Time-driven activity-based costing: A dynamic value assessment model in pediatric appendicitis

Implementing value-based healthcare: a scoping review of key elements, outcomes, and challenges for sustainable healthcare systems

Introduction

Value-Based Health Care (VBHC) is an increasingly important healthcare paradigm that focuses on maximizing health outcomes relative to the cost of care delivered. Various healthcare organizations have adopted VBHC principles, but significant barriers remain in adapting care models, engaging stakeholders, and measuring outcomes. Moreover, the lack of standardized methods for measuring outcomes and financial sustainability further complicates the transition to VBHC. Understanding the factors that facilitate or hinder VBHC adoption is crucial to informing policy and practice for broader implementation. The objective is to map the literature addressing VBHC concerning population, study characteristics, funding models, outcome measures, and barriers and facilitators.

Methods

Following the JBI methodology and the PRISMA-ScR reporting guidance, a scoping review was undertaken to include primary and secondary research on VBHC across various healthcare settings. Searches were undertaken in nine relevant databases. Peer-reviewed quantitative and qualitative studies published in English were included and analyzed. A total of 145 studies were included after screening 2,725 studies.

Results

The findings show that the United States leads VBHC research, contributing 65% of the studies, followed by European countries. Cohort and cross-sectional studies were predominant, focusing on various populations, including hospitals, surgical patients, and cancer patients. Key findings highlight that Value-Based Purchasing and Time-Driven Activity-Based Costing models were the most frequently reported funding models. Traditional in-hospital care remains the dominant delivery model, with increasing interest in telemedicine. Outcome measure were diverse, ranging from patient-reported outcomes to cost savings for both patients and providers. Barriers to VBHC implementation include insufficient funding, fee-for-service model persistence, and resistance from healthcare professionals. Facilitators included strong leadership, multidisciplinary collaboration, and the use of digital tools.

Conclusion

The review highlights the need for consistent outcome measurements, financial incentives, and improved data transparency to ensure the successful and scalable implementation of VBHC across healthcare systems. While VBHC shows promise in improving healthcare efficiency and quality, challenges remain in aligning financial and operational structures to fully support this paradigm shift.

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.

Health economic evaluation of blended collaborative care for older multimorbid heart failure patients: study protocol

BACKGROUND

Integrated care, in particular the 'Blended Collaborative Care (BCC)' strategy, may have the potential to improve health-related quality of life (HRQoL) in multimorbid patients with heart failure (HF) and psychosocial burden at no or low additional cost. The ESCAPE trial is a randomised controlled trial for the evaluation of a BCC approach in five European countries. For the economic evaluation of alongside this trial, the four main objectives were: (i) to document the costs of delivering the intervention, (ii) to assess the running costs across study sites, (iii) to evaluate short-term cost-effectiveness and cost-utility compared to providers' usual care, and (iv) to examine the budgetary implications.

METHODS

The trial-based economic analyses will include cross-country cost-effectiveness and cost-utility assessments from a payer perspective. The cost-utility analysis will calculate quality-adjusted life years (QALYs) using the EQ-5D-5L and national value sets. Cost-effectiveness will include the cost per hospital admission avoided and the cost per depression-free days (DFD). Resource use will be measured from different sources, including electronic medical health records, standardised questionnaires, patient receipts and a care manager survey. Uncertainty will be addressed using bootstrapping.

DISCUSSION

The various methods and approaches used for data acquisition should provide insights into the potential benefits and cost-effectiveness of a BCC intervention. Providing the economic evaluation of ESCAPE will contribute to a country-based structural and organisational planning of BCC (e.g., the number of patients that may benefit, how many care managers are needed). Improved care is expected to enhance health-related quality of life at little or no extra cost.

TRIAL REGISTRATION

The study follows CHEERS2022 and is registered at the German Clinical Trials Register (DRKS00025120).

Is it possible to automate the discovery of process maps for the time-driven activity-based costing method? A systematic review

OBJECTIVES

The main objective of this manuscript was to identify the methods used to create process maps for care pathways that utilized the time-driven activity-based costing method.

METHODS

This is a systematic mapping review. Searches were performed in the Embase, PubMed, CINAHL, Scopus, and Web of Science electronic literature databases from 2004 to September 25, 2022. The included studies reported practical cases from healthcare institutions in all medical fields as long as the time-driven activity-based costing method was employed. We used the time-driven activity-based costing method and analyzed the created process maps and a qualitative approach to identify the main fields.

