Optimization of treatment workflow for 0.35T MR-Linac system

PURPOSE

This study presents a novel and comprehensive framework for evaluating magnetic resonance guided radiotherapy (MRgRT) workflow by integrating the Failure Modes and Effects Analysis (FMEA) approach with Time-Driven Activity-Based Costing (TDABC). We assess the workflow for safety, quality, and economic implications, providing a holistic understanding of the MRgRT implementation. The aim is to offer valuable insights to healthcare practitioners and administrators, facilitating informed decision-making regarding the 0.35T MRIdian MR-Linac system's clinical workflow.

METHODS

For FMEA, a multidisciplinary team followed the TG-100 methodology to assess the MRgRT workflow's potential failure modes. Following the mitigation of primary failure modes and workflow optimization, a treatment process was established for TDABC analysis. The TDABC was applied to both MRgRT and computed tomography guided RT (CTgRT) for typical five-fraction stereotactic body RT (SBRT) treatments, assessing total workflow and costs associated between the two treatment workflows.

RESULTS

A total of 279 failure modes were identified, with 31 categorized as high-risk, 55 as medium-risk, and the rest as low-risk. The top 20% risk priority numbers (RPN) were determined for each radiation oncology care team member. Total MRgRT and CTgRT costs were assessed. Implementing technological advancements, such as real-time multi leaf collimator (MLC) tracking with volumetric modulated arc therapy (VMAT), auto-segmentation, and increasing the Linac dose rate, led to significant cost savings for MRgRT.

CONCLUSION

In this study, we integrated FMEA with TDABC to comprehensively evaluate the workflow and the associated costs of MRgRT compared to conventional CTgRT for five-fraction SBRT treatments. FMEA analysis identified critical failure modes, offering insights to enhance patient safety. TDABC analysis revealed that while MRgRT provides unique advantages, it may involve higher costs. Our findings underscore the importance of exploring cost-effective strategies and key technological advancements to ensure the widespread adoption and financial sustainability of MRgRT in clinical practice.

Assessing the variation and drivers of cost in 1-level lumbar fusion: a time-driven activity-based costing analysis

BACKGROUND CONTEXT

As value-based health care arrangements gain traction in spine care, understanding the true cost of care becomes critical. Historically, inaccurate cost proxies have been used, including negotiated reimbursement rates or list prices. However, time-driven activity-based costing (TDABC) allows for a more accurate cost assessment, including a better understanding of the primary drivers of cost in 1-level lumbar fusion.

PURPOSE

To determine the variation of total hospital cost, differences in characteristics between high-cost and non-high-cost patients, and to identify the primary drivers of total hospital cost in a sample of patients undergoing 1-level lumbar fusion.

STUDY DESIGN/SETTING

Retrospective, multicenter (one academic medical center, one community-based hospital), observational study.

PATIENT SAMPLE

A total of 383 patients undergoing elective 1-level lumbar fusion for degenerative spine conditions between November 2, 2021 and December 2, 2022.

OUTCOME MEASURES

Total hospital cost of care (normalized); preoperative, intraoperative, and postoperative cost of care (normalized); ratio of most to least expensive 1-level lumbar fusion.

METHODS

Patients undergoing a 1-level lumbar fusion between November 2, 2021 and December 2, 2022 were identified at two hospitals (one quaternary referral academic medical center and one community-based hospital) within our health system. TDABC was used to calculate total hospital cost, which was also broken up into: pre-, intra-, and postoperative timeframes. Operating surgeon and patient characteristics were also collected and compared between high- and non-high-cost patients. The correlation of surgical time and cost was determined. Multivariable linear regression was used to determine factors associated with total hospital cost.

RESULTS

The most expensive 1-level lumbar fusion was 6.8x more expensive than the least expensive 1-level lumbar fusion, with the intraoperative period accounting for 88% of total cost. On average. the implant cost accounted for 30% of the total, but across the patient sample, the implant cost accounted for a range of 6% to 44% of the total cost. High-cost patients were younger (55 years [SD: 13 years] vs.63 years [SD: 13 years], p=.0002), more likely to have commercial health insurance (24 out of 38 (63%) vs. 181 out of 345 (52%), p=.003). There was a poor correlation between time of surgery (i.e., incision to close) and total overall cost (ρ: .26, p<.0001). Increase age (RC: -0.003 [95% CI: -0.006 to -0.000007], p=.049) was associated with decreased cost. Surgery by certain surgeons was associated with decreased total cost when accounting for other factors (p<.05).

CONCLUSIONS

A large variation exists in the total hospital cost for patients undergoing 1-level lumbar fusion, which is primarily driven by surgeon-level decisions and preferences (e.g., implant and technology use). Also, being a "fast" surgeon intraoperatively does not mean your total cost is meaningfully lower. As efforts continue to optimize patient value through ensuring appropriate clinical outcomes while also reducing cost, spine surgeons must use this knowledge to lead, or at least be active participants in, any discussions that could impact patient care.

Can Reducing Implant Costs Increase Revenue for Surgically Treated Ankle Fractures: Time-Driven Activity-Based Costing for 1-Year Episode of Care

BACKGROUND

The purpose of this study was to investigate whether decision-making regarding implant selection affects the reimbursement margins for the surgical fixation of ankle fractures.

METHODS

All ankle fractures treated between 2010 and 2017 within a single-insurer database were identified via Current Procedural Terminology codes by review of electronic medical record. Implant cost was determined via the implant record cross-referenced with the single contract institutional charge master database. The Time-Driven Activity-Based Costing (TDABC) technique was used to determine the costs of care during all activities throughout the 1-year episode of care. Statistical analysis consisted of multiple linear regression and goodness-of-fit analyses.

RESULTS

In all, 249 patients met inclusion criteria. Implant costs ranged from $173 to $3944, averaging $1342 ± $751. The TDABC-estimated cost of care ranged from $1416 to $9185, averaging $3869 ± $1384. Finally, the total reimbursed cost of care ranged between $1335 and $65 645, averaging $13 954 ± $9445. The implant costs occupied an estimated 34.7% of the TDABC-estimated cost of care per surgical encounter. Implant cost, as a percentage of the overall TDABC, was estimated as 36.2% in the inpatient setting and 33% in the outpatient setting, which was the second highest percentage behind surgical costs in both settings. We found a significant increase in net revenue of $1.93 for each dollar saved on implants in the outpatient setting, whereas the increase in net revenue per dollar saved of $1.03 approached significance in the inpatient setting.

CONCLUSION

There is a direct relationship between intraoperative decision-making, as evidenced by implant choices, and the revenue generated by surgical fixation of ankle fractures. Intraoperative decision-making that is cognitive of implant cost can facilitate adoption of institutional cost containment measures and prompt increased healthcare value.

LEVEL OF EVIDENCE

Level III: Retrospective cohort study.

Monthly multidisciplinary complex spine conference: a cost-analysis utilizing time-driven activity-based costing

PURPOSE

To understand costs and provide an initial framework associated with conference implementation as it pertains to complication prevention.

METHODS

Team members' time spent on conference preparation, presentation, and follow-up tasks was recorded and averaged to determine the time required to prepare and present one patient. Using 2022 hourly wage rates based on our urban hospital setting, wage values were calculated for each personnel type and applied to their time spent. The total cost of the conference was annualized and calculated from the time spent in the three phases of the conference multiplied by the wage rate. Published data on complication rates and associated costs before and after conference implementation were used to calculate total cost reduction.

