Time-driven activity-based costing: A dynamic value assessment model in pediatric appendicitis

Abstract

ObjectivesHealthcare reform policies are emphasizing value-based healthcare delivery. We hypothesize that time-driven activity-based costing (TDABC) can be used to appraise healthcare interventions in pediatric appendicitis. MethodsTriage-based standing delegation orders, surgical advanced practice providers, and a same-day discharge protocol were implemented to target deficiencies identified in our initial TDABC model. Post-intervention process maps for a hospital episode were created using electronic time stamp data for simple appendicitis cases during February to March 2016. Total personnel and consumable costs were determined using TDABC methodology. ResultsThe post-intervention TDABC model featured 6 phases of care, 33 processes, and 19 personnel types. Our interventions reduced duration and costs in the emergency department (−41min, −$23) and pre-operative floor (−57min, −$18). While post-anesthesia care unit duration and costs increased (+224min, +$41), the same-day discharge protocol eliminated post-operative floor costs (−$306). Our model incorporating all three interventions reduced total direct costs by 11% ($2753.39 to $2447.68) and duration of hospitalization by 51% (1984min to 966min). ConclusionTime-driven activity-based costing can dynamically model changes in our healthcare delivery as a result of process improvement interventions. It is an effective tool to continuously assess the impact of these interventions on the value of appendicitis care. Level of evidenceII, Type of study: Economic Analysis.