = 4.190) using time-driven activity-based costing (TDABC) and process mining in the Dutch healthcare system, and built a scalable and granular costing model.

RESULTS

We find that pathways (13.203 treatments, 4.190 patients, 10 years) from referral to pregnancy and birth vary greatly in costs (mean €6.329, maximum €36.976) and duration (mean 25,5 months, maximum 8,59 years), with structural variation within treatments (and DRGs) of up to 65%. Patient-level variation is highest in laboratory phases, and causally related to patients' cycle volume, type, and treatment methods. Large IVF or IVF-ICSI cycles are most common, and most valuable to patients and the healthcare system, but exceed their DRGs significantly (33%). We provide recommendations that reduce costs across patient pathways by €1.3 m in the Netherlands, to support value-based personalized care strategies. These findings are relevant to clinics following European protocols.

CONCLUSIONS

Fertility treatments like IVF feature significant cost variation due to the personalization of treatments, and rapidly evolving laboratory technologies. Incorporating cost granularity at the patient and treatment level (cycle volume, type, method) is critical for decision-making, economic analyses, and policy as both subfertility rates and treatment demand are rising.

Allocation and value of curative oncological treatment in frail and fit older patients with esophageal cancer: An observational cohort study

INTRODUCTION

The Value-Based Health Care (VBHC) model of care provides insights into patient characteristics, outcomes, and costs of care delivery that help clinicians counsel patients. This study compares the allocation and value of curative oncological treatment in frail and fit older patients with esophageal cancer in a dedicated VBHC pathway.

MATERIALS AND METHODS

Data was collected from patients with primary esophageal cancer without distant metastases, aged 70 years or older, and treated at a Dutch tertiary care hospital between 2015 and 2019. Geriatric assessment (GA) was performed. Outcomes included treatment discontinuation, mortality, quality of life (QoL), and physical functioning over a one-year period. Direct hospital costs were estimated using activity-based costing.

RESULTS

In this study, 89 patients were included with mean age 75 years. Of 56 patients completing GA, 19 were classified as frail and 37 as fit. For frail patients, the treatment plan was chemoradiotherapy and surgery (CRT&S) in 68% (13/19) and definitive chemoradiotherapy (dCRT) in 32% (6/19); for fit patients, CRT&S in 84% (31/37) and dCRT in 16% (6/37). Frail patients discontinued chemotherapy more often than fit patients (26% (5/19) vs 11% (4/37), p = 0.03) and reported lower QoL after six months (mean 0.58 [standard deviation (SD) 0.35] vs 0.88 [0.25], p < 0.05). After one year, 11% of frail and 30% of fit patients reported no decline in physical functioning and QoL and survived. Frail and fit patients had comparable mean direct hospital costs (€24 K [SD €13 K] vs €23 K [SD €8 K], p = 0.82).

DISCUSSION

The value of curative oncological treatment was lower for frail than for fit patients because of slightly worse outcomes and comparable costs. The utility of the VBHC model of care depends on the availability of sufficient data. Real-world evidence in VBHC can be used to inform treatment decisions and optimization in future patients by sharing results and monitoring performance over time.

TRIAL REGISTRATION

The study was retrospectively registered at the Netherlands Trial Register (NTR), trial number NL8107 (date of registration: 22-10-2019).

Improvements in technology and the expanding role of time-driven, activity-based costing to increase value in healthcare provider organizations: a literature review

Objective

This study evaluated the influence of technology on accurately measuring costs using time-driven activity-based costing (TDABC) in healthcare provider organizations by identifying the most recent scientific evidence of how it contributed to increasing the value of surgical care.

Methods

This is a literature-based analysis that mainly used two data sources: first, the most recent systematic reviews that specifically evaluated TDABC studies in the surgical field and, second, all articles that mentioned the use of CareMeasurement (CM) software to implement TDABC, which started to be published after the publication of the systematic review. The articles from the systematic review were grouped as manually performed TDABC, while those using CM were grouped as technology-based studies of TDABC implementations. The analyses focused on evaluating the impact of using technology to apply TDABC. A general description was followed by three levels of information extraction: the number of cases included, the number of articles published per year, and the contributions of TDABC to achieve cost savings and other improvements.

