Comparative Costs of Advanced Proton and Photon Radiation Therapies

Nikhil G. Thaker; Steven J. Frank; Thomas W. Feeley

Article | Journal of Comparative Effectiveness Research

Comparative Costs of Advanced Proton and Photon Radiation Therapies: Lessons from Time-driven Activity-based Costing in Head and Neck Cancer

by Nikhil G. Thaker, Steven J. Frank and Thomas W. Feeley

Abstract

Time-driven activity-based costing (TDABC) is an innovative costing tool in healthcare that can be used to directly compare the true cost of competing technologies over the full care cycle. Rather than only comparing therapeutic effectiveness over a limited number of outcome measures, healthcare stakeholders will need to move toward comparing the value of care delivery and therefore the cost of therapies. Measuring the value of advanced technologies like proton beam therapy versus intensity-modulated radiation therapy (IMRT) is especially crucial, given the high upfront cost of developing, building, and delivering care with these modalities. An incomplete understanding of the value of costly, yet effective, technologies could impede medical innovation and decrease the quality of cancer care through a reduction of patient access by third-party payers. With TDABC, providers may begin to uncover clinical situations in which higher-cost, advanced therapies are actually justified over the full episodic care cycle. Understanding provider costs will become even more important as healthcare reform transitions to value-based purchasing.

Keywords: head and neck cancer; IMRT; proton therapy; Time-Driven ABC; Technology; Activity Based Costing and Management; Medical Specialties;

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Citation:

Thaker, Nikhil G., Steven J. Frank, and Thomas W. Feeley. "Comparative Costs of Advanced Proton and Photon Radiation Therapies: Lessons from Time-driven Activity-based Costing in Head and Neck Cancer." Journal of Comparative Effectiveness Research 4, no. 4 (2015): 297–301.

At one point or another in our life, we all become consumers of the health care industry. Indeed, health care affects everyone and encompasses a diverse set of services from childbirth, to illness prevention, to the management of chronic disease and end-of-life care. Health care in the United States is executed through a complex set of interrelationships between three distinct parties: payers, providers, and consumers. Each group has its own perspective accompanied by a set of unique incentives, which complicate the adoption of a value-based health care system. To transform the American health care delivery system, all participants including patients, physicians, employers, insurance companies, and the government need to recognize that value is best defined as “a given health outcome per dollar of cost expended.” In this article, we examine some of the challenges to creating and implementing a value-based health care system against the backdrop of a turbulent industry and consider the implications for the anesthesiologist.

Article | NEJM Catalyst | November 8, 2018

Transitioning Payment Models: Fee-for-Service to Value-Based Care

Thomas W. Feeley and Namita Seth Mohta

In a survey of the NEJM Catalyst Insights Council in July 2018, 42% of respondents say they think value-based reimbursement models will be the primary revenue model for U.S. health care. Indeed, this transition is already happening. Respondents report that a quarter of reimbursement at their organizations is based on value, on average. While three-quarters of their revenue remains fee-for-service, we see a remarkable change to a reimbursement system that was static for decades. In particular, survey respondents’ organizations are pursuing two value-based strategies: accountable care organizations, which often use capitated payments, and bundled payments. Nearly half (46%) of respondents say value-based contracts significantly improve the quality of care, and another 42% say value-based contracts significantly lower the cost of care. The survey identifies the leading barriers to implementing value-based reimbursement models. Infrastructure requirements, including information technology (indicated by 42% of respondents), and changing regulation/policy (34%) are the top two. There is strong consensus on the broad metrics that are most important for measuring value-based care. Outcome measures top the list, with 60% of respondents saying they are extremely important. This survey suggests that many in health care see value-based reimbursement as a real solution to the nation’s current health care crisis.

Keywords: payment methods; value-based healthcare reimbursements; Health Care and Treatment; Value; Transformation;

Citation:

Feeley, Thomas W., and Namita Seth Mohta. "Transitioning Payment Models: Fee-for-Service to Value-Based Care." NEJM Catalyst (November 8, 2018). View Details

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Patients and providers are frustrated with seemingly endless data entry. We used our patients’ vested interest in their own health care by actively engaging them in the entry of their own medical information into the EHR. Prior to the implementation of the new EHR we to developed an electronic version of a patient questionnaire that had been designed and vetted by a group of subspecialty experts. We integrated that survey into our EHR. To assess the effects of our new EHR system and the new process flow for patients, we utilized time-driven activity-based costing (TDABC). One year after the implementation of the new system, TDABC analysis demonstrated cost savings of 19% and a 10-minute decrease in provider data-entry time. Any EHR system that allows the patient to input data is useful in that it can save patients and providers time and frustration, can allow for advanced care planning, and can help to ensure transparency of patient information throughout the institution.

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Comparative Costs of Advanced Proton and Photon Radiation Therapies: Lessons from Time-driven Activity-based Costing in Head and Neck Cancer

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