title: Value based care and bundled payments: Anesthesia care costs for outpatient oncology surgery using time-driven activity-based costing.
abstract: BACKGROUND
  With the movement towards bundled payments, stakeholders should know the true cost of the care they deliver. Time-driven activity-based costing (TDABC) can be used to estimate costs for each episode of care. In this analysis, TDABC is used to both estimate the costs of anesthesia care and identify the primary drivers of those costs of 11 common oncologic outpatient surgical procedures.
  
  
  METHODS
  Personnel cost were calculated by determining the hourly cost of each provider and the associated process time of the 11 surgical procedures. Using the anesthesia record, drugs, supplies and equipment costs were identified and calculated. The current staffing model was used to determine baseline personnel costs for each procedure. Using the costs identified through TDABC analysis, the effect of different staffing ratios on anesthesia costs could be predicted.
  
  
  RESULTS
  Costs for each of the procedures were determined. Process time and costs are linearly related. Personnel represented 79% of overall cost while drugs, supplies and equipment represented the remaining 21%. Changing staffing ratios shows potential savings between 13% and 28% across the 11 procedures.
  
  
  CONCLUSIONS
  TDABC can be used to estimate the costs of anesthesia care. This costing information is critical to assessing the anesthesiology component in a bundled payment. It can also be used to identify areas of cost savings and model costs of anesthesia care. CRNA to anesthesiologist staffing ratios profoundly influence the cost of care. This methodology could be applied to other medical specialties to help determine costs in the setting of bundled payments.
authors.affiliation: The University of Texas M. D. Anderson Cancer Center, USA. Electronic address: kefrench@mdanderson.org.
authors.forename: Katy E
authors.initials: KE
authors.lastname: French
authors.affiliation: Institute for Cancer Care Innovation, The University of Texas M. D. Anderson Cancer Center, USA.
authors.forename: Alexis B
authors.initials: AB
authors.lastname: Guzman
authors.affiliation: Division of Anesthesiology & Critical Care, The University of Texas M. D. Anderson Cancer Center, USA.
authors.forename: Augustin C
authors.initials: AC
authors.lastname: Rubio
authors.affiliation: The University of Texas M. D. Anderson Cancer Center, USA.
authors.forename: John C
authors.initials: JC
authors.lastname: Frenzel
authors.affiliation: The University of Texas M. D. Anderson Cancer Center, USA; Harvard Business School, USA.
authors.forename: Thomas W
authors.initials: TW
authors.lastname: Feeley
mesh_terms: D000556:Ambulatory Surgical Procedures / Q000191:economics*; D000758:Anesthesia / Q000191:economics*; D017046:Cost Savings; D017048:Health Care Costs / Q000706:statistics & numerical data*; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D000071077:Surgical Oncology / Q000191:economics*; D013997:Time Factors; D014481:United States
keywords: Anesthesia costs; Bundled payments; Oncology; TDABC; Value based care