RESULTS

With 3 active spine surgeons and 108 patients per year, the total time investment was 104.04 min per patient, costing $21,791 annually. Total RN equivalent value per patient was 5.25 for all three phases. Using a historical model, this multidisciplinary approach for adult spinal deformity reduced complications by 51% at 30 days, resulting in cost savings of $418,518 per year. Thus, the model demonstrates that implementation of this approach resulted in a potential total savings of $396,726/year.

CONCLUSION

Implementing a cost-saving tool for managing complex spinal disorders is a responsibility of the spine team, who should lead a multidisciplinary conference. The combination of TDABC and lean methodology can effectively demonstrate the variable costs associated with this multidisciplinary effort and models provide evidence of potential cost-savings when applied to a multidisciplinary adult spinal deformity conference. These findings should encourage clinicians and administrators to allocate resources to improve patient care by reducing complications and costs.

Time-driven activity-based costing (TDABC) of direct-to-angiography pathway for acute ischemic stroke patients with suspected large vessel occlusion

INTRODUCTION

Direct-to-angiography (DTA) is a novel care pathway for endovascular treatment (EVT) of acute ischemic stroke (AIS) that has been shown to reduce time-to-treatment and improve clinical outcomes for EVT-eligible patients. The institutional costs of adopting the DTA pathway and the many factors affecting costs have not been studied. In this study, we assess the costs and main cost drivers associated with the DTA pathway compared to the conventional CT pathway for patients presenting with AIS and suspected LVO in the anterior circulation.

METHODS

Time driven activity based costing (TDABC) model was used to compare costs of DTA and conventional pathways from the healthcare institution perspective. Process mapping was used to outline all activities and resources (personnel, equipment, materials) needed for each step in both pathways. The cost model was developed using our institutional patient database and average New York state wages for personnel costs. Total, incremental and proportional costs were calculated based on institutional and patient factors affecting the pathways.

RESULTS

DTA pathway accrued additional $82,583.61 (9%) in total costs compared to the conventional approach for all AIS patients. For EVT-ineligible patients, the DTA pathway incurred additional $82,964.37 (76%) in total costs compared to the CT pathway. For EVT eligible patients, the total and per-patient costs were greater in the CT pathway by $380.76 (0.04%) and $5.60 (0.04%) respectively.

CONCLUSION

As the DTA pathway incurred additional $82,964.37 for EVT-ineligible patients, appropriate patient selection criteria are needed to avoid transferring EVT-ineligible patients to the angiography suite.

Surgeon idiosyncrasy is a key driver of cost in arthroscopic rotator cuff repair: a time-driven activity-based costing analysis

BACKGROUND

Delivering high-value orthopedic care requires optimizing value, defined as health outcomes achieved per dollar spent. Published literature is stippled with inaccurate proxies for cost, including negotiated reimbursement rates, fees paid, or listed prices. Time-driven activity-based costing (TDABC) offers a more robust and accurate approach to calculating cost, including shoulder care. In the present study, we sought to determine the drivers of total cost in arthroscopic rotator cuff repair (aRCR) using TDABC.

METHODS

Consecutive patients undergoing aRCR at multiple sites associated with a large urban health care system between January 2019 and September 2021 were identified. Total cost was determined using TDABC methodology. The episode of care was defined by 3 phases: preoperative, intraoperative, and postoperative care. Patient, procedure, rotator cuff tear morphology, and surgeon characteristics were collected. Bivariate analysis was performed across all characteristics between high-cost (top decile) and all other aRCRs. Multivariable linear regression was used to identify the key cost drivers.

RESULTS

In total, 625 aRCRs performed by 24 orthopedic surgeons and 572 aRCRs performed by 13 orthopedic surgeons were included in the bivariate and multivariable linear regression analyses, respectively. By TDABC analysis, total aRCR cost varied 6-fold (5.9×) from least to most costly. Intraoperative costs accounted for 91% of average total cost, followed by preoperative costs and postoperative costs (6% and 3%, respectively). Biologic adjuncts (regression coefficient [RC] 0.54, 95% confidence interval [CI] 0.49-0.58, P < .001) and surgeon idiosyncrasy (RC of highest-cost surgeon 0.50, 95% CI 0.26-0.73, P < .001) were the major cost drivers in aRCR. Patient age, comorbidities, number of rotator cuff tendons torn, and revision surgery were not significantly associated with total cost. The amount of tendon retraction (RC 0.0012, 95% CI 0.000020-0.0024, P = .046), average Goutallier grade (RC 0.029, 95% CI 0.0086-0.049, P = .005), and the number of anchors used (RC 0.039, 95% CI 0.032-0.046, P < .001) were also significantly associated with cost, but with far smaller effect sizes.

DISCUSSION AND CONCLUSION

Episode of care costs vary nearly 6-fold in aRCR and are almost exclusively dictated by the intraoperative phase. Tear morphology and repair technique contribute to cost, although the largest cost drivers of aRCR are the use of biologic adjuncts and surgeon idiosyncrasy, defined as something a surgeon does or does not do that impacts total cost and is not controlled for in the current analysis. Future work should seek to better delineate what these surgeon idiosyncrasies may represent.

Comparison of COVID-19 hospitalization costs across care pathways: a patient-level time-driven activity-based costing analysis in a Brazilian hospital

BACKGROUND

The COVID-19 pandemic raised awareness of the need to better understand where and how patient-level costs are incurred in health care organizations, as health managers and other decision-makers need to plan and quickly adapt to the increasing demand for health care services to meet patients' care needs. Time-driven activity-based costing offers a better understanding of the drivers of cost throughout the care pathway, providing information that can guide decisions on process improvement and resource optimization. This study aims to estimate COVID-19 patient-level hospital costs and to evaluate cost variability considering the in-hospital care pathways of COVID-19 management and the patient clinical classification.

METHODS

This is a prospective cohort study that applied time-driven activity-based costing (TDABC) in a Brazilian reference center for COVID-19. Patients hospitalized during the first wave of the disease were selected for their data to be analyzed to estimate in-hospital costs. The cost information was calculated at the patient level and stratified by hospital care pathway and Ordinal Scale for Clinical Improvement (OSCI) category. Multivariable analyses were applied to identify predictors of cost variability in the care pathways that were evaluated.

RESULTS

A total of 208 patients were included in the study. Patients followed five different care pathways, of which Emergency + Ward was the most followed (n = 118, 57%). Pathways which included the intensive care unit presented a statistically significant influence on costs per patient (p <  0.001) when compared to Emergency + Ward. The median cost per patient was I$2879 (IQR 1215; 8140) and mean cost per patient was I$6818 (SD 9043). The most expensive care pathway was the ICU only, registering a median cost per patient of I$13,519 (IQR 5637; 23,373) and mean cost per patient of I$17,709 (SD 16,020). All care pathways that included the ICU unit registered a higher cost per patient.

CONCLUSIONS

This is one of the first microcosting study for COVID-19 that applied the TDABC methodology and demonstrated how patient-level costs vary as a function of the care pathways followed by patients. These findings can be used to develop value reimbursement strategies that will inform sustainable health policies in middle-income countries such as Brazil.

