Progress Towards Value in Healthcare: Implementation of Time-Driven Activity-Based Costing (TDABC) in Hematopoietic Stem Cell Transplantation

As healthcare institutions transition to value-based payment systems, there is an increasing need to identify the true costs of delivering health services. Time-Driven Activity-Based Costing (TDABC) methodology aims to quantify the actual cost and profitability of a procedure. Primary objectives of the reported project include: assessment of the feasibility of implementing TDABC and determination of the accuracy of the costing information for autologous transplantation (ASCT). Results of a pilot initiative implementing TDABC to analyze a bone marrow aspirate and biopsy procedure (BMABx) are reported. The TDABC process involves five distinct steps, including identifying resources used for the specific procedure, defining costs of each resource, estimating the practice capacity of the resources, calculating the cost of personnel per time unit and identifying the time units required per procedure, which result in the calculation of cost per procedure. Process maps were developed for ASCT and BMABx. Comparative analysis of three distinct models of care was done: 1. Physician (MD) model: procedure completed by a physician (current clinical practice); 2. Advanced Practice Provider (APP) model: clinic staffed by APP who completes procedure; 3. Joint model: MD and APP are present. Reimbursement according to payer mix was included in the analysis. Although the APP model led to reimbursement payment loss per procedure, it proved to be the most cost-effective care model. Based on 2000 procedures/year, we estimated that switching to an APP clinic would free 500 hours of MD time/year (conservative estimate based on 50% of calculated time). This research resulted in practice change, with implementation of an APP model within the Adult BMT Service. TDABC can be implemented to evaluate clinical processes, and can result in practice change based on accurate cost data. This methodology and findings from this pilot study are being extended to study of the comprehensive ASCT episode of care.Table 1Comparative Analysis of Bone Marrow Aspirate and Biopsy Procedure Using an Average Physician SalaryModel 1: MDModel 2: APPModel 3: JointDescriptionCurrent PracticeAPP-run BM clinicMD present for pertinent procedure partTotal Time of Procedure Involvement (min) for MD31015Cost of MD Personnel/Time77.5$037.5Cost of NP Personnel/Time$037.5214592337.52145923Total Cost of Combined MD/NP Personnel$77.50$37.52$75.02Clinical Care Cost$271.20$238.44$262.61Reimbursement Payment Loss$0($22.83)$0Total Care Cost$271.20$261.27$262.61Cost Differential (Savings)/Procedure$0$9.93$8.59*Physician salary average $150/hour. Open table in a new tab *Physician salary average $150/hour.