RESULTS

A total of 412 studies were retrieved, and 70 articles were included. Most of the articles are related to the fields of orthopedics and childbirth-related to hospital surgical procedures. We also identified various studies in the field of oncology and telemedicine services. The main methods for creating the process maps were direct observational practices, complemented by the involvement of multidisciplinary teams through surveys and interviews. Only 33% of the studies used hospital documents or healthcare data records to integrate with the process maps, and in 67% of the studies, the created maps were not validated by specialists.

CONCLUSIONS

The application of process mining techniques effectively automates models generated through clinical pathways. They are applied to the time-driven activity-based costing method, making the process more agile and contributing to the visualization of high degrees of variations encountered in processes, thereby making it possible to enhance and achieve continual improvements in processes.

Health System Perspective on Cost for Delivering a Decision Aid for Prostate Cancer Using Time-driven Activity-based Costing

BACKGROUND

Previsit decision aids (DAs) have promising outcomes in improving decisional quality, however, the cost to deploy a DA is not well defined, presenting a possible barrier to health system adoption.

OBJECTIVES

We aimed to define the cost from a health system perspective of delivery of a DA.

RESEARCH DESIGN

Observational cohort.

PATIENTS AND METHODS

We interviewed or observed relevant personnel at 3 institutions with implemented DA distribution programs targeting men with prostate cancer. We then created process maps for DA delivery based on interview data. Cost determination was performed utilizing time-driven activity-based costing. Clinic visit length was measured on a subset of patients. Decisional quality measures were collected after the clinic visit.

RESULTS

Total process time (minutes) for DA delivery was 10.14 (UCLA), 68 (Olive View-UCLA), and 25 (Vanderbilt). Total average costs (USD) per patient were $38.32 (UCLA), $59.96 (Olive View-UCLA), and $42.38 (Vanderbilt), respectively. Labor costs were the largest contributors to the cost of DA delivery. Variance analyses confirmed the cost efficiency of electronic health record (EHR) integration. We noted a shortening of clinic visit length when the DA was used, with high levels of decision quality.

CONCLUSIONS

Time-driven activity-based costing is an effective approach to determining true inclusive costs of service delivery while also elucidating opportunities for cost containment. The absolute cost of delivering a DA to men with prostate cancer in various settings is much lower than the system costs of the treatments they consider. EHR integration streamlines DA delivery efficiency and results in substantial cost savings.

Age at surgery and outcomes following neonatal cardiac surgery: An analysis from the Pediatric Cardiac Critical Care Consortium

OBJECTIVE

The optimal timing for neonatal cardiac surgery is a potentially modifiable factor that may affect outcomes. We studied the relationship between age at surgery (AAS) and outcomes across multiple hospitals, focusing on neonatal operations where timing appears is not emergency.

METHODS

We studied neonates ≥37 weeks' gestation and ≥2.5 kg admitted to a treating hospital on or before day of life 2 undergoing selected index cardiac operations. The impact of AAS on outcomes was evaluated across the entire cohort and a standard risk subgroup (ie, free of preoperative mechanical ventilation, mechanical circulatory support, or other organ failure). Outcomes included mortality, major morbidity (ie, cardiac arrest, mechanical circulatory support, unplanned cardiac reintervention, or neurologic complication), and postoperative cardiac intensive care unit and hospital length of stay. Post hoc analyses focused on operations undertaken between day of life 2 and 7.

RESULTS

We studied 2536 neonates from 47 hospitals. AAS from day of life 2 through 7 was not associated with risk adjusted mortality or major morbidity among the entire cohort and the standard risk subgroup. Older AAS, although associated with modest increases in postoperative cardiac intensive care unit and hospital length of stay in the entire cohort, was not associated with hospital length of stay in the standard risk subgroup.

CONCLUSIONS

Among select nonemergency neonatal cardiac operations, AAS between day of life 2 and 7 was not found to be associated with risk adjusted mortality or major morbidity. Although delays in surgical timing may modestly increase preoperative resource use, studies of AAS and outcomes not evident at the time of discharge are needed.

