title: Time-driven activity-based costing to identify opportunities for cost reduction in pediatric appendectomy.
abstract: OBJECTIVE
  As reimbursement programs shift to value-based payment models emphasizing quality and efficient healthcare delivery, there exists a need to better understand process management to unearth true costs of patient care. We sought to identify cost-reduction opportunities in simple appendicitis management by applying a time-driven activity-based costing (TDABC) methodology to this high-volume surgical condition.
  
  
  METHODS
  Process maps were created using medical record time stamps. Labor capacity cost rates were calculated using national median physician salaries, weighted nurse-patient ratios, and hospital cost data. Consumable costs for supplies, pharmacy, laboratory, and food were derived from the hospital general ledger.
  
  
  RESULTS
  Time-driven activity-based costing resulted in precise per-minute calculation of personnel costs. Highest costs were in the operating room ($747.07), hospital floor ($388.20), and emergency department ($296.21). Major contributors to length of stay were emergency department evaluation (270min), operating room availability (395min), and post-operative monitoring (1128min). The TDABC model led to $1712.16 in personnel costs and $1041.23 in consumable costs for a total appendicitis cost of $2753.39.
  
  
  CONCLUSIONS
  Inefficiencies in healthcare delivery can be identified through TDABC. Triage-based standing delegation orders, advanced practice providers, and same day discharge protocols are proposed cost-reducing interventions to optimize value-based care for simple appendicitis.
  
  
  METHODS
  II.
authors.affiliation: Division of Pediatric Surgery, Department of Surgery, Texas Children's Hospital, and Michael E. DeBakey Department of Surgery, Baylor College of Medicine, 6701 Fannin Dr. Suite 1210, Houston, TX 77030.
authors.forename: Yangyang R
authors.initials: YR
authors.lastname: Yu
authors.affiliation: Division of Pediatric Surgery, Department of Surgery, Texas Children's Hospital, and Michael E. DeBakey Department of Surgery, Baylor College of Medicine, 6701 Fannin Dr. Suite 1210, Houston, TX 77030.
authors.forename: Paulette I
authors.initials: PI
authors.lastname: Abbas
authors.affiliation: Decision Support and Cost Accounting, Texas Children's Hospital, 1919 S. Braeswood, MB6206, Houston, TX 77030.
authors.forename: Carolyn M
authors.initials: CM
authors.lastname: Smith
authors.affiliation: Outcomes and Impact Service, Texas Children's Hospital, 6701 Fannin Dr, Suite 650, Houston, TX 77030.
authors.forename: Kathleen E
authors.initials: KE
authors.lastname: Carberry
authors.affiliation: Department of Finance, Texas Children's Health Plan, Texas Children's Hospital, 6330 W. Loop South, Suite 800, Bellaire, TX 77401.
authors.forename: Hui
authors.initials: H
authors.lastname: Ren
authors.affiliation: Section of Emergency Medicine, Department of Pediatrics, Texas Children's Hospital, Baylor College of Medicine, 6621 Fannin Dr. Suite A210, Houston, TX 77030.
authors.forename: Binita
authors.initials: B
authors.lastname: Patel
authors.affiliation: Division of Pediatric Surgery, Department of Surgery, Texas Children's Hospital, and Michael E. DeBakey Department of Surgery, Baylor College of Medicine, 6701 Fannin Dr. Suite 1210, Houston, TX 77030.
authors.forename: Jed G
authors.initials: JG
authors.lastname: Nuchtern
authors.affiliation: Division of Pediatric Surgery, Department of Surgery, Texas Children's Hospital, and Michael E. DeBakey Department of Surgery, Baylor College of Medicine, 6701 Fannin Dr. Suite 1210, Houston, TX 77030. Electronic address: melopez@texaschildrens.org.
authors.forename: Monica E
authors.initials: ME
authors.lastname: Lopez
mesh_terms: D001062:Appendectomy / Q000191:economics*; D001064:Appendicitis / Q000191:economics* / Q000601:surgery; D017046:Cost Savings / Q000379:methods*; D003695:Delivery of Health Care / Q000191:economics*; D017598:Efficiency, Organizational / Q000191:economics*; D004636:Emergency Service, Hospital / Q000191:economics; D017721:Hospital Costs / Q000706:statistics & numerical data*; D006801:Humans; D009873:Operating Rooms / Q000191:economics; D017064:Process Assessment, Health Care; D058996:Quality Improvement / Q000191:economics; D012189:Retrospective Studies; D013781:Texas; D013997:Time Factors
keywords: Appendicitis; Cost analysis; Process improvement; Quality improvement; Time-driven activity-based costing; Value