Author(s)
Jonathan C. Simmonds, MD
Russell J. Hollis, BS
Ruby K. Tamberino, MBA
Andrew Scott, MDMark A. Vecchiotti, MD
Affiliation(s)
Tufts Medical Center/Harvard Business School
Abstract:
Educational Objective: At the conclusion of this presentation, the participants should be able to understand how time driven activity based costing can be used to accurately determine the cost of procedures and services within the field of otolaryngology. Objectives: 1) To illustrate how time driven activity based costing (TDABC) can be used to accurately measure procedure and service costs and improve efficiency within the field of otolaryngology; and 2) using TDABC, we estimate the cost of treating obstructive sleep apnea with adenotonsillectomy in pediatric patients. Study Design: Retrospective chart review. Methods: A clinical process map was created for pediatric patients undergoing outpatient adenotonsillectomy for obstructive sleep apnea in an academic medical center. A total of 53 patients were followed through a complete care cycle starting from their initial appointment, through surgery to their postoperative visit. Personnel were timed through each process, and non-personnel costs were gathered from administrative records. Results: Treating obstructive sleep apnea with an adenotonsillectomy in a pediatric patient costs $2,032.71. The initial visit costs $58.73 (2.9%) and lasts 59:40 minutes on average from rooming to checkout. Polysomnography is utilized in 28.6% of patients, contributing $98.45 (4.8%) in costs, and the associated followup visit takes 56:44 minutes and contributes $18.82 (0.9%). Outpatient adenotonsillectomy costs $1,798.33 (88.5%) and takes 79:47 minutes from room turnover to arrival into the PACU. The surgical portion of the procedure takes 22.0 minutes (9:25-34:35 minutes), accounting for $352.77 ($16.03 per minute). Postop care in the PACU costs $25.20 (1.2%) and the postoperative followup visit takes 32:37 minutes, costing $33.19 (1.6%). Conclusions: Time driven activity based costing is an accurate way of measuring the cost of outpatient adenotonsillectomy and predicting utilization of resources. Through this method, healthcare organizations can more efficiently allocate personnel costs and apply overhead to improve efficiency and lower costs.