Cost measurement in value-based healthcare: a systematic review

OBJECTIVE

Although value-based healthcare (VBHC) views accurate cost information to be crucial in the pursuit of value, little is known about how the costs of care should be measured. The aim of this review is to identify how costs are currently measured in VBHC, and which cost measurement methods can facilitate VBHC or value-based decision making.

DESIGN

Two reviewers systematically search the PubMed/MEDLINE, Embase, EBSCOhost and Web of Science databases for publications up to 1 January 2022 and follow Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines to identify relevant studies for further analysis.

ELIGIBILITY CRITERIA

Studies should measure the costs of an intervention, treatment or care path and label the study as 'value based'. An inductive qualitative approach was used to identify studies that adopted management accounting techniques to identify if or how cost information facilitated VBHC by aiding decision-making.

RESULTS

We identified 1930 studies, of which 215 measured costs in a VBHC setting. Half of these studies measured hospital costs (110, 51.2%) and the rest relied on reimbursement amounts. Sophisticated costing methods that allocate both direct and indirect costs to care paths were seen as able to provide valuable managerial information by facilitating care path adjustments (39), benchmarking (38), the identification of cost drivers (47) and the measurement of total costs or cost savings (26). We found three best practices that were key to success in cost measurement: process mapping (33), expert input (17) and observations (24).

CONCLUSIONS

Cost information can facilitate VBHC. Time-driven activity-based costing (TDABC) is viewed as the best method although its ability to inform decision-making depends on how it is implemented. While costing short, or partial, care paths and surgical episodes produces accurate cost information, it provides only limited decision-making information. Practitioners are advised to focus on costing full care cycles and to consider both direct and indirect costs through TDABC.

Adaptation of time-driven activity-based costing to the evaluation of the efficiency of ambulatory care provided in the emergency department

Objectives

The aim of this study was: (1) to adapt the time-driven activity-based costing (TDABC) method to emergency department (ED) ambulatory care; (2) to estimate the cost of care associated with frequently encountered ambulatory conditions; and (3) to compare costs calculated using estimated time and objectively measured time.

Methods

TDABC was applied to a retrospective cohort of patients with upper respiratory tract infections, urinary tract infections, unspecified abdominal pain, lower back pain and limb lacerations who visited an ED in Québec City (Canada) during fiscal year 2015-2016. The calculated cost of care was the product of the time required to complete each care procedure and the cost per minute of each human resource or equipment involved. Costing based on durations estimated by care professionals were compared to those based on objective measurements in the field.

Results

Overall, 220 care episodes were included and 3080 time measurements of 75 different processes were collected. Differences between costs calculated using estimated and measured times were statistically significant for all conditions except lower back pain and ranged from $4.30 to $55.20 (US) per episode. Differences were larger for conditions requiring more advanced procedures, such as imaging or the attention of ED professionals.

Conclusions

The greater the use of advanced procedures or the involvement of ED professionals in the care, the greater is the discrepancy between estimated-time-based and measured-time-based costing. TDABC should be applied using objective measurement of the time per procedure.

The implementation of value-based healthcare: a scoping review

BACKGROUND

The aim of this study was to identify and summarize how value-based healthcare (VBHC) is conceptualized in the literature and implemented in hospitals. Furthermore, an overview was created of the effects of both the implementation of VBHC and the implementation strategies used.

METHODS

A scoping review was conducted by searching online databases for articles published between January 2006 and February 2021. Empirical as well as non-empirical articles were included.

RESULTS

1729 publications were screened and 62 were used for data extraction. The majority of the articles did not specify a conceptualization of VBHC, but only conceptualized the goals of VBHC or the concept of value. Most hospitals implemented only one or two components of VBHC, mainly the measurement of outcomes and costs or Integrated Practice Units (IPUs). Few studies examined effects. Implementation strategies were described rarely, and were evaluated even less.

CONCLUSIONS

VBHC has a high level of interpretative variability and a common conceptualization of VBHC is therefore urgently needed. VBHC was proposed as a shift in healthcare management entailing six reinforcing steps, but hospitals have not implemented VBHC as an integrative strategy. VBHC implementation and effectiveness could benefit from the interdisciplinary collaboration between healthcare and management science.

TRIAL REGISTRATION

This scoping review was registered on Open Science Framework https://osf.io/jt4u7/ (OSF | The implementation of Value-Based Healthcare: a Scoping Review).