What Is the Inpatient Cost of Hip Replacement? A Time-Driven Activity Based Costing Pilot Study in an Italian Public Hospital

The emphasis on value-based payment models for primary total hip replacement (THA) results in a greater need for orthopaedic surgeons and hospitals to better understand actual costs and resource use. Time-Driven Activity-Based Costing (TDABC) is an innovative approach to measure expenses more accurately and address cost challenges. It estimates the quantity of time and the cost per unit of time of each resource (e.g., equipment and personnel) used across an episode of care. Our goal is to understand the true cost of a THA using the TDABC in an Italian public hospital and to comprehend how the adoption of this method might enhance the process of providing healthcare from an organizational and financial standpoint. During 2019, the main activities required for total hip replacement surgery, the operators involved, and the intraoperative consumables were identified. A process map was produced to identify the patient's concrete path during hospitalization and the length of stay was also recorded. The total inpatient cost of THA, net of all indirect costs normally included in a DRG-based reimbursement, was about EUR 6000. The observation of a total of 90 patients identified 2 main expense items: the prosthetic device alone represents 50.4% of the total cost, followed by the hospitalization, which constitutes 41.5%. TDABC has proven to be a precise method for determining the cost of the healthcare delivery process for THA, considering facilities, equipment, and staff employed. The process map made it possible to identify waste and redundancies. Surgeons should be aware that the choice of prosthetic device and that a lack of pre-planning for discharge can exponentially alter the hospital expenditure for a patient undergoing primary THA.

A Modification of Time-Driven Activity-Based Costing for Comparing Cost of Telehealth and In-Person Visits

Introduction: Cost studies of telehealth (TH) and virtual visits are few and report mixed results of the economic impact of virtual care and TH. Largely missing from the literature are studies that identify the cost of delivering TH versus in-person care. The objective was to demonstrate a modified time-driven activity-based costing (TDABC) approach to compare weighted labor cost of an in-person pediatric clinic sick visit before COVID-19 to the same virtual and in-person sick-visit during COVID-19. Methods: We examined visits before and during COVID-19 using: (1) recorded structured interviews with providers; (2) iterative workflow mapping; (3) electronic health records time stamps for validation; (4) standard cost weights for wages; and (5) clinic CPT billing code mix for complexity weighs. We examined the variability in estimated time using a decision tree model and Monte Carlo simulations. Results: Workflow charts were created for the clinic before COVID-19 and during COVID-19. Using TDABC and simulations for varying time, the weighted cost of clinic labor for sick visit before COVID-19 was $54.47 versus $51.55 during COVID-19. Discussion: The estimated mean labor cost for care during the pandemic has not changed from the pre-COVID period; however, this lack of a difference is largely because of the increased use of TH. Conclusions: Our TDABC approach is feasible to use under virtual working conditions; requires minimal provider time for execution; and generates detailed cost estimates that have "face validity" with providers and are relevant for economic evaluation.

Cost of cardiac stereotactic body radioablation therapy versus catheter ablation for treatment of ventricular tachycardia

AIMS

To compare the cost of cardiac stereotactic body radiotherapy (SBRT) vs catheter ablation for treating ventricular tachycardia (VT).

BACKGROUND

Cardiac SBRT is a novel way of treating refractory VT that may be less costly than catheter ablation, owing to its non-invasive, outpatient nature. However, the true costs of either procedure are not well described, which could help inform a more appropriate reimbursement for cardiac SBRT than simply cross-indexing existing procedural rates.

METHODS

Process maps were derived for the full patient care cycle of both procedures using time-driven activity-based costing. Step-by-step timestamps were collected prospectively from a 10-patient SBRT cohort and retrospectively from a 59-patient catheter ablation cohort. Individual costs were estimated by multiplying timestamps with capacity cost rates (CCRs) for personnel, space, equipment, consumable, and indirect resources. These were summed into total cost, which for cardiac SBRT was compared with current catheter ablation and single-fraction lung SBRT reimbursements, both potential reference rates for cardiac SBRT.

RESULTS

The direct and total procedural costs of cardiac SBRT ($7,549 and $10,621) were 49% and 54% less than those of VT ablation ($14,707 and $23,225). These costs were significantly different from current reimbursement for catheter ablation ($22,692) and lung SBRT ($6,329). After including hospitalization expenses (≥$15,000), VT ablation cost at least $27,604 more to furnish than cardiac SBRT.

CONCLUSIONS

TDABC can be a helpful tool for assessing healthcare costs, including novel treatment approaches. In addition to its clinical benefits, cardiac SBRT may provide significant cost reduction opportunities for treatment of VT. This article is protected by copyright. All rights reserved.

A Mobile App for the Precise Measurement of Healthcare Provider Activity Times to Support Time-Driven Activity Based Costing Studies

The duration of activities performed by healthcare providers are pivotal to Time-Driven Activity-Based Costing (TDABC) models. This study examines the use of a smartphone mobile application technology to record activity times. This study validates the accuracy of activity times recorded on a smartphone mobile application, dTool, compared to observed length of time recordings in the operating room. For analysis, we performed two one-sided tests for the measurements "Case Start" and "Case End". Equivalence bounds were specified in terms of raw mean difference of 1 min (upper) and -1 min (lower). The total number of comparisons in the observer protocol was 72 (32 "case start" patient comparisons and 40 "case end" patient comparisons measured over 45 individual OR cases). Given equivalence bounds of -1.000 and 1.000 (on a raw scale) and an alpha of 0.05, both equivalence tests were significant: provider and third-party observer protocol presented t(40) = 3.228 and p = < 0.001; observer timing protocol presented t(68.68) = 56.762, p = < 0.001. Conclusions: With this novel smartphone technology, a healthcare provider can reliably self-record activity LoT using dTool while providing patient care. Future TDABC studies incorporating this technology will reduce the potential operational barriers to implementation.

Total Knee Arthroplasty Hospital Costs by Time-Driven Activity-Based Costing: Robotic vs Conventional

Background

Total knee arthroplasty (TKA) represents a major national health expenditure. The last decade has seen a surge in robotic-assisted TKA (roTKA); however, literature on the costs of roTKA as compared to conventional TKA (cTKA) is limited. The purpose of this study was to assess the costs associated with roTKA as compared to cTKA.

Methods

This was a retrospective cohort cost-analysis study of patients undergoing primary, elective roTKA or cTKA from July 2020 to March 2021. Time-driven activity-based costing (TDABC) was used to determine granular costs. Patient demographics, medical/surgical details, and costs were compared.

Results

A total of 2058 TKAs were analyzed (1795 cTKAs and 263 roTKAs). roTKA patients were more often male (50.2% vs 42.3%; P = .016), and discharged home (98.5% vs 93.7%; P = .017), and had longer operating room (OR) time (144.6 vs 130.9 minutes; P < .0001), and lower length of stay (LOS) (1.8 vs 2.1 days; P < .0001). roTKA costs were 2.17× greater for supplies excluding implant (P < .0001), 1.18× for total supplies (P < .0001), 1.12× for OR personnel (P < .0001), and 1.05× for total personnel (P = .0001). Implant costs were similar (P = .076), but 0.98× cheaper for post-anesthesia care unit personnel (P = .018) and 0.84× for inpatient personnel (P < .0001). Overall hospital costs for roTKA were 1.10× more than cTKA (P < .0001).

Conclusion

roTKA had higher total hospital costs than cTKA. Despite a lower LOS, the longer OR time with higher supply and personnel costs resulted in a costlier procedure. Understanding the costs of roTKA is essential when considering the value (ie, outcomes per dollars spent) of this modern technology.

Time-driven activity-based costing as a strategy to increase efficiency: An analyses of interventional coronary procedures

Monitoring the costs is one of the key components underlying value-based health care. This study aimed to evaluate the cost-saving opportunities of interventional coronary procedures (ICPs). Data from 90 patients submitted to elective ICP were evaluated in five Brazilian hospitals. Time-driven activity-based costing, that guides the cost estimates using the time consumed and the capacity cost rates per resource as the data input, was used to assess costs and the time spent over the care pathway. Descriptive cost analyses were followed by a labour cost-saving estimate potentially achieved by the redesign of the ICP pathway. The mean cost per patient varied from $807 to $2639. The length of the procedure phase per patient was similar among the hospitals, while the post-procedure phase presented the highest variation in length. The highest direct cost saving opportunities are concentrated in the procedure phase. By comparing the benchmark service with the most expensive one, it was estimated that redesigning physician practices could decrease 51% of the procedure cost. This application is pioneered in Brazil and demonstrates how detailed cost information can contribute to driving health care management to value by identifying cost-saving opportunities.

