Understanding the Economic Impact of an Essential Service: Applying Time-Driven Activity-Based Costing to the Hospital Airway Response Team

BACKGROUND

As the United States moves toward value-based care metrics, it will become essential for anesthesia groups nationwide to understand the costs of their services. Time-driven activity-based costing (TDABC) estimates the amount of time it takes to perform a clinical activity by dividing complex tasks into process steps and mapping each step and has historically been used to estimate the costs of various health care services. TDABC is a tool that can be adapted for variable staffing models and the volume of service provided. Anesthesia departments often provide staffing for airway response teams (ART). The economic implications of staffing ART have not been well described. We present a TDABC model for ART activation in a tertiary-care center to estimate the cost incurred by an anesthesiology department to staff an ART.

METHODS

Pages received by the Brigham and Women's Hospital ART over a 24-month time period (January 2019 to December 2020) were analyzed and categorized. The local administrative database was queried for the Current Procedural Terminology (CPT) code used to bill for emergency airway placements. Sessions were held by multiple members of the ART to create process maps for the different types of ART activations. We estimated the staffing costs using the estimated time it took for each type of ART activation as well as the data collected for local ART activations.

RESULTS

From the paging records, we analyzed 3368 activations of the ART. During the study period, 1044 airways were billed for with emergency airway CPT code. The average revenue collected per airway was $198.45 (95% CI, $190-$207). For STAT/Emergency airway team activations, process maps and non-STAT airway team activations were created, and third subprocess map was created for performing endotracheal intubation. Using the TDABC, the total staffing costs are estimated to be $218,601 for the 2-year study period. The ART generated $207,181 in revenue during the study period.

CONCLUSIONS

Our analysis of ART-activation pages suggests that while the revenue generated may cover the cost of staffing the team during ART activations, it does not cover consumable equipment costs. Additionally, the current fee-for-service model relies on the team being able to perform other clinical duties in addition to covering the airway pager and would be impossible to capture using traditional top-down costing methods. By using TDABC, anesthesia groups can demonstrate how certain services, such as ART, are not fully covered by current reimbursement models and how to negotiate for subsidy agreements.As the transition from traditional fee-for-service payments to value-based care models continues in the United States, improving the understanding and communication of medical care costs will be essential. In the United States, it is common for anesthesia groups to receive direct revenue from hospitals to preserve financial viability, and therefore, knowledge of true cost is essential regardless of payer model.1 With traditional payment models, what is billable and nonbillable may not reflect either the need for or the cost of providing the service. As anesthesia departments navigate the transition of care from volume to value, actual costs will be essential to understand for negotiations with hospitals for support when services are nonbillable, when revenue from payers does not cover anesthesia costs, and when calculating the appropriate share for anesthesia departments when bundled payments are distributed.

The monthly operating cost of an institutional COVID-19 airway response team: A financial model and sensitivity analysis based on experience at an academic medical center

Background

Coronavirus disease 2019 (COVID-19) airway response teams concentrate equipment and expertise while minimizing the number of providers exposed to aerosol generating procedures. These airway teams were implemented in various hospitals around the world to respond to the acute increase of critical ill patients requiring ventilatory support. We created a financial model to estimate the costs for staffing and maintaining a dedicated COVID-19 airway response team based on the experience at an urban academic hospital in the Northeastern United States between March and June of 2020.

Methods

The institutional review board at Brigham and Women's Hospital approved this protocol and the requirement for informed consent was waived. The average reimbursement for 125 COVID-19 airway consultations was measured. Our team estimated the costs of consumable items for each airway based on previously published recommendations for equipment and personal protective equipment. A sensitivity analyses was performed for variable numbers of monthly airway consults and different staffing patterns based on a literature review of available COVID-19 airway team structures.

Results

Based on the average reimbursements and estimates of the consumable costs, each airway procedure represented a net loss of $34 to the institution. The overall estimated cost of staffing a dedicated airway team was between $109,472 and $204,575 per month.

Conclusions

Development and implementation of a dedicated COVID-19 airway response teams represents a significant institutional expense. Institutions should establish necessary cost sharing, consider volume and team structure, and identify reimbursement opportunities that mitigate the necessary expense associated with airway response programs.

Understanding the Clinical Implications of Resident Involvement in Uncommon Operations

OBJECTIVE

The objective of this study was to examine uncommon operations in greater detail given that the outcomes of uncommon operations are largely understudied. This study examines the incidence of postoperative events and the role of the resident following uncommon operations.

DESIGN

We identified uncommon general surgical operations using the ACS National Surgical Quality Improvement Program Participant Use file (2008-2011). Death or serious morbidity (DSM) within 30 days of the operation was the primary outcome of interest. Failure to rescue (FTR) and prolonged operative time (PRopt) were evaluated as secondary outcome measures. PRopt was defined as ≥90 percentile of operative time for each procedure type. Independent multivariate logistic regression models were generated to examine the impact of these descriptors on the outcomes of interest.

SETTING/PARTICIPANTS

The dataset utilized was the United States National Surgical Quality Improvement Program Participant Use File which leverages data points from over 700 hospitals that range from primary to quaternary care centers. Resident participation was defined as resident involved (RI) or no resident involved (NRI), and stratified by postgraduate year (PGY): 1-3, 4-5, and 6+.

RESULTS

Resident participant data was available for 21,453 (84.5%) uncommon operations with NRI in 25.4% (5447). With regard to resident participation, PGY1-3 were found in 12.6% (2699), PGY4-5 in 50.4% (10,817), and PGY6+ in 11.6% (2490). The overall observed DSM rate was 28.6% and the observed FTR rate was 5.8%. Overall, there was no difference in DSM by RI status (NRI: 1528; 28.1% vs RI: 4602; 28.8%; p = 0.324); however, PGY level was associated with DSM (PGY1-3: 774, 28.7%, PGY4-5: 3210, 29.7%, PGY6+: 618, 24.8%; p < 0.001). Any RI was associated with a lower rate of FTR (5.1%) when compared to NRI (8.3%, p < 0.001) with decreasing FTR events by increasing PGY (PGY1-3: 6.4%, PGY4-5: 5.2%, PGY6+: 3.3%; p < 0.001). After adjustment for patient risk factors, any RI remained associated with a lower likelihood of FTR than NRI (odds ratio: 0.65, 95% confidence interval: 0.49-0.87) while only the PGY4-5 and PGY6+ groups were associated with lower likelihood of FTR in comparison to NRI. RI was associated with PRopt in univariate and multivariable analyses.

CONCLUSIONS

Uncommon operations were associated with substantial DSM. The involvement of PGY4-5 residents was associated with the greatest likelihood of DSM. With increasing PGY of the involved resident, cases with PGY > 5 demonstrated a lower likelihood of risk-adjusted FTR. The explanation for these findings is not clear; however, the involvement of more senior residents in the technical aspects of uncommon operations may lead to improved results.