Implementing PDSA Methodology for Pediatric Appendicitis Increases Care Value for a Tertiary Children's Hospital

Supplemental Digital Content is available in the text.

Introduction:

We used the plan-do-study-act (PDSA) framework to develop and implement an evidence-based clinical practice guideline (CPG) within an urban, tertiary children’s referral center.

Methods:

We developed an evidence-based CPG for appendicitis using iterative PDSA cycles. Similar CPGs from other centers were reviewed and modified for local implementation. Adjuncts included guideline-specific order sets and operative notes in the electronic medical record system. Outcomes included length of stay (LOS), 30-day readmissions, hospital costs, and patient and family experience (PFE) scores. Our team tracked outcome, process, and balancing measures using Statistical Process Charts. Outcome measures were compared over 2 fiscal quarters preimplementation and 3 fiscal quarters postimplementation, using interrupted time series, student t test, and chi-square tests when appropriate.

Results:

LOS for simple (uncomplicated) appendicitis decreased to 0.87 days (interquartile range [IQR] 0.87–0.94 days) from 1.1 days (IQR 0.97–1.42 days). LOS for complicated appendicitis decreased to 4.96 days (IQR 4.95–6.15) from 5.58 days (IQR 5.16–6.09). This reduction equated to an average cost-savings of $1,122/patient. Thirty-day readmission rates have remained unchanged. PFE scores increased across all categories and have remained higher than national benchmarks.

Conclusion:

Development and Implementation of a CPG for pediatric appendicitis using the PDSA framework adds value to care provided within a large tertiary center.

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 identifies opportunities for process efficiency and cost optimization for robot-assisted laparoscopic pyeloplasty

BACKGROUND

Robot-assisted laparoscopic pyeloplasty (RALP) is a commonly performed procedure in children, but its actual cost implications on the healthcare ecosystem have not been adequately defined. Time-driven activity-based costing (TDABC) is a novel cost accounting method derived from value based healthcare systems that may offer one pathway to assess institutional costs.

OBJECTIVE

To determine the true cost of a robot-assisted laparoscopic pyeloplasty (RALP) in the pediatric population using TDABC, and compare it to traditional cost accounting. And to utilize TDABC to minimize cost and improve time-flow efficiency.

SUBJECTS/PATIENTS AND METHODS

The RALP care pathway was defined from patient arrival to the pre-operative suite to discharge from the post-anesthesia care unit (PACU). Process maps were created with an interdisciplinary team to survey RALP activities. Retrospective time stamps were obtained from the electronic medical record for fiscal year 2016 (FY16) RALP cases, and were validated by prospectively stopwatch timing additional RALP cases. Male and female pediatric patients undergoing a unilateral RALP during FY16 and during the prospective study period (June 2017-October 2017) were included. Procedure costs were calculated using TDABC after determining the capacity cost rate for all personnel and assets, and multiplying them with the time stamps.

RESULTS

25 RALP cases were analyzed for FY16. TDABC determined a total cost of $15 319/case, when direct, indirect and capital robot cost are included. Traditional cost accounting amounted to a total of $16 158/case. The current robot utilization rate is 22% of total capacity, effectively increasing the total RALP cost by 16%. Time stamps with the most variance were pre-operative services (115 ± 27.5 min), robotic console (142 min ±30.7 min) and PACU times (145 ± 101.1 min) (Figure) DISCUSSION: This study represents the first TDABC implementation in robot-assisted pediatric procedures. Previous TDABC in other areas of urology similarly revealed discrepancies between traditional cost accounting and TDABC. The present study demonstrates a higher total cost than previous cost accounting studies for the RALP, however, this is the first effort to include indirect costs in the final calculations. This study does convey the limitations of a retrospective analysis and those inherent to a single institution study.

CONCLUSION

TDABC defined the magnitude of cost variation based on robot utilization of a RALP. Traditional cost accounting overestimates the actual costs of a RALP. TDABC also identified high-cost and high variability loci in the RALP process map that will be targeted for process and quality improvement while further reducing assessed costs.

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.