Determining variable costs in the acute urolithiasis cycle of care through time-driven activity-based costing

OBJECTIVE

To characterize full cycle of care costs for managing an acute ureteral stone using time-driven activity-based costing.

METHODS

We defined all phases of care for patients presenting with an acute ureteral stone and built an overarching process map. Maps for sub-processes were constructed through interviews with providers and direct observation of clinical spaces. This facilitated calculation of cost per minute for all aspects of care delivery, which were multiplied by associated process times. These were added to consumable costs to determine cost for each specific step and later aggregated to determine total cost for each sub-process. We compared costs of eight common clinical pathways for acute stone management, defining total cycle of care cost as the sum of all sub-processes that comprised each pathway.

RESULTS

Cost per sub-process included $920 for emergency department (ED) care, $1665 for operative stent placement, $2368 for percutaneous nephrostomy tube placement, $106 for urology clinic consultation, $238 for preoperative center visit, $4057 for ureteroscopy with laser lithotripsy (URS), $2923 for extracorporeal shock wave lithotripsy, $169 for clinic stent removal, $197 for abdominal x-ray, and $166 for ultrasound. The lowest cost pathway ($1388) was for medical expulsive therapy, whereas the most expensive pathway ($8002) entailed a repeat ED visit prompting temporizing stent placement and interval URS.

CONCLUSION

We found a high degree of cost variation between care pathways common to management of acute ureteral stone episodes. Reliable cost accounting data and an understanding of variability in clinical pathway costs can inform value-based care redesign as payors move away from pure fee-for-service reimbursement.

Improving efficiency and reducing costs of MRI-Guided prostate brachytherapy using Time-Driven Activity-Based costing

INTRODUCTION

Integrated quality improvement (QI) and cost reduction strategies can help increase value in cancer care. Time-driven activity-based costing (TDABC) is a bottom-up costing tool that measures resource use over the full care cycle. We applied standard QI and TDABC methods to improve workflow efficiency and reduce costs for MRI-guided prostate brachytherapy.

METHODS AND MATERIALS

We constructed process maps of the baseline prostate brachytherapy workflow from initial consultation through one year after treatment. Process maps reflected resources and time required at each step. TDABC costs were calculated by multiplying each process time by the cost per min of the resource(s) used at that step. We then used plan-do-study-act methodology to identify workflow inefficiencies and implement solutions to reduce resource consumption.

RESULTS

The highest cost components at baseline were the operating room (OR) (40%), imaging (8.7%), and consultation (7.6%). Higher-than-expected costs (3%) were incurred during surgery scheduling. After targeted QI initiatives, OR time was reduced from 90 to 70 min, which reduced overall cost by 5%. Personnel task downshifting reduced costs by 10% at consultation and 77% at surgery scheduling. Re-engineering of follow-up protocols reduced costs by 8.4%. Costs under the new workflow decreased by 18.2%.

CONCLUSIONS

TDABC complements traditional QI initiatives by quantifying the highest cost steps and focusing QI initiatives to reduce costs and improve efficiency. As payment reform evolves toward bundled payments, TDABC and QI initiatives will help providers understand, communicate, and improve the value of cancer care.

The Cost of Hip and Knee Revision Arthroplasty by Diagnosis-Related Groups: Comparing Time-Driven Activity-Based Costing and Traditional Accounting

BACKGROUND

Traditional hospital cost accounting (TA) has innate disadvantages that limit the ability to meaningfully measure care pathways and quality improvement. Time-driven activity-based costing (TDABC) allows a meticulous account of costs in primary total joint arthroplasty (TJA). However, differences between TA and TDABC have not been examined in revision hip and knee TJA (rTJA). We aimed to compare total costs of rTJA by the diagnosis-related group (DRG), measured by TDABC vs TA.

METHODS

Overall costs were calculated for rTJA care cycles by DRG for 2 years of financial data (2018-2019) at our single-specialty orthopedic institution using TA and TDABC. Costs derived from TDABC, based on time and resources used, were compared with costs derived from TA based on historical costs. Proportions of implant and nonimplant costs were measured to total TA costs.

RESULTS

Seven hundred ninety-three rTJAs were included in this study, with TA methodology resulting in higher cost estimates. The total cost per DRG 468, rTJA with no comorbidities or complications (CC), DRG 467, rTJA with CC, and DRG 466, rTJA with major CC, estimated by TDABC was 69%, 67%, and 49% of the estimation by TA, respectively. Implant and nonimplant costs represented different proportions between methodologies.

CONCLUSION

Considerable differences exist, as TA estimations were 31%-51% higher than TDABC. The true cost is likely a value between the estimations, but TDABC presents granular and patient-specific cost data. TDABC for rTJA provides valuable bottom-up information on cost centers in the care pathway and, with targeted interventions, may lead to a more optimal delivery of value-based health care.

Variation in the value of total shoulder arthroplasty

BACKGROUND

There is growing interest in maximizing value for patients undergoing discretionary orthopedic surgery but little data to guide improvement efforts. Integrating patient-reported outcomes with time-driven activity-based costing, we explored patient-level variation in the value of total shoulder arthroplasty (TSA) and characterized factors that contribute to this variation.

METHODS

Using our institutional registry, we identified 239 patients undergoing elective primary TSA (anatomic or reverse) between 2016-2017 with minimum 2-year follow-up. We calculated value as 2-year postoperative American Shoulder and Elbow Surgeons Standardized Shoulder Assessment Form (ASES) scores divided by hospitalization time-driven activity-based costs. This number was multiplied by a constant to set the minimum value of TSA to 100. Multivariable linear regression modeling was performed to characterize factors underlying variation in value.

RESULTS

The value of shoulder arthroplasty ranged from 100 to 680, resulting in a variation of 580%. Reverse shoulder arthroplasty was associated with decreased value (79-point decrease vs. anatomic arthroplasty; P < .001; partial R² = 0.089), as were prior ipsilateral shoulder surgery (38-point decrease; P = .002; partial R² = 0.031), more self-reported allergies (4-point decrease per 1-unit increase; P = .029; partial R² = 0.015), diabetes (33-point decrease; P = .045; partial R² = 0.013), and lower preoperative ASES score (0.7-point increase per 1-unit increase; P = .045; partial R² = 0.012).

CONCLUSIONS

We observed wide variation in the value of shoulder arthroplasty that was most strongly associated with procedure type and certain preoperative characteristics (eg, prior shoulder surgery, number of self-reported allergies, diabetes, ASES score). Awareness of these associations is important for implementation of targeted strategies to effectively reduce variation and redirect resources toward higher-value, cost-conscious care.

Activity-Based Costing of Intensity-Modulated Proton versus Photon Therapy for Oropharyngeal Cancer

PURPOSE

In value-based health care delivery, radiation oncologists need to compare empiric costs of care delivery with advanced technologies, such as intensity-modulated proton therapy (IMPT) and intensity-modulated radiation therapy (IMRT). We used time-driven activity-based costing (TDABC) to compare the costs of delivering IMPT and IMRT in a case-matched pilot study of patients with newly diagnosed oropharyngeal (OPC) cancer.

