Utilizing Time-driven Activity-based Costing to Determine Open Radical Cystectomy and Ileal Conduit Surgical Episode Cost Drivers

Objectives
Patients undergoing radical cystectomy represent a particularly resource-intensive patient population. Time-driven activity based costing (TDABC) assigns time to events and then costs are based on the people involved in providing care for specific events. To determine the major cost drivers of radical cystectomy care we used a TDABC analysis for the cystectomy care pathway.
Subjects and methods
We retrospectively reviewed a random sample of 100 patients out of 717 eligible patients undergoing open radical cystectomy and ileal conduit for bladder cancer at our institution between 2012 and 2015. We defined the cycle of care as beginning at the preoperative clinic visit and ending with the 90-day postoperative clinic visit. TDABC was carried out with construction of detailed process maps. Capacity cost rates were calculated and the care cycle was divided into 3 phases: surgical, inpatient, and readmissions. Costs were normalized to the lowest cost driver within the cohort.
Results
The mean length of stay was 6.9 days. Total inpatient care was the main driver of cost for radical cystectomy making up 32% of the total costs. Inpatient costs were mainly driven by inpatient staff care (76%). Readmissions were responsible for 29% of costs. Surgery was 31% of the costs, with the majority derived from operating room staff costs (65%).
Conclusion
The major driver of cost in a radical cystectomy pathway is the inpatient stay, closely followed by operating room costs. Surgical costs, inpatient care and readmissions all remain significant sources of expense for cystectomy and efforts to reduce cystectomy costs should be focused in these areas.