A systematic review and meta-synthesis of policy intervention characteristics that influence the implementation of government-directed policy in the hospital setting: implications for infection prevention and control

Background

Government-directed policy plays an important role in the regulation and supervision of healthcare quality. Effective implementation of these policies has the potential to significantly improve clinical practice and patient outcomes, including the prevention of healthcare-associated infections. A systematic review of research describing the implementation of government-directed policy in the hospital setting was performed with the aim to identify policy intervention characteristics that influence implementation.

Methods

A systematic search of four electronic databases was undertaken to identify eligible articles published between 2007 and 2017. Studies were included if published in the English language and described the implementation of government-directed policy in a high-income country hospital setting. Data on policy and implementation were extracted for each article and interpretive syntheses performed.

Results

A total of 925 articles were retrieved and titles and abstracts reviewed, with 69 articles included after review of abstract and full text. Qualitative synthesis of implementation data showed three overarching themes related to intervention characteristics associated with implementation: clarity; infrastructure; and alignment.

Conclusion

Better understanding and consideration of policy intervention characteristics during development and planning will facilitate more effective implementation although research describing implementation of government-directed policy in the hospital setting is limited and of variable quality. The findings of this study provide guidance to staff tasked with the development or implementation of government-directed policy in the hospital setting, infection prevention and control professionals seeking to maximise the impact of policy on practice and improve patient outcomes.

Anaphylaxis-a 2020 practice parameter update, systematic review, and Grading of Recommendations, Assessment, Development and Evaluation (GRADE) analysis

Anaphylaxis is an acute, potential life-threatening systemic allergic reaction that may have a wide range of clinical manifestations. Severe anaphylaxis and/or the need for repeated doses of epinephrine to treat anaphylaxis are risk factors for biphasic anaphylaxis. Antihistamines and/or glucocorticoids are not reliable interventions to prevent biphasic anaphylaxis, although evidence supports a role for antihistamine and/or glucocorticoid premedication in specific chemotherapy protocols and rush aeroallergen immunotherapy. Evidence is lacking to support the role of antihistamines and/or glucocorticoid routine premedication in patients receiving low- or iso-osmolar contrast material to prevent recurrent radiocontrast media anaphylaxis. Epinephrine is the first-line pharmacotherapy for uniphasic and/or biphasic anaphylaxis. After diagnosis and treatment of anaphylaxis, all patients should be kept under observation until symptoms have fully resolved. All patients with anaphylaxis should receive education on anaphylaxis and risk of recurrence, trigger avoidance, self-injectable epinephrine education, referral to an allergist, and be educated about thresholds for further care.

Simulation of Health and Economic Benefits of Extended Observation of Resolved Anaphylaxis

IMPORTANCE

Biphasic anaphylaxis may occur in up to 20% of patients with anaphylaxis; however, the optimal observation time of patients with resolved anaphylaxis is unknown.

OBJECTIVE

To characterize the cost-effectiveness of short vs prolonged medical observation times after resolved anaphylaxis.

DESIGN, SETTING, AND PARTICIPANTS

An economic evaluation was performed of computer-simulated adult patients observed in outpatient allergy clinics and emergency departments, with rates of biphasic anaphylaxis derived from a 2019 meta-analysis.

EXPOSURES

Computer-simulated patients (10 000 per strategy) were randomized to undergo 1 hour of medical observation (associated with 95% negative predictive value of biphasic anaphylaxis) or 6 or more hours of observation (associated with a 97.3% negative predictive value of biphasic anaphylaxis).

MAIN OUTCOMES AND MEASURES

Cost-effectiveness of 6- to 24-hour medical observation of resolved anaphylaxis evaluated at willingness-to-pay thresholds of $10 000 per case of biphasic anaphylaxis observed and $10 million per death prevented, assuming that observation is associated with a 10- to 1000-fold reduction in the risk of death due to biphasic anaphylaxis.