Results

Fourteen studies using real-world patient-level data to evaluate costs comprised the manual group of studies. Thirteen studies that reported the use of CM comprised the technology-based group of articles. In the manual studies, the average number of cases included per study was 160, while in the technology-based studies, the average number of cases included was 4,767. Technology-based studies, on average, have a more comprehensive impact than manual ones in providing accurate cost information from larger samples.

Conclusion

TDABC studies supported by technologies such as CM register more cases, identify cost-saving opportunities, and are frequently used to support reimbursement strategies based on value. The findings suggest that using TDABC with the support of technology can increase healthcare value.

A prospective study on direct out-of-pocket expenses of hospitalized patients with acute exacerbation of chronic obstructive pulmonary disease in a Philippine tertiary care center

Chronic obstructive pulmonary disease (COPD) is a frequent cause of morbidity and mortality in the Philippines and majority of the economic burden lies in hospitalizations during an exacerbation. Despite coverage of hospitalization cost with the national health insurance system (Phil-Health) for COPD exacerbations, patients often pay out-of-pocket. This study aimed to determine the demographic characteristics of COPD admissions at a Philippine tertiary care center, Philippine General Hospital, and assess mean cost of hospitalization, and identify predictors of prolonged hospitalization and cost > 20,000 Philippine pesos (Php). A prospective cross-sectional study was conducted for 6 months by chart review. Patients were categorized as charity service patients, that is, with no charged professional fees and free medications and private service patients who pay for their health care services. A total of 43 COPD admissions were included. The average daily cost of hospitalization (at peso-dollar rate of 56) for service patients was at $ 75.89 compared to private service patients at $ 285.71. Demographic characteristics and type of accommodation were not significant predictors of prolonged hospital stay nor hospitalization cost of ≥ $ 357. Accommodation cost and professional fees accounted for majority or 61.6% of the overall cost for private patients, while medications and diagnostic tests were the major or 76.01% contributor to the overall cost for charity patients. Despite existence of Phil-health, in-patient coverage for COPD remain insufficient. Measures for maximizing COPD control in the out-patient setting could potentially reduce total cost for this disease.

A comprehensive value-based method for new nuclear medical service pricing: with case study of radium [223Ra] bone metastases treatment

IMPORTANCE

Innovative nuclear medicine services offer substantial clinical value to patients. However, these advancements often come with high costs. Traditional payment strategies do not incentivize medical institutes to provide new services nor determine the fair price for payers. A shift towards a value-based pricing strategy is imperative to address these challenges. Such a strategy would reconcile the cost of innovation with incentives, foster transparent allocation of healthcare resources, and expedite the accessibility of essential medical services.

OBJECTIVE

This study aims to develop and present a comprehensive, value-based pricing model for new nuclear medicine services, illustrated explicitly through a case study of the radium [223Ra] treatment for bone metastases. In constructing the pricing model, we have considered three primary value determinants: the cost of the new service, associated service risk, and the difficulty of the service provision. Our research can help healthcare leaders design an evidence-based Fee-For-Service (FFS) payment reference pricing with nuclear medicine services and price adjustments.

DESIGN, SETTING AND PARTICIPANTS

This multi-center study was conducted from March 2021 to February 2022 (including consultation meetings) and employed both qualitative and quantitative methodologies. We organized focus group consultations with physicians from nuclear medicine departments in Beijing, Chongqing, Guangzhou, and Shanghai to standardize the treatment process for radium [223Ra] bone metastases. We used a specially designed 'Radium Nuclide [223Ra] Bone Metastasis Data Collection Form' to gather nationwide resource consumption data to extract information from local databases. Four interviews with groups of experts were conducted to determine the add-up ratio, based on service risk and difficulty. The study organized consultation meeting with key stakeholders, including policymakers, service providers, clinical researchers, and health economists, to finalize the pricing equation and the pricing result of radium [223Ra] bone metastases service.

MAIN OUTCOMES AND MEASURES

We developed and detailed a pricing equation tailored for innovative services in the nuclear medicine department, illustrating its application through a step-by-step guide. A standardized service process was established to ensure consistency and accuracy. Adhering to best practice guidelines for health cost data analysis, we emphasized the importance of cross-validation of data, where validated data demonstrated less variation. However, it required a more advanced health information system to manage and analyze the data inputs effectively.

RESULTS

The standardized service of radium [223Ra] bone metastases includes: pre-injection assessment, treatment plan, administration, post-administration monitoring, waste disposal and monitoring. The average duration for each stage is 104 min, 39 min, 25 min, 72 min and 56 min. A standardized monetary value for medical consumables is 54.94 yuan ($7.6), and the standardised monetary value (medical consumables cost plus human input) is 763.68 yuan ($109.9). Applying an agreed value add-up ratio of 1.065, the standardized value is 810.19 yuan ($116.9). Feedback from a consultation meeting with policymakers and health economics researchers indicates a consensus that the pricing equation developed was reasonable and well-grounded.

CONCLUSION

This research is the first study in the field of nuclear medicine department pricing methodology. We introduce a comprehensive value-based nuclear medical service pricing method and use radium[223Ra] bone metastases treatment pricing in China as a case study. This study establishes a novel pricing framework and provides practical instructions on its implementation in a real-world healthcare setting.

How to Use Costs in Value-Based Healthcare: Learning from Real-life Examples

BACKGROUND

Healthcare organizations measure costs for business operations but do not routinely incorporate costs in decision-making on the value of care.

AIM

Provide guidance on how to use costs in value-based healthcare (VBHC) delivery at different levels of the healthcare system.

SETTING AND PARTICIPANTS

Integrated practice units (IPUs) for diabetes mellitus (DM) and for acute myocardial infarction (AMI) at the Leiden University Medical Center and a collaboration of seven breast cancer IPUs of the Santeon group, all in the Netherlands.

PROGRAM DESCRIPTION AND EVALUATION

VBHC aims to optimize care delivery to the patient by understanding how costs relate to outcomes. At the level of shared decision-making between patient and clinician, yearly check-up consultations for DM type I were analyzed for patient-relevant costs. In benchmarking among providers, quantities of cost drivers for breast cancer care were assessed in scorecards. In continuous learning, cost-effectiveness analysis was compared with radar chart analysis to assess the value of telemonitoring in outpatient follow-up.

DISCUSSION

Costs vary among providers in healthcare, but also between provider and patient. The joint analysis of outcomes and costs using appropriate methods helps identify and optimize the aspects of care that drive desired outcomes and value.

High-volume endocrine surgeons perform thyroid surgery at decreased cost despite increased case relative value units

BACKGROUND

Healthcare systems are transitioning to value-based payment models based on analysis of quality over cost. To gain an understanding of the relationship between surgeon volume and health care costs, we compared the direct costs of thyroidectomy performed by dedicated high-volume endocrine surgeons and low-volume surgeons within a large health care system.

METHODS

We evaluated all thyroid surgeries performed within a single billing year at a single health care system. We defined high-volume surgeons as those who treated >50 thyroid cases yearly and compared them to low-volume surgeons. To account for multicomponent procedures, we added the relative value units for the components of the cases. Then, we divided them into low-relative value units, intermediate-relative value units, and high-relative value units groups. We analyzed categorical and continuous variables using the χ2 analysis and Wilcoxon rank sum test, respectively.

RESULTS

We identified 674 thyroidectomy procedures performed by 27 surgeons, of whom 6 high-volume surgeons performed 79% of cases. Relative value unit distribution differed between the groups, with high-volume surgeons performing more intermediate-relative value unit (58% vs 34.7%, P < .01) and high-relative value unit (24.6% vs 20.6%, P < .01) cases, whereas low-volume surgeons performed more low-relative value unit cases (45% vs 17%, P < .01). Overall, high-volume surgeons incurred a 26% reduction in total costs (P < .01) and a 33% reduction in discretionary expenses (P < .01) across all relative value unit groups.

