Applying Cost Accounting to Operating Room Staffing in Otolaryngology

Balakrishnan, Karthik; Goico, Brian; Arjmand, Ellis M.

doi:10.1177/0194599814568273

Cited by 33 publications

(12 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Efficiency is possible through improving outcome and/or reducing cost. Cost factors contributing for the cost of services was used to redesign the process and estimate the amount of revenue that could be increased as the result of reduced cost of rendering services [ 15 ]. Cost information has paramount importance for providing services at reasonable price and estimate the amount of revenue collected from patients.…”

Section: Introductionmentioning

confidence: 99%

The revenue generated from clinical chemistry and hematology laboratory services as determined using activity-based costing (ABC) model

Adane

Abiy

Desta

2015

Cost Eff Resour Alloc

View full text Add to dashboard Cite

Background The rapid and continuous growth of health care cost aggravates the frequently low priority and less attention given in financing laboratory services. The poorest countries have the highest out-of-pocket spending as a percentage of income. Higher charges might provide a greater potential for revenue. If fees raise quality sufficiently, it can enhance usage. Therefore, estimating the revenue generated from laboratory services could help in capacity building and improved quality service provision.Methods Panel study design was used to determine revenue generated from clinical chemistry and hematology services at Tikur Anbessa Specialized Teaching Hospital, Addis Ababa, Ethiopia. Activity-Based Costing (ABC) model was used to determine the true cost of tests performed from October 2011 to December 2011 in the hospital. The principle of Activity-based Costing is that activities consume resources and activities consumed by services which incur the costs and hence service takes the cost of resources. All resources with costs are aggregated with the established casual relationships. The process maps designed was restructured in consultation with the senior staffs working and/or supervising the laboratory and pretested checklists were used for observation. Moreover, office documents, receipts and service bills were used while collecting data. The amount of revenue collected from services was compared with the cost of each subsequent test and the profitability or return on investment (ROI) of services was calculated. Data were collected, entered, cleaned, and analyzed using Microsoft Excel 2007 software program and Statistical Software Package for Social Sciences version 19 (SPSS). Paired sample t test was used to compare the price and cost of each test. P-value less than 0.05 were considered as statistically significant.ResultA total of 25,654 specimens were analyzed during 3 months of regular working hours. The total numbers of clinical chemistry and hematology tests performed during the study period were 45,959 (66.1 %) and 23,570 (33.9 %), respectively. Only 274, 386 (25.3 %) Ethiopian Birr (ETB) was recovered from the total cost of 1,086,008.09 ETB incurred on clinical chemistry and hematology laboratory tests. The result showed that, about 133,821 (12.32 %) ETB was revenue not collected from out-of-pocket payments that was paid for the services as a result of under pricing. The result showed that 18 out of 20 laboratory tests were under priced. The cost burden related to free Anti Retro-viral Therapy (ART) services was 285,979.82 (26.3 %) ETB.ConclusionThe cost per test estimated was significantly different to the existing price. About 90 % of the tests were under priced. This information could warn the hospital to reconsider resetting prices of these tests profitability ration less than 1. The revenue collected could help to build capacity, upscale quality, and sustainable service delivery.

show abstract

Section: Introductionmentioning

confidence: 99%

The revenue generated from clinical chemistry and hematology laboratory services as determined using activity-based costing (ABC) model

Adane

Abiy

Desta

2015

Cost Eff Resour Alloc

View full text Add to dashboard Cite

show abstract

“…By analyzing the cost of a health care provider's time, TDABC better links cost to specific quality outcomes. [20][21][22] Such a model could have specific benefits over the top-down approach used by the authors' institution. For example, differences in surgeon speed, the presence of surgical trainees, and operational delays can all impact the use of human capital in a care cycle.…”

Section: Discussionmentioning

confidence: 99%

“…TDABC calculates total care cycle costs based on cost‐per‐minute salaries. By analyzing the cost of a health care provider's time, TDABC better links cost to specific quality outcomes 20‐22 . Such a model could have specific benefits over the top‐down approach used by the authors' institution.…”

Section: Discussionmentioning

confidence: 99%

Redefining “Value” in Surgery: Development of a Comprehensive Value Score for Outpatient Endocrine Surgery

Ayoub

Noel

Orloff

et al. 2023

Otolaryngol.--head neck surg.