MATERIALS AND METHODS

We used clinicopathologic factors to match 25 patients with OPC who received IMPT in 2011-12 with 25 patients with OPC treated with IMRT in 2000-09. Process maps were created for each multidisciplinary clinical activity (including chemotherapy and ancillary services) from initial consultation through 1 month of follow-up. Resource costs and times were determined for each activity. Each patient-specific activity was linked with a process map and TDABC over the full cycle of care. All calculated costs were normalized to the lowest-cost IMRT patient.

RESULTS

TDABC costs for IMRT were 1.00 to 3.33 times that of the lowest-cost IMRT patient (mean ± SD: 1.65 ± 0.56), while costs for IMPT were 1.88 to 4.32 times that of the lowest-cost IMRT patient (2.58 ± 0.39) (P < .05). Although single-fraction costs were 2.79 times higher for IMPT than for IMRT (owing to higher equipment costs), average full cycle cost of IMPT was 1.53 times higher than IMRT, suggesting that the initial cost increase is partly mitigated by reductions in costs for other, non-RT supportive health care services.

CONCLUSIONS

In this matched sample, although IMPT was on average more costly than IMRT primarily owing to higher equipment costs, a subset of IMRT patients had similar costs to IMPT patients, owing to greater use of supportive care resources. Multidimensional patient outcomes and TDABC provide vital methodology for defining the value of radiation therapy modalities.

The direct costs of coronary CT angiography relative to contrast-enhanced thoracic CT: Time-driven activity-based costing

BACKGROUND

Coronary CT angiography (CCTA) and contrast-enhanced thoracic CT (CECT) are distinctly different diagnostic procedures that involve intravenous contrast-enhanced CT of the chest. The technical component of these procedures is reimbursed at the same rate by the Centers for Medicare and Medicaid Services (CMS). This study tests the hypothesis that the direct costs of performing these exams are significantly different.

METHODS

Direct costs for both procedures were measured using a time-driven activity-based costing (TDABC) model. The exams were segmented into four phases: preparation, scanning, post-scan monitoring, and image processing. Room occupancy and direct labor times were collected for scans of 54 patients (28 CCTA and 26 CECT studies), in seven medical facilities within the USA and used to impute labor and equipment cost. Contrast material costs were measured directly. Cost differences between the exams were analyzed for significance and variability.

RESULTS

Mean CCTA duration was 3.2 times longer than CECT (121 and 37 ​min, respectively. p ​< ​0.01). Mean CCTA direct costs were 3.4 times those of CECT ($189.52 and $55.28, respectively, p ​< ​0.01). Both labor and capital equipment costs for CCTA were significantly more expensive (6.5 and 1.8-fold greater, respectively, p ​< ​0.001). Segmented by procedural phase, CCTA was both longer and more expensive for each (p ​< ​0.01). Mean direct costs for CCTA exceeded the standard CMS technical reimbursement of $182.25 without accounting for indirect or overhead costs.

CONCLUSION

The direct cost of performing CCTA is significantly higher than CECT, and thus reimbursement schedules that treat these procedures similarly undervalue the resources required to perform CCTA and possibly decrease access to the procedure.

Episode-of-Care Costs for Revision Total Joint Arthroplasties by Decadal Age Groups

The demand for revision total joint arthroplasties (rTJAs) is expected to increase as the age of the population continues to rise. Accurate cost data regarding hospital expenses for differing age groups are needed to deliver optimal care within value-based healthcare (VBHC) models. The aim of this study was to compare the total in-hospital costs by decadal groups following rTJA and to determine the primary drivers of the costs for these procedures. Time-driven activity-based costing (TDABC) was used to capture granular hospital costs. A total of 551 rTJAs were included in the study, with 294 sexagenarians, 198 septuagenarians, and 59 octogenarians and older. Sexagenarians had a lower ASA classification (2.3 vs. 2.4 and 2.7; p < 0.0001) and were more often privately insured (66.7% vs. 24.2% and 33.9%; p < 0.0001) as compared to septuagenarians and octogenarians and older, respectively. Sexagenarians were discharged to home at a higher rate (85.3% vs. 68.3% and 34.3%; p < 0.0001), experienced a longer operating room (OR) time (199.8 min vs. 189.7 min and 172.3 min; p = 0.0195), and had a differing overall hospital length of stay (2.8 days vs. 2.7 days and 3.6 days; p = 0.0086) compared to septuagenarians and octogenarians and older, respectively. Sexagenarians had 7% and 23% less expensive personnel costs from post-anesthesia care unit (PACU) to discharge (p < 0.0001), and 1% and 24% more expensive implant costs (p = 0.077) compared to septuagenarians and octogenarians and older, respectively. Sexagenarians had a lower total in-hospital cost for rTJAs by 0.9% compared to septuagenarians but 12% more expensive total in-hospital costs compared to octogenarians and older (p = 0.185). Multivariate linear regression showed that the implant cost (0.88389; p < 0.0001), OR time (0.12140; p < 0.0001), personnel cost from PACU through to discharge (0.11472; p = 0.0007), and rTHAs (−0.03058; p < 0.0001) to be the strongest associations with overall costs. Focusing on the implant costs and OR times to reduce costs for all age groups for rTJAs is important to provide cost-effective VBHC.

The cost of metastatic prostate cancer using time-driven activity-based costing

OBJECTIVE

To estimate the cost of metastatic prostate cancer (mPC) treatment using the time-driven activity-based costing (TDABC) method from the perspective of a philanthropic hospital in the Brazilian public health system (PHS) and to identify determinants of costs.

METHODS

We used data from patients who received docetaxel chemotherapy in the Brazilian PHS from September 2012 to May 2017. Direct medical costs were estimated with the TDABC microcosting method, taking into account the multiple departments and services the patients interacted with during their oncological treatment.

RESULTS

The median overall survival of the forty-three patient sample was 1.8 years (95% CI 1.45-2.30), and the total cost of the sample was BRL 917.005 (USD 250,878). The median monthly cost per patient was BRL 20.201 (USD 5,526). The end-of-life cost per patient using the TDABC method was BRL 5.151 (USD 1,409). Patients who had received previous treatment at the center registered the lowest cost for hospitalizations and exams, suggesting an opportunity to better manage healthcare resources.

CONCLUSIONS

This is the first study on the economic burden of mPC in the Brazilian PHS using the TDABC costing evaluation method. Accurate cost information obtained with the TDABC can be helpful in guiding disease management to guarantee better use of ever-scarcer resources.

Utilizing Time-Driven Activity-Based Costing to Increase Efficiency in Ultrasound-Guided Breast Biopsy Practice

PURPOSE

In this study, we used time-driven activity-based costing to increase efficiency in our ultrasound-guided breast biopsy practice by understanding costs associated with this procedure.

METHODS

We assembled a multidisciplinary team of all relevant stakeholders involved in ultrasound-guided breast biopsies, including a radiologist, a lead technologist, a clinical assistant, a licensed practical nurse, and a procedural support assistant. The team mapped each step in an ultrasound-guided breast biopsy from the time of scheduling a biopsy to patient checkout. We completed on average 20 time observations of each step involved in these biopsies from a provider's perspective. Using capacity cost rate, we calculated the cost of all resources including personnel, supply, room, and equipment costs. Several costly steps were identified in the process, which led to the intervention of changing our overlapping biopsy times to staggered biopsy times. Time observations for each step and cost calculations were repeated postintervention.

RESULTS

Our postintervention data showed that the total time spent by the radiologist in an ultrasound breast biopsy decreased by 28%, accounting for 56% of the total cost in comparison with 63% pre-intervention. The radiologist's wait time decreased by 38%, accounting for 28% of the total cost in comparison with 35% pre-intervention. Our total cost of the procedure decreased by 20%, and the personnel cost decreased by 25%.