CONCLUSION

High-volume endocrine surgeons perform thyroid procedures at a lower cost than their low-volume counterparts, a difference that is magnified when stratified by relative value unit groups.

Exploring the Economic Aspects of Hospitals: A Comprehensive Examination of Relevant Factors

Financial limitations in the hospital industry have the potential to exacerbate healthcare disparities, impede investments in cutting-edge medical treatments, as well as impair patient outcomes. The interdependent connection between a hospital economy and the general well-being of the community highlights the necessity of careful financial oversight and inventive healthcare policies. Effective collaboration among policymakers, healthcare administrators, and stakeholders is imperative in the development of sustainable economic models that give equal weight to fiscal prudence and optimal patient outcomes. This article aims to underscore the pivotal importance of strategic fund allocation guided by hospital administrators, accentuating several key initiatives capable of revolutionizing healthcare delivery and elevating the institution's stature within the medical community. The other important aspects discussed here are fund allocation in hospitals, the boom of online consultations, and emphasis on the use of sustainable and cost-effective modalities of energy.

Protocol for improving the costs and outcomes of assistive reproductive technology fertility care pathways: a study using cost measurement and process mining

INTRODUCTION

Value-based healthcare suggests that care outcomes should be evaluated in relation to the costs of delivering that care from the perspective of the provider. However, few providers achieve this because measuring cost is considered complex and elaborate and, further, studies routinely omit cost estimates from 'value' assessments due to lacking data. Consequently, providers are currently unable to steer towards increased value despite financial and performance pressures. This protocol describes the design, methodology and data collection process of a value measurement and process improvement study in fertility care featuring complex care paths with both long and non-linear patient journeys.

METHODS AND ANALYSIS

We employ a sequential study design to calculate total costs of care for patients undergoing non-surgical fertility care treatments. In doing so, we identify process improvement opportunities and cost predictors and will reflect on the benefits of the information generated for medical leaders. Time-to-pregnancy will be viewed in relation to total costs to determine value. By combining time-driven, activity-based costing with observations and process mining, we trial a method for measuring care costs for large cohorts using electronic health record data. To support this method, we create activity and process maps for all relevant treatments: ovulation induction, intrauterine insemination, in vitro fertilisation (IVF), IVF with intracytoplasmic sperm injection and frozen embryo transfer after IVF. Our study design, by showing how different sources of data can be combined to enable cost and outcome measurements, can be of value to researchers and practitioners looking to measure costs for care paths or entire patient journeys in complex care settings.

ETHICS AND DISSEMINATION

This study was approved by the ESHPM Research Ethics Review Committee (ETH122-0355) and the Reinier de Graaf Hospital (2022-032). Results will be disseminated through seminars, conferences and peer-reviewed publications.

Transforming Health Care Delivery towards Value-Based Health Care in Germany: A Delphi Survey among Stakeholders

Value-based healthcare (VBC) represents one strategy to meet growing challenges in healthcare systems. To date, VBC is not implemented broadly in the German healthcare system. A Delphi survey was conducted to explore stakeholders' perspectives on the relevance and feasibility of actions and practices related to the implementation of VBC in the German healthcare system. Panellists were selected using purposive sampling. Two iterative online survey rounds were conducted which were preceded by a literature search and semi-structured interviews. After two survey rounds, a consensus was reached on 95% of the items in terms of relevance and on 89% of the items regarding feasibility. The expert panels' responses were in favor of the presented actions and practices of VBC in 98% of items for which consensus was found (n = 101). Opposition was present regarding the relevance of health care being provided preferably in one location for each indication. Additionally, the panel considered inter-sectoral joint budgets contingent on treatment outcomes achieved as not feasible. When planning the next steps in moving towards a value-based healthcare system, policymakers should take into account this study's results on stakeholders' perceptions of the relative importance and feasibility of VBC components. This ensures that regulatory changes are aligned with stakeholder values, facilitating greater acceptance and more successful implementation.