Self Cite

View full text Add to dashboard Cite

ObjectiveThe value‐based healthcare model aims to improve the quality of care and lower health care costs. The standard value equation (ie, Value = Quality/Cost), while conceptually useful, is grossly oversimplified and lacks clinical relevance. This study introduces a more detailed value equation that generates disease‐specific value scores and incorporates real‐world clinical and cost data to demonstrate its use.Study DesignProspective observational study.SettingTertiary institution.MethodsA comprehensive new health care value equation was developed that includes 23 unique inputs. Sixteen inputs represent quality (numerator) and 7 inputs represent cost (denominator). Patients undergoing thyroid or parathyroid surgery were enrolled, and data were entered into the new equation to generate surgery‐specific value scores for each patient. A subanalysis was performed for telehealth visits.ResultsTen patients were enrolled (60% female) with an average age of 62 years. The average total monetary cost per patient was $41,884 ($27,885 direct). Across all patients, the average total quality score was 0.99, and the cost score was 6.1, resulting in a final value score of 0.19. A subanalysis showed that changing a postoperative visit from in‐person to telehealth would increase the value score by 0.66%.ConclusionThis analysis creates a comprehensive value equation for surgical services that incorporates the complexity of modern surgical care. The new equation includes objective and subjective outcomes and health equity, quantitatively compares the value of different surgical interventions and health care services, illustrates how specific interventions can lead to the higher value of care, and can serve as the framework for future value equations.

show abstract

“…Within healthcare, TDABC has been applied to several medical care pathways (18,19), including endoscopic sinus surgery (20), tonsillectomy (21), arthroplasty (22), head and neck surgery (23), heart valve surgery (13), anesthesiology care (14), and complex neurosurgery procedures (24). The team performing the TDABC for AP CT consisted of a business manager for the department of radiology, value (industrial) engineers, financial analysts, physicians, technologists, and the CT manager.…”

Section: Time-driven Activity-based Costing (Tdabc)mentioning

confidence: 99%

Dissecting Costs of CT Study: Application of TDABC (Time-driven Activity-based Costing) in a Tertiary Academic Center

Anzai

Heilbrun

Haas³

et al. 2017

Academic Radiology

View full text Add to dashboard Cite

Rationale and Objectives: The lack of understanding of the real costs (not charge) of delivering healthcare services poses tremendous challenges in the containment of healthcare costs. In this study, we applied an established cost accounting method, the timedriven activity-based costing (TDABC), to assess the costs of performing an abdomen and pelvis computed tomography (AP CT) in an academic radiology department and identified opportunities for improved efficiency in the delivery of this service. Materials and Methods: The study was exempt from an institutional review board approval. TDABC utilizes process mapping tools from industrial engineering and activity-based costing. The process map outlines every step of discrete activity and duration of use of clinical resources, personnel, and equipment. By multiplying the cost per unit of capacity by the required task time for each step, and summing each component cost, the overall costs of AP CT is determined for patients in three settings, inpatient (IP), outpatient (OP), and emergency departments (ED). Results: The component costs to deliver an AP CT study were as follows: radiologist interpretation: 40.1%; other personnel (scheduler, technologist, nurse, pharmacist, and transporter): 39.6%; materials: 13.9%; and space and equipment: 6.4%. The cost of performing CT was 13% higher for ED patients and 31% higher for inpatients (IP), as compared to that for OP. The difference in cost was mostly due to non-radiologist personnel costs. Conclusions: Approximately 80% of the direct costs of AP CT to the academic medical center are related to labor. Potential opportunities to reduce the costs include increasing the efficiency of utilization of CT, substituting lower cost resources when appropriate, and streamlining the ordering system to clarify medical necessity and clinical indications.

show abstract

Applying Cost Accounting to Operating Room Staffing in Otolaryngology

Abstract: Time-driven activity-based costing allows detailed understanding of not only personnel costs but also how personnel time is used. This in turn allows testing of alternative staffing models to decrease unused personnel capacity and increase efficiency.

Cited by 33 publications

References 4 publications

The revenue generated from clinical chemistry and hematology laboratory services as determined using activity-based costing (ABC) model

The revenue generated from clinical chemistry and hematology laboratory services as determined using activity-based costing (ABC) model

Redefining “Value” in Surgery: Development of a Comprehensive Value Score for Outpatient Endocrine Surgery

Dissecting Costs of CT Study: Application of TDABC (Time-driven Activity-based Costing) in a Tertiary Academic Center

Contact Info

Product

Resources

About