CONCLUSIONS

Time-driven activity-based costing is a practical way to calculate costs and identify non-value-added steps, which can foster strategies to improve efficiency and minimize waste.

Differences in Hospital Costs among Octogenarians and Nonagenarians Following Primary Total Joint Arthroplasty

The proportion of patients over the age of 90 years continues to grow, and the anticipated demand for total joint arthroplasty (TJA) in this population is expected to rise concomitantly. As the country shifts to alternative reimbursement models, data regarding hospital expenses is needed for accurate risk-adjusted stratification. The aim of this study was to compare total in-hospital costs following primary TJA in octogenarians and nonagenarians, and to determine the primary drivers of cost. This was a retrospective analysis from a single institution in the U.S. We used time-drive activity-based costing (TDABC) to capture granular total hospital costs for each patient. 889 TJA’s were included in the study, with 841 octogenarians and 48 nonagenarians. Nonagenarians were more likely to undergo total hip arthroplasty (THA) (70.8% vs. 42.4%; p < 0.0001), had higher ASA classification (2.6 vs. 2.4; p = 0.049), and were more often privately insured (35.4% vs. 27.8%; p = 0.0001) as compared to octogenarians. Nonagenarians were more often discharged to skilled nursing facilities (56.2% vs. 37.5%; p = 0.0011), experienced longer operating room (OR) time (142 vs. 133; p = 0.0201) and length of stay (3.7 vs. 3.1; p = 0.0003), and had higher implant and total in-hospital costs (p < 0.0001 and 0.0001). Multivariate linear regression showed implant cost (0.700; p < 0.0001), length of stay (0.546; p < 0.0001), and OR time (0.288; p < 0.0001) to be the strongest associations with overall costs. Primary TJA for nonagenarians was more expensive than octogenarians. Targeting implant costs, length of stay, and OR time can reduce costs for nonagenarians in order to provide cost-effective value-based care.

A standardized framework to evaluate the quality of studies using TDABC in healthcare: the TDABC in Healthcare Consortium Consensus Statement

BACKGROUND

This Consensus Statement introduces a standardized framework, in a checklist format, to support future development and reporting of TDABC studies in healthcare, and to encourage their reproducibility. Additionally, it establishes the first formal networking of TDABC researchers through the creation of the TDABC in Healthcare Consortium.

METHODS

A consensus group of researchers reviewed the most relevant TDABC studies available in Medline and Scopus databases to identify the initial elements of the checklist. Using a Focus Group process, each element received a recommendation regarding where in the scientific article section it should be placed and whether the element was required or suggested. A questionnaire was circulated with expert researchers in the field to provide additional recommendations regarding the content of the checklist and the strength of recommendation for each included element.

RESULTS

The TDABC standardized framework includes 32 elements, provides recommendations where in the scientific article to include each element, and comments on the strength of each recommendation. All 32 elements were validated, with 21 elements classified as mandatory and 11 as suggested but not mandatory.

CONCLUSIONS

This is the first standardized framework to support the development and reporting of TDABC research in healthcare and to stablish a community of experts in TDABC methodology. We expect that it can contribute to scale strategies that would result in cost-savings outcomes and in value-oriented strategies that can be adopted in healthcare systems and institutions.

Time-Driven Activity-Based Costing: A Better Way to Understand the Cost of Caring for Hip Fractures

Geriatric hip fractures are a common and costly injury. They are expected to surge in incidence and economic burden as the population ages. With an increasing financial strain on the healthcare system, payors and providers are looking toward alternative, value-based models to contain costs. Value in healthcare is the ratio of outcomes achieved over costs incurred, and can be improved by reducing cost while maintaining or improving outcomes, or by improving outcomes while maintaining or reducing costs. Therefore, an understanding of cost, the denominator of the value equation, is essential to value-based healthcare. Because traditional hospital accounting methods do not link costs to conditions, there has been little research to date on the costs of treating geriatric hip fractures over the entire cycle of care. The aim of this article is to summarize existing costing methodologies, and in particular, to review the strengths and limitations of Time-Driven Activity-Based Costing (TDABC) in orthopaedic trauma, especially as it pertains to the needs and challenges unique to hip fracture care. TDABC determines costs at the patient-level over the entire care cycle, allowing for population variability, while simultaneously identifying cost drivers that might inform risk-stratification for future alternative payment models. Through process mapping, TDABC also reveals areas of variation or inefficiency that can be targeted for optimization, and empowers physicians by focusing on costs in the control of the provider. Although barriers remain, TDABC is well-positioned to provide transparent costing and targets to improve the value of hip fracture care.

Restricting Daily Chest Radiography in the Intensive Care Unit: Implementing Evidence-Based Medicine to Decrease Utilizationt

Purpose

In this study, the authors applied evidence-based medicine to decrease the utilization of routine chest radiography in adult intensive care units and used time-driven activity-based costing to demonstrate cost savings.

Methods

A multidisciplinary team was formed with representatives from radiology, surgery, internal medicine, and nursing. The process of performing a portable chest radiographic examination was mapped, and time trials were performed by the radiology technologists and radiology resident. This information was used to determine the cost of performing portable intensive care unit (ICU) chest radiographic studies. The clinical team changed resident education, ordering protocols, and workflows to discontinue the use of routine daily chest radiography, emphasizing that it should be ordered only in specific situations, such as on admission or after central line placement. In addition, as a balancing measure, the team tracked complications such as unplanned extubations and ventilator days.

Results

Changing ordering practices in the adult ICUs to align with established evidence-based guidelines resulted in a 37% decrease in the utilization of portable chest radiography between June and December, without a concomitant increase in unplanned extubations or ventilator days. In addition, a proportionate cost savings was realized, as demonstrated by the application of time-driven activity-based costing.

Conclusions

This performance improvement initiative successfully increased the value of care delivered to ICU patients by aligning institutional clinical practice with evidence-based medicine. This resulted in decreased utilization and the cost associated with delivering care without a concomitant increase in complications.

Evaluating single-institution resource costs of consolidative radiotherapy for oligometastatic non-small cell lung cancer using time-driven activity-based costing

•

Consolidative radiotherapy (RT) has been shown to improve overall survival in oligometastatic non-small cell lung cancer (NSCLC).

•

We quantified the costs of RT in oligometastatic NSCLC, by applying time-driven activity-based costing (TDABC).

•

This analysis uses TDABC to estimate the relative internal costs of various RT strategies associated with treating oligometastatic NSCLC.

•

This methodology will become increasingly relevant in context of the anticipated mandate of alternative/bundled payment models.

Background:

Consolidative radiotherapy (RT) has been shown to improve overall survival in oligometastatic non-small cell lung cancer (NSCLC), as demonstrated by a growing number of prospective trials.

Objective:

We quantified the costs of delivery of consolidative RT for common clinical pathways associated with treating oligometastatic NSCLC, by applying time-driven activity-based costing (TDABC) methodology.

Methods:

Full cycle costs were evaluated for 4 consolidative treatment regimens: (Regimen #1) 10-fraction 3D conformal radiation therapy (3D-CRT) as palliation of a distant site; (#2) 15-fraction intensity-modulated RT (IMRT) to the primary thoracic disease; (#3) 15-fraction IMRT to the primary plus 4-fraction stereotactic ablative radiotherapy (SABR) to a single oligometastatic site; and (#4) 15-fraction IMRT to the primary plus two courses of 4-fraction SABR for two oligometastatic sites.

Results:

For each of the four treatment regimens, personnel represented a greater proportion of total cost when compared with equipment, totaling 61.0%, 65.9%, 66.2%, and 66.4% of the total cost of each care cycle, respectively. In total, a 10-fraction regimen of 3D-CRT to a distant site represented just 37.2% of the total cost of the most expensive course. Compared to total costs for 15-fraction IMRT alone, each additional sequential course of 4-fraction SABR imparted a cost increase of 43%.

