Value based care and bundled payments: Anesthesia care costs for outpatient oncology surgery using time-driven activity-based costing

Katy Elizabeth French, Alexis B. Guzman, Augustin C. Rubio, John C Frenzel, Thomas W Feeley

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

Background With the movement towards bundled payments, stakeholders should know the true cost of the care they deliver. Time-driven activity-based costing (TDABC) can be used to estimate costs for each episode of care. In this analysis, TDABC is used to both estimate the costs of anesthesia care and identify the primary drivers of those costs of 11 common oncologic outpatient surgical procedures. Methods Personnel cost were calculated by determining the hourly cost of each provider and the associated process time of the 11 surgical procedures. Using the anesthesia record, drugs, supplies and equipment costs were identified and calculated. The current staffing model was used to determine baseline personnel costs for each procedure. Using the costs identified through TDABC analysis, the effect of different staffing ratios on anesthesia costs could be predicted. Results Costs for each of the procedures were determined. Process time and costs are linearly related. Personnel represented 79% of overall cost while drugs, supplies and equipment represented the remaining 21%. Changing staffing ratios shows potential savings between 13% and 28% across the 11 procedures. Conclusions TDABC can be used to estimate the costs of anesthesia care. This costing information is critical to assessing the anesthesiology component in a bundled payment. It can also be used to identify areas of cost savings and model costs of anesthesia care. CRNA to anesthesiologist staffing ratios profoundly influence the cost of care. This methodology could be applied to other medical specialties to help determine costs in the setting of bundled payments.

Original languageEnglish (US)
Pages (from-to)173-180
Number of pages8
JournalHealthcare
Volume4
Issue number3
DOIs
StatePublished - Jan 1 2016

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Ambulatory Surgical Procedures
Anesthesia
Costs and Cost Analysis
Episode of Care
Equipment and Supplies
Drug Costs
Anesthesiology
Cost Savings
Primary Health Care

Keywords

  • Anesthesia costs
  • Bundled payments
  • Oncology
  • TDABC
  • Value based care

ASJC Scopus subject areas

  • Health Policy

Cite this

Value based care and bundled payments : Anesthesia care costs for outpatient oncology surgery using time-driven activity-based costing. / French, Katy Elizabeth; Guzman, Alexis B.; Rubio, Augustin C.; Frenzel, John C; Feeley, Thomas W.

In: Healthcare, Vol. 4, No. 3, 01.01.2016, p. 173-180.

Research output: Contribution to journalArticle

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