Developing radiology procedure cost standards

Containing costs is at the forefront of healthcare management, particularly as managed care replaces fee-for-service care. The first step in costs is to gain an understanding of the "building blocks" or components of procedure costs. The department of radiology at Duke University Medical Center and Health System, in conjunction with the department of management engineering, developed labor and supply standards to predict direct procedure costs throughout the radiology department, where 285,000 procedures are performed annually. This team concept resulted in a consistent approach to building procedure standards that predict direct costs across all sections. Step by step instructions are given for the following standards. Variable labor standards represent the average amount of staff time required for each procedure. Variable supply standards represent the average amount of consumable supply resources required per procedure. Fixed labor time standards predict the amount of fixed time resources necessary to operate the department of radiology at Duke University hospital. Cost per procedure uses the standards developed in the other sections. These basic steps will help readers determine their own direct costs per procedure for most radiology procedures (excluding capital and indirect costs). When these standards and costs are identified, the next step is to identify the areas to reduce such costs without affecting the quality of patient care.