Conclusion:

This analysis uses TDABC to estimate the relative internal costs of various RT strategies associated with treating oligometastatic NSCLC. This methodology will become increasingly relevant to each organization in context of the anticipated mandate of alternative/bundled payment models for radiation oncology by the Centers for Medicare and Medicaid Services.

Advances in Value-Based Healthcare by the Application of Time-Driven Activity-Based Costing for Inpatient Management: A Systematic Review

OBJECTIVES

Implementation of value-based initiatives depends on cost-assessment methods that can provide high-quality cost information. Time-driven activity-based costing (TDABC) is increasingly being used to solve the cost-information gap. This study aimed to review the use of the TDABC methodology in real-world settings and to estimate its impact on the value-based healthcare concept for inpatient management.

METHODS

This systematic review was conducted by screening PubMed/MEDLINE and Scopus databases following Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines, including all studies up to August 2019. The use of TDABC for inpatient management was the main eligibility criterion. A qualitative approach was used to analyze the different methodological aspects of TDABC and its effective contribution to the implementation of value-based initiatives.

RESULTS

A total of 1066 studies were retrieved, and 26 full-text articles were selected for review. Only studies focused on surgical inpatient conditions were identified. Most of the studies reported the types of activities on a macrolevel. Professional and structural cost variables were usually assessed. Eighteen studies reported that TDABC contributed to value-based initiatives, especially cost-saving findings. TDABC was satisfactorily applied to achieve value-based contributions in all the studies that used the method for this purpose.

CONCLUSIONS

TDABC could be a strategy for increasing cost accuracy in real-world settings, and the method could help in the transition from fee-for-service to value-based systems. The results could provide a clearer idea of the costs, help with resource allocation and waste reduction, and might support clinicians and managers in increasing value in a more accurate and transparent way.

Health Facility Cost of Cesarean Delivery at a Rural District Hospital in Rwanda Using Time-Driven Activity-Based Costing

Objective To determine the health facility cost of cesarean section at a rural district hospital in Rwanda. Methods Using time-driven activity-based costing, this study calculated capacity cost rates (cost per minute) for personnel, infrastructure and hospital indirect costs, and estimated the costs of medical consumables and medicines based on purchase prices, all for the pre-, intra- and post-operative periods. We estimated copay (10% of total cost) for women with community-based health insurance and conducted sensitivity analysis to estimate total cost range. Results The total cost of a cesarean delivery was US$339 including US$118 (35%) for intra-operative costs and US$221 (65%) for pre- and post-operative costs. Costs per category included US$46 (14%) for personnel, US$37 (11%) for infrastructure, US$109 (32%) for medicines, US$122 (36%) for medical consumables, and US$25 (7%) for hospital indirect costs. The estimated copay for women with community-based health insurance was US$34 and the total cost ranged from US$320 to US$380. Duration of hospital stay was the main marginal cost variable increasing overall cost by US$27 (8%). Conclusions for Practice The cost of cesarean delivery and the cost drivers (medicines and medical consumables) in our setting were similar to previous estimates in sub-Saharan Africa but higher than earlier average estimate in Rwanda. The estimated copay is potentially catastrophic for poor rural women. Investigation on the impact of true out of pocket costs on women's health outcomes, and strategies for reducing duration of hospital stay while maintaining high quality care are recommended.

Activity-Based Costing and Time-Driven Activity-Based Costing for Assessing the Costs of Cancer Prevention, Diagnosis, and Treatment: A Systematic Review of the Literature

BACKGROUND

A review of the literature on economic analyses in cancer (prevention, diagnosis, and treatment) using activity-based costing (ABC) or time-driven activity-based costing (TDABC) for measuring costs and to examine how these approaches have been applied to assess and manage cancer costs.

METHODS

This review followed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) statement. We conducted a search for studies that used ABC or TDABC to calculate the cost of cancer in prevention, diagnosis, and treatment. Only English- and Portuguese-language articles were retrieved from Medline, Lilacs, ScieLO, and Embase (January 1990 to August 2016).

RESULTS

In total, 421 studies were evaluated. However, only 27 papers were included. The first publications were from the early 2000s, but most of the studies were published in 2016 (n = 10). Most of the studies were carried out in the United States (n = 6) and Belgium (n = 6). Cancer treatment was the major focus of all studies (n = 20), followed by screening programs evaluations (n = 4) and diagnosis (n = 3). Among treatment modalities, economic analysis of radiotherapy was the most common topic of study. Retrospective clinical data represented 57.6% of the studies. More than 50% of the studies presented unspecified economic analysis. The hospital perspective was the most prevalent perspective among the studies (46.1%).

CONCLUSIONS

ABC and TDABC economic analyses are a promising area of studies in oncology costs.

Using Time-Driven Activity-Based Costing as a Key Component of the Value Platform: A Pilot Analysis of Colonoscopy, Aortic Valve Replacement and Carpal Tunnel Release Procedures

Background

Time-driven activity-based costing (TDABC) is a methodology that calculates the costs of healthcare resources consumed as a patient moves along a care process. Limited data exist on the application of TDABC from the perspective of an anesthesia provider. We describe the use of TDABC, a bottom-up costing strategy and financial outcomes for three different medical-surgical procedures.

Methods

In each case, a multi-disciplinary team created process maps describing the care delivery cycle for a patient encounter using the TDABC methodology. Each step in a process map delineated an activity required for delivery of patient care. The resources (personnel, equipment and supplies) associated with each step were identified. A per minute cost for each resource expended was generated, known as the capacity cost rate, and multiplied by its time requirement. The total cost for an episode of care was obtained by adding the cost of each individual resource consumed as the patient moved along a clinical pathway.

Results

We built process maps for colonoscopy in the gastroenterology suite, calculated costs of an aortic valve replacement by comparing surgical aortic valve replacement (SAVR) versus transcatheter aortic valve replacement (TAVR) techniques, and determined the cost of carpal tunnel release in an operating room versus an ambulatory procedure room.

Conclusions

TDABC is central to the value-based healthcare platform. Application of TDABC provides a framework to identify process improvements for health care delivery. The first case demonstrates cost-savings and improved wait times by shifting some of the colonoscopies scheduled with an anesthesiologist from the main hospital to the ambulatory facility. In the second case, we show that the deployment of an aortic valve via the transcatheter route front loads the costs compared to traditional, surgical replacement. The last case demonstrates significant cost savings to the healthcare system associated with re-organization of staff required to execute a carpal tunnel release.

Time-driven activity-based costing in health care: A systematic review of the literature

Health care organizations around the world are investing heavily in value-based health care (VBHC), and time-driven activity-based costing (TDABC) has been suggested as the cost-component of VBHC capable of addressing costing challenges. The aim of this study is to explore why TDABC has been applied in health care, how its application reflects a seven-step method developed specifically for VBHC, and implications for the future use of TDABC. This is a systematic review following the PRISMA statement. Qualitative methods were employed to analyze data through content analyses. TDABC is applicable in health care and can help to efficiently cost processes, and thereby overcome a key challenge associated with current cost-accounting methods The method's ability to inform bundled payment reimbursement systems and to coordinate delivery across the care continuum remains to be demonstrated in the published literature, and the role of TDABC in this cost-accounting landscape is still developing. TDABC should be gradually incorporated into functional systems, while following and building upon the recommendations outlined in this review. In this way, TDABC will be better positioned to accurately capture the cost of care delivery for conditions and to control cost in the effort to create value in health care.

