Value-based Healthcare: Applying Time-driven Activity-based Costing in Orthopaedics

Episode-of-care costs of total knee arthroplasty: Outpatient versus inpatient postoperative care protocol

BACKGROUND

Total knee arthroplasty (TKA) is the most commonly performed joint replacement procedure in North America. Few studies have successfully evaluated the episode-of-care cost (EOCC) of common elective orthopedic procedures using an activity-based costing (ABC) framework. The objective of this study is to compare the EOCC of same-day discharge versus inpatient TKA using an activity-based costing methodology.

METHODS

An observational case-control study was conducted comparing the EOCC of 25 consecutive patients who underwent same-day discharge (SDD) TKA and 25 consecutive patients who underwent same-day admission (SDA) TKA at an academic center. The EOCC was generated using an ABC framework.

RESULTS

The median total EOCC for outpatient TKA was $7,243.26 CAD (IQR=614.12), while the median EOCC in the inpatient group was $8,303.94 CAD (IQR=1,157.77). The costs incurred secondary to the hospital admission were the main driver of the increased cost for inpatients. The mean length of stay for admitted patients was 2.45 days (SD=1,52). Patients in the outpatient group were younger (p < 0.01) and had a lower mean Charlson Comorbidity Index group (p = 0.01). There was no significant difference in gender, BMI, ASA scores, and complication rates between the two groups.

CONCLUSION

Through the application of an ABC framework, this value-based healthcare study demonstrates that outpatient procedures are a cost-effective approach to knee arthroplasty. Our findings demonstrate that the total cost of outpatient TKA was on average 15% ($1,060 CAD) lower than the cost of TKA with the standard inpatient postoperative care protocol.

Predictors of Episode-of-Care Costs for Ankle Fractures

Ankle fractures are one of the most resource-consuming traumatic orthopedic injuries. Few studies have successfully evaluated the episode-of-care costs (EOCC) of common traumatic orthopedic injuries. The objective of this study was to determine the EOCC associated with the surgical management of ankle fractures. A retrospective cohort study of 105 consecutive patients who underwent open reduction internal fixation of an isolated ankle fracture at a Canadian Level-1 trauma center was conducted. Episode-of-care costs were generated using an activity-based costing framework. The median global episode-of-care cost for ankle fracture surgeries performed at the studied institution was $3,487 CAD [IQR 880] ($2,685 USD [IQR 616]). Patients aged 60 to 90 years had a significantly higher median EOCC than younger patients (p = .01). Supination-adduction injuries had a significantly higher median EOCC than other injury patterns (p = .01). The median EOCC for patients who underwent surgery within 10 days of their injury ($3,347 CAD [582], $2,577 USD [448]) was significantly lower than the cost for patients who had their surgery delayed 10 days or more after the injury ($3,634 CAD [776], $2,798 USD [598]) (p = .03). Patient sex, anesthesia type, ASA score and surgeon's fellowship training did not affect the EOCC. This study provides valuable data on predictors of EOCC in the surgical management of ankle fractures. Delaying simple ankle fracture cases due to operating time constraints can increase the total cost and burden of these fractures on the healthcare system. In addition, this study provides a framework for future episode-of-care cost analysis studies in orthopedic surgery.

Variation in the Cost of Hip Arthroscopy for Labral Pathological Conditions: A Time-Driven Activity-Based Costing Analysis

BACKGROUND

Despite growing interest in delivering high-value orthopaedic care, the costs associated with hip arthroscopy remain poorly understood. By employing time-driven activity-based costing (TDABC), we aimed to characterize the cost composition of hip arthroscopy for labral pathological conditions and to identify factors that drive variation in cost.

METHODS

Using TDABC, we measured the costs of 890 outpatient hip arthroscopy procedures for labral pathological conditions across 5 surgeons at 4 surgery centers from 2015 to 2022. All patients were ≥18 years old and were treated by surgeons who each performed ≥20 surgeries during the study period. Costs were normalized to protect the confidentiality of internal hospital cost data. Descriptive analyses and multivariable linear regression were performed to identify factors underlying cost variation.

