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Time-driven activity-based costing: A dynamic value assessment model in pediatric appendicitis
Yangyang R Yu1, Paulette I Abbas1, Carolyn M Smith2
1Division of Pediatric Surgery, Department of Surgery, Texas Children's Hospital and Michael E. DeBakey Department of Surgery, Baylor College of Medicine, 6701 Fannin Dr. Suite 1210, Houston, TX 77030.
Insights
Time-driven activity-based costing (TDABC) effectively reduced pediatric appendicitis care costs by 11% and hospitalization duration by 51%. This value-based healthcare approach dynamically models interventions for continuous assessment.
Area of Science:
- Healthcare Management
- Health Economics
- Pediatric Surgery
Background:
- Value-based healthcare delivery is a key focus of healthcare reform.
- Accurate appraisal of healthcare interventions is crucial for optimizing patient care and resource allocation.
- Pediatric appendicitis management presents opportunities for process improvement.
Purpose of the Study:
- To hypothesize that time-driven activity-based costing (TDABC) can appraise healthcare interventions in pediatric appendicitis.
- To evaluate the impact of specific interventions on the cost and duration of appendicitis care.
- To demonstrate the utility of TDABC in modeling process improvements.
Main Methods:
- Implementation of triage-based standing delegation orders, surgical advanced practice providers, and a same-day discharge protocol.
- Creation of post-intervention process maps using electronic time stamp data for simple appendicitis cases.
- Determination of total personnel and consumable costs using TDABC methodology.
Main Results:
- Interventions reduced emergency department and pre-operative floor duration and costs.
- Same-day discharge protocol eliminated post-operative floor costs.
- Overall, total direct costs decreased by 11% and hospitalization duration by 51%.
Conclusions:
- Time-driven activity-based costing (TDABC) dynamically models healthcare delivery changes resulting from process improvements.
- TDABC is an effective tool for continuously assessing the impact of interventions on the value of appendicitis care.
- The study supports the application of TDABC in value-based healthcare initiatives.
Objectives:
Healthcare reform policies are emphasizing value-based healthcare delivery. We hypothesize that time-driven activity-based costing (TDABC) can be used to appraise healthcare interventions in pediatric appendicitis.
Methods:
Triage-based standing delegation orders, surgical advanced practice providers, and a same-day discharge protocol were implemented to target deficiencies identified in our initial TDABC model. Post-intervention process maps for a hospital episode were created using electronic time stamp data for simple appendicitis cases during February to March 2016. Total personnel and consumable costs were determined using TDABC methodology.
Results:
The post-intervention TDABC model featured 6 phases of care, 33 processes, and 19 personnel types. Our interventions reduced duration and costs in the emergency department (-41min, -$23) and pre-operative floor (-57min, -$18). While post-anesthesia care unit duration and costs increased (+224min, +$41), the same-day discharge protocol eliminated post-operative floor costs (-$306). Our model incorporating all three interventions reduced total direct costs by 11% ($2753.39 to $2447.68) and duration of hospitalization by 51% (1984min to 966min).
Conclusion:
Time-driven activity-based costing can dynamically model changes in our healthcare delivery as a result of process improvement interventions. It is an effective tool to continuously assess the impact of these interventions on the value of appendicitis care.
Level Of Evidence:
II, Type of study: Economic Analysis.