Application of Time‐Driven Activity‐Based Costing for Head and Neck Microvascular Free Flap Reconstruction

Abstract

ObjectiveTraditional hospital accounting fails to provide an accurate cost of complex surgical care. Here we describe the application of time‐driven activity‐based costing (TDABC) to characterize costs of head and neck oncologic procedures involving free tissue transfer.Study DesignRetrospective cohort study.SettingSingle tertiary academic medical center.MethodsAn analysis of head and neck oncologic procedures involving microvascular free flap reconstruction from 2018 to 2020 (n = 485) was performed using TDABC methodology to measure cost across operative case and postoperative admission, using quantity of time and cost per unit of each resource to characterize resource utilization. Univariate and generalized linear mixed models were used to examine associations between patient and hospital characteristics and cost of care delivery.ResultsThe total cost of care delivery was $41,905.77 ± 21,870.27 with operating room (OR) supplies accounting for only 10% of the total cost. Multivariable analyses identified significant cost drivers including operative time, postoperative length of stay, number of return trips to the OR, postoperative complication, number of free flaps performed, and patient transfer from another hospital or via emergency department admission (P < .05).ConclusionOperative time and postoperative length of stay, but not operative supplies, were primary drivers of cost of care for head and neck oncology cases involving free tissue transfer. TDABC offers granular cost characterization to inform cost optimization through unused capacity identification and postoperative admission efficiencies.