RESULTS

The study sample consisted of 515 women (57.9%) and 375 men (42.1%), with a mean age (and standard deviation) of 37.1 ± 12.7 years. Most of the procedures were performed in patients who were White (90.6%) or not Hispanic (93.4%). The normalized total cost of hip arthroscopy per procedure ranged from 43.4 to 203.7 (mean, 100 ± 24.2). Of the 3 phases of the care cycle, the intraoperative phase was identified as the largest generator of cost (>90%). On average, supply costs accounted for 48.8% of total costs, whereas labor costs accounted for 51.2%. A 2.5-fold variation between the 10th and 90th percentiles for total cost was attributed to supplies, which was greater than the 1.8-fold variation attributed to labor. Variation in total costs was most effectively explained by the labral management method (partial R2 = 0.332), operating surgeon (partial R2 = 0.326), osteoplasty type (partial R2 = 0.087), and surgery center (partial R2 = 0.086). Male gender (p < 0.001) and younger age (p = 0.032) were also associated with significantly increased costs. Finally, data trends revealed a shift toward labral preservation techniques over debridement during the study period (with the rate of such techniques increasing from 77.8% to 93.2%; Ptrend = 0.0039) and a strong correlation between later operative year and increased supply costs, labor costs, and operative time (p < 0.001 for each).

CONCLUSIONS

By applying TDABC to outpatient hip arthroscopy, we identified wide patient-to-patient cost variation that was most effectively explained by the method of labral management, the operating surgeon, the osteoplasty type, and the surgery center. Given current procedural coding trends, declining reimbursements, and rising health-care costs, these insights may enable stakeholders to design bundled payment structures that better align reimbursements with costs.

LEVEL OF EVIDENCE

Economic and Decision Analysis Level IV. See Instructions for Authors for a complete description of levels of evidence.

Determining the Marginal Cost Differences of a Telehealth Versus an In-person Occupational Therapy Evaluation Session for Stroke Survivors Using Time-driven Activity-based Costing

OBJECTIVE

To estimate the marginal cost differences and care delivery process of a telerehabilitation vs outpatient session.

DESIGN

This study used a time-driven activity-based costing approach including (1) observation of rehabilitation sessions and creation of manual time stamps, (2) structured and recorded interviews with 2 occupational therapists familiar with outpatient therapy and 2 therapists familiar with telerehabilitation, (3) collection of standard wages for providers, and (4) the creation of an iterative flowchart of both an outpatient and telerehabilitation session care delivery process.

SETTING

Telerehabilitation and outpatient therapy evaluation.

PARTICIPANTS

Three therapists familiar with care deliver for telerehabilitation or outpatient therapy (N=3).

INTERVENTIONS

Not applicable.

MAIN OUTCOME MEASURES

Marginal cost difference between telerehabilitation and outpatient therapy evaluations.

RESULTS

Overall, telerehabilitation ($225.41) was more costly than outpatient therapy ($168.29) per session for a cost difference of $57.12. Primary time drivers of this finding were initial phone calls (0 minutes for OP therapists vs 35 minutes for TR) and post documentation (5 minutes for OP vs 30 minutes for TR) demands for telerehabilitation.

CONCLUSIONS

Telerehabilitation is an emerging platform with the potential to reduce costs, improve health care inequities, and facilitate better patient outcomes. Improvements in documentation practices, staffing, technology, and reimbursement structuring would allow for a more successful translation.

Value-Based Health Care in Hand Surgery: Where Are We & Where Do We Go From Here?

Health care delivery is broken. The cost of care continues to skyrocket and the outcomes most important to patients are often a mystery. Further, care is often delivered via a fee-for-service model where surgeons are rewarded for the quantity, not the quality, of services provided. Such a health care delivery system is not sustainable and does not incentivize stakeholders to focus on the most important element of the health care delivery "puzzle": the patient. Fortunately, we are in the midst of transforming our health care delivery system, with a focus on optimizing the value of care delivery (ie, health outcomes achieved per dollar spent across a full care cycle). In hand surgery, progress has been made as part of this health system evolution. However, there remains much to accomplish. In this article, the authors review the 6 components of a strategic agenda for moving to a high-value health care delivery system for hand surgery, focusing on where we are today and where we need to go from here.

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). 

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-022-07489-2.