Variation in the cost of care for primary total knee arthroplasties

BACKGROUND

The study examined the cost variation across 29 high-volume US hospitals and their affiliated orthopaedic surgeons for delivering a primary total knee arthroplasty without major complicating conditions. The hospitals had similar patient demographics, and more than 80% of them had statistically-similar Medicare risk-adjusted readmission and complication rates.

METHODS

Hospital and physician personnel costs were calculated using time-driven activity-based costing. Consumable supply costs, such as the prosthetic implant, were calculated using purchase prices, and postacute care costs were measured using either internal costs or external claims as reported by each hospital.

RESULTS

Despite having similar patient demographics and readmission and complication rates, the average cost of care for total knee arthroplasty across the hospitals varied by a factor of about 2 to 1. Even after adjusting for differences in internal labor cost rates, the hospital at the 90th percentile of cost spent about twice as much as the one at the 10th percentile of cost.

CONCLUSIONS

The large variation in costs among sites suggests major and multiple opportunities to transfer knowledge about process and productivity improvements that lower costs while simultaneously maintaining or improving outcomes.

Improving Efficiency Using Time-Driven Activity-Based Costing Methodology

PURPOSE

The aim of this study was to increase efficiency in MR enterography using a time-driven activity-based costing methodology.

METHODS

In February 2015, a multidisciplinary team was formed to identify the personnel, equipment, space, and supply costs of providing outpatient MR enterography. The team mapped the current state, completed observations, performed timings, and calculated costs associated with each element of the process. The team used Pareto charts to understand the highest cost and most time-consuming activities, brainstormed opportunities, and assessed impact. Plan-do-study-act cycles were developed to test the changes, and run charts were used to monitor progress. The process changes consisted of revising the workflow associated with the preparation and administration of glucagon, with completed implementation in November 2015.

RESULTS

The time-driven activity-based costing methodology allowed the radiology department to develop a process to more accurately identify the costs of providing MR enterography. The primary process modification was reassigning responsibility for the administration of glucagon from nurses to technologists. After implementation, the improvements demonstrated success by reducing non-value-added steps and cost by 13%, staff time by 16%, and patient process time by 17%. The saved process time was used to augment existing examination time slots to more accurately accommodate the entire enterographic examination. Anecdotal comments were captured to validate improved staff satisfaction within the multidisciplinary team.

CONCLUSIONS

This process provided a successful outcome to address daily workflow frustrations that could not previously be improved. A multidisciplinary team was necessary to achieve success, in addition to the use of a structured problem-solving approach.

Defining the value framework for prostate brachytherapy using patient-centered outcome metrics and time-driven activity-based costing

PURPOSE

Value, defined as outcomes over costs, has been proposed as a measure to evaluate prostate cancer (PCa) treatments. We analyzed standardized outcomes and time-driven activity-based costing (TDABC) for prostate brachytherapy (PBT) to define a value framework.

METHODS AND MATERIALS

Patients with low-risk PCa treated with low-dose-rate PBT between 1998 and 2009 were included. Outcomes were recorded according to the International Consortium for Health Outcomes Measurement standard set, which includes acute toxicity, patient-reported outcomes, and recurrence and survival outcomes. Patient-level costs to 1 year after PBT were collected using TDABC. Process mapping and radar chart analyses were conducted to visualize this value framework.

RESULTS

A total of 238 men were eligible for analysis. Median age was 64 (range, 46-81). Median followup was 5 years (0.5-12.1). There were no acute Grade 3-5 complications. Expanded Prostate Cancer Index Composite 50 scores were favorable, with no clinically significant changes from baseline to last followup at 48 months for urinary incontinence/bother, bowel bother, sexual function, and vitality. Ten-year outcomes were favorable, including biochemical failure-free survival of 84.1%, metastasis-free survival 99.6%, PCa-specific survival 100%, and overall survival 88.6%. TDABC analysis demonstrated low resource utilization for PBT, with 41% and 10% of costs occurring in the operating room and with the MRI scan, respectively. The radar chart allowed direct visualization of outcomes and costs.

CONCLUSIONS

We successfully created a visual framework to define the value of PBT using the International Consortium for Health Outcomes Measurement standard set and TDABC costs. PBT is associated with excellent outcomes and low costs. Widespread adoption of this methodology will enable value comparisons across providers, institutions, and treatment modalities.

Determining the True Cost to Deliver Total Hip and Knee Arthroplasty Over the Full Cycle of Care: Preparing for Bundling and Reference-Based Pricing

The Affordable Care Act accelerates health care providers' need to prepare for new care delivery platforms and payment models such as bundling and reference-based pricing (RBP). Thriving in this environment will be difficult without knowing the true cost of care delivery at the level of the clinical condition over the full cycle of care. We describe a project in which we identified true costs for both total hip and total knee arthroplasty. With the same tool, we identified cost drivers in each segment of care delivery and collected patient experience information. Combining cost and experience information with outcomes data we already collect allows us to drive costs down while protecting outcomes and experiences, and compete successfully in bundling and RBP programs.

Value based care and bundled payments: Anesthesia care costs for outpatient oncology surgery using time-driven activity-based costing

BACKGROUND

With the movement towards bundled payments, stakeholders should know the true cost of the care they deliver. Time-driven activity-based costing (TDABC) can be used to estimate costs for each episode of care. In this analysis, TDABC is used to both estimate the costs of anesthesia care and identify the primary drivers of those costs of 11 common oncologic outpatient surgical procedures.

METHODS

Personnel cost were calculated by determining the hourly cost of each provider and the associated process time of the 11 surgical procedures. Using the anesthesia record, drugs, supplies and equipment costs were identified and calculated. The current staffing model was used to determine baseline personnel costs for each procedure. Using the costs identified through TDABC analysis, the effect of different staffing ratios on anesthesia costs could be predicted.

RESULTS

Costs for each of the procedures were determined. Process time and costs are linearly related. Personnel represented 79% of overall cost while drugs, supplies and equipment represented the remaining 21%. Changing staffing ratios shows potential savings between 13% and 28% across the 11 procedures.

CONCLUSIONS

TDABC can be used to estimate the costs of anesthesia care. This costing information is critical to assessing the anesthesiology component in a bundled payment. It can also be used to identify areas of cost savings and model costs of anesthesia care. CRNA to anesthesiologist staffing ratios profoundly influence the cost of care. This methodology could be applied to other medical specialties to help determine costs in the setting of bundled payments.

Measuring the value of process improvement initiatives in a preoperative assessment center using time-driven activity-based costing

BACKGROUND

The value and impact of process improvement initiatives are difficult to quantify. We describe the use of time-driven activity-based costing (TDABC) in a clinical setting to quantify the value of process improvements in terms of cost, time and personnel resources.

PROBLEM

Difficulty in identifying and measuring the cost savings of process improvement initiatives in a Preoperative Assessment Center (PAC).

GOALS

Use TDABC to measure the value of process improvement initiatives that reduce the costs of performing a preoperative assessment while maintaining the quality of the assessment.

STRATEGY

Apply the principles of TDABC in a PAC to measure the value, from baseline, of two phases of performance improvement initiatives and determine the impact of each implementation in terms of cost, time and efficiency.

RESULTS

Through two rounds of performance improvements, we quantified an overall reduction in time spent by patient and personnel of 33% that resulted in a 46% reduction in the costs of providing care in the center. The performance improvements resulted in a 17% decrease in the total number of full time equivalents (FTE's) needed to staff the center and a 19% increase in the numbers of patients assessed in the center. Quality of care, as assessed by the rate of cancellations on the day of surgery, was not adversely impacted by the process improvements.