RESULTS

Biphasic anaphylaxis occurred after hospital discharge in 365 patients observed for 1 hour and in 213 patients undergoing prolonged observation. From a health care sector perspective, with medical observation costs of $286.92 per hour, the incremental cost of extended medical observation of resolved anaphylaxis (1 hour vs 6 hours) was $62 374 per case of biphasic anaphylaxis identified ($68 411 from the societal perspective). In Monte Carlo simulations, with hourly costs ranging from $100 to $500 and extended observation ranging from 6 to 24 hours (health care sector perspective), the mean (SD) costs were $295.36 ($81.22) for 1 hour of observation vs $3540.42 ($1626.67) for extended observation. The incremental cost-effectiveness ratio was $213 439 per biphasic anaphylaxis observed ($230 202 from the societal perspective). A 6-hour observation could be cost-effective if the risk of biphasic anaphylaxis after 1-hour observation of resolved anaphylaxis was 17% or if hourly observation costs were less than $46 in the base case. Cost-effectiveness could also be achieved (willingness-to-pay of $10 million per death prevented, health care sector perspective) when a baseline fatality rate of 0.33% per biphasic anaphylactic event was assumed, with a no greater than 24% relative risk of fatality associated with 6-hour observation.

CONCLUSIONS AND RELEVANCE

This study indicates that prolonged medical observation (6-24 hours) for resolved anaphylaxis may not be cost-effective for patients at low risk for biphasic anaphylaxis; however, in particular clinical circumstances of low observation costs, high postdischarge risk of biphasic anaphylaxis, or large incremental fatality risk reduction associated with extended observation, longer medical observation can be justified.

Activity-Based Costing

Cost allocation for health care professionals can be an enigma within the health care system. Activity-based costing (ABC) is an accounting tool that allocates costs incurred through a company's practice of providing goods and services to the consumer. ABC can provide insight into inefficiencies across the supply chain and unlock excess capacity. This, in turn, can drive services provided toward generating more value for the hospital system. ABC can be tailored to focus upon a unit of measurement that holds value as it pertains to production. With time-driven ABC (Td-ABC), we look to use the advantages of both the fee-for-service and capitation model to transition to a value-based system. Providers are rewarded based on efficiencies and successful outcomes in patient care while disincentivizing poor outcomes and superfluous volume/expenditures. ABC, however, does not come without its own risks and disadvantages, and the user must exercise caution in applying this cost-allocating tool to avoid detriment to its practice. A review of the literature was conducted to analyze the implementation, medical application, and advantages and disadvantages of Td-ABC.

Operating room efficiency

The operating room is the financial hub of any hospital, and maximizing operating room efficiency has important implications for cost savings, patient satisfaction, and medical team morale. Over the past decade, manufacturing principles and processes such as Lean and Six Sigma have been applied to various aspects of healthcare including the operating room. Although time consuming, process mapping and deep examinations of each step of the patient journey from pre-operative visit to post-operative discharge can have multiplicative benefits that extend from cost savings to maintaining the focus on improving quality and patient safety.

Defining the Costs of Reusable Flexible Ureteroscope Reprocessing Using Time-Driven Activity-Based Costing

PURPOSE

Careful decontamination and sterilization of reusable flexible ureteroscopes used in ureterorenoscopy cases prevent the spread of infectious pathogens to patients and technicians. However, inefficient reprocessing and unavailability of ureteroscopes sent out for repair can contribute to expensive operating room (OR) delays. Time-driven activity-based costing (TDABC) was applied to describe the time and costs involved in reprocessing.

MATERIALS AND METHODS

Direct observation and timing were performed for all steps in reprocessing of reusable flexible ureteroscopes following operative procedures. Estimated times needed for each step by which damaged ureteroscopes identified during reprocessing are sent for repair were characterized through interviews with purchasing analyst staff. Process maps were created for reprocessing and repair detailing individual step times and their variances. Cost data for labor and disposables used were applied to calculate per minute and average step costs.

RESULTS

Ten ureteroscopes were followed through reprocessing. Process mapping for ureteroscope reprocessing averaged 229.0 ± 74.4 minutes, whereas sending a ureteroscope for repair required an estimated 143 minutes per repair. Most steps demonstrated low variance between timed observations. Ureteroscope drying was the longest and highest variance step at 126.5 ± 55.7 minutes and was highly dependent on manual air flushing through the ureteroscope working channel and ureteroscope positioning in the drying cabinet. Total costs for reprocessing totaled $96.13 per episode, including the cost of labor and disposable items.

CONCLUSIONS

Utilizing TDABC delineates the full spectrum of costs associated with ureteroscope reprocessing and identifies areas for process improvement to drive value-based care. At our institution, ureteroscope drying was one clearly identified target area. Implementing training in ureteroscope drying technique could save up to 2 hours per reprocessing event, potentially preventing expensive OR delays.