Time-driven activity-based costing of total knee replacements in Karachi, Pakistan

Abstract

IntroductionOsteoarthritis of the knee has been identified as the most common disability in Pakistan. Total knee replacement (TKR) surgery is the curative treatment for advanced osteoarthritis of the knee; however, cost remains one of the barriers to effective and timely service delivery.ObjectiveWe conducted a time-driven activity-based costing (TDABC) analysis of TKR to identify major cost drivers and areas for process improvement.Methods and analysisWe performed a prospective TDABC analysis of patients who underwent bilateral TKR at The Indus Hospital (TIH) during a 14-month period from October 2015 to December 2016. Detailed process maps were developed for each phase of the care cycle. Time durations and costs were allocated to each resource utilised and aggregated across the care cycle, including personnel, direct and indirect costs.ResultsWe identified seven care phases for a complete TKR care cycle and created their detailed process maps. Major time contributors were ward stay and discharge (20 160 min), TKR surgery (563 min) and surgical admission (333 min). Overall, 92.10% of time is spent during the ward stay and discharge phase of care. Patients remain hospitalised for an average of 14 days postoperatively. Overall institutional cost of a TKR at TIH was US$4360.51 (Pakistani rupees 456 981.17) per bilateral TKR surgery. The overall primary cost drivers for the full bundle of care were consumables used during TKR surgery itself, consumables utilised in the wards and personnel costs contributing 57.64%, 27.45% and 12.03% of total costs, respectively.ConclusionUtilising TDABC allowed us to obtain a granular analysis of time and cost that was subsequently used to inform quality process improvement initiatives. In low-resource settings, such as Pakistan, TDABC has the potential to be a useful tool to guide resource allocation and process improvement.

Utilizing Lean Methodology and Time-Driven Activity-Based Costing Together

“…Step 7 is to calculate the total cost of patient care. Several studies have addressed elements of applying TDABC to the total joint arthroplasty arena 12-17 . Step 2 is often one of the most difficult steps to accomplish, as it can be difficult to garner institutional resources and buy-in to create a comprehensive care delivery value chain (CDVC) model.…”

A Multi-Disciplinary Review of Time-Driven Activity-Based Costing: Practical Considerations for Spine Surgery

“…7,8,12,16 Some used this general calculation for costs such as administration and insurance, but space and electricity were calculated based on specific consumption for each process. 15 Akhavan et al calculated these indirect costs based on their consumption for each activity, estimating how many full-time equivalent employees were associated with each activity (from human resources, finance, and IT). 3 The majority of indirect costs in these studies were calculated as a fraction of the general overhead found in most hospital databases.…”

Time‐driven activity‐based costing as a strategy to increase efficiency: An analyses of interventional coronary procedures

“…Pre-procedure, procedure, and post-procedure phases were observed as described in previous studies. 17,20,21 At the pre-procedure phase, patients are admitted and prepared for the procedure at the haemodynamic unit; the procedure phase is substantially performed by physicians with the support of nurses and nurse technicians at the haemodynamic unit; and the post-procedure phases include the period of patient recovery after ICP in the haemodynamic unit before transfer to another unit. Different variables were selected for evaluