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Publications
Publications
  • July–August 2018
  • Article
  • Journal of Healthcare Management

Using Time-Driven Activity-Based Costing to Model the Costs of Various Process-Improvement Strategies in Acute Pain Management

By: Keyuri Popat, Kelly Ann Gracia, Alexis B. Guzman and Thomas W. Feeley
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Abstract

Pain control for patients undergoing thoracic surgery is essential for their comfort and for improving their ability to function after surgery, but it can significantly increase costs. Here, we demonstrate how time-driven activity-based costing (TDABC) can be used to assess personnel costs and create process-improvement strategies. We used TDABC to evaluate the cost of providing pain control to patients undergoing thoracic surgery and to estimate the impact of specific process improvements on cost. Retrospective healthcare utilization data, with a focus on personnel costs, were used to assess cost across the entire cycle of acute pain medicine delivery for these patients. TDABC was used to identify possible improvements in personnel allocation, workflow changes, and epidural placement location and to model the cost savings of those improvements. We found that the cost of placing epidurals in the preoperative holding room was less than that of placing epidurals in the operating room. Personnel reallocation and workflow changes resulted in mean cost reductions of 14% with epidurals in the holding room and 7% cost reductions with epidurals in the operating room. Most cost savings were due to redeploying anesthesiologists to duties that are more appropriate and reducing their unnecessary duties by 30%. Furthermore, the change in epidural placement location alone in 80% of cases reduced costs by 18%. These changes did not compromise quality of care. TDABC can model personnel costs and process improvements in delivering specific healthcare services and justify further investigation of process improvements.

Keywords

Time-Driven Activity-Based Costing; Health Care and Treatment; Cost Management; Performance Improvement

Citation

Popat, Keyuri, Kelly Ann Gracia, Alexis B. Guzman, and Thomas W. Feeley. "Using Time-Driven Activity-Based Costing to Model the Costs of Various Process-Improvement Strategies in Acute Pain Management." Journal of Healthcare Management 63, no. 4 (July–August 2018): e76–e85.
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More from the Authors
  • Determining Variable Costs in the Acute Urolithiasis Cycle of Care Through Time-driven Activity-based Costing By: Tyler R. McClintock, David F. Friedlander, Aiden Y. Feng, Mahek A. Shah, Daniel J. Pallin, Steven L. Chang, Angela M. Bader, Thomas W. Feeley, Robert S. Kaplan and George E. Haleblian
  • Developing a Value Framework: Utilizing Administrative Data to Assess an Enhanced Care Initiative By: Casey J. Allen, Jarrod S. Eska, Nikhil G. Thaker, Thomas W. Feeley, Robert S. Kaplan, Ryan W. Huey, Ching-Wei D. Tzeng, Jeffrey E. Lee, Steven J. Frank, Thomas A. Aloia, Vijaya Gottumukkala and Matthew H.G. Katz
  • Value-Based Healthcare in Urology: A Collaborative Review By: Chanan Reitblat, Paul A. Bain, Michael E. Porter, David N. Bernstein, Thomas W. Feeley, Markus Graefen, Santosh Iyer, Matthew J. Resnick, C.J. Stimson, Quoc-Dien Trinh and Boris Gershman
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