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Using Time-Driven Activity-Based Costing to Demonstrate Value in Perioperative Care: Recommendations and Review from the Society for Perioperative Assessment and Quality Improvement (SPAQI)

  • Systems-Level Quality Improvement
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Abstract

A shift in healthcare payment models from volume toward value-based incentives will require deliberate input into systems development from both perioperative clinicians and administrators to ensure appropriate recognition of the value of all services provided—particularly ones that are not reimbursable in current fee-for-service payment models. Time-driven activity-based costing (TDABC) methodology identifies cost drivers and reduces inaccurate costing based on siloed budgets. Inaccurate costing also results from the fact that current costing methods use charges and there has been tremendous cost shifting throughout health care. High cost, high variability processes can be identified for process improvement. As payment models inevitably evolve towards value-based metrics, it will be critical to knowledgably participate in the coordination of these changes. This document provides 8 practical Recommendations from the Society for Perioperative Assessment and Quality Improvement (SPAQI) aimed at outlining the principles of TDABC, creating process maps for patient workflows, understanding payment structures, establishing physician alignment across service lines to create integrated practice units to facilitate development of evidence-based pathways for specific patient risk groups, establishing consistent care delivery, minimizing variability between physicians and departments, utilizing data analytics and information technology tools to track progress and obtain actionable data, and using TDABC to create costing transparency.

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Authors and Affiliations

  1. Harvard College, Harvard University, Boston, MA, USA

    Olivia Allin

  2. Center for Surgery and Public Health, Brigham and Women’s Hospital, Boston, MA, USA

    Richard D. Urman & Angela M. Bader

  3. Department of Anesthesiology, Perioperative and Pain Medicine, Brigham and Women’s Hospital, Harvard Medical School, 75 Francis Street CWN L1, Boston, MA, 02115, USA

    Richard D. Urman & Angela M. Bader

  4. Department of Anesthesiology, Wake Forest School of Medicine, Winston-Salem, NC, USA

    Angela F. Edwards

  5. Department of Anesthesiology, Duke University School of Medicine, Durham, NC, USA

    Jeanna D. Blitz

  6. Department of Medicine, Medical College of Wisconsin, Milwaukee, WI, USA

    Kurt J. Pfeifer

  7. Institute for Strategy and Competitiveness, Harvard Business School, Harvard University, Boston, MA, USA

    Thomas W. Feeley

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  1. Olivia Allin
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  2. Richard D. Urman
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Correspondence to Richard D. Urman.

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This article is part of the Topical Collection on Systems-Level Quality Improvement

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Allin, O., Urman, R.D., Edwards, A.F. et al. Using Time-Driven Activity-Based Costing to Demonstrate Value in Perioperative Care: Recommendations and Review from the Society for Perioperative Assessment and Quality Improvement (SPAQI). J Med Syst 44, 25 (2020). https://doi.org/10.1007/s10916-019-1503-2

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  • DOI: https://doi.org/10.1007/s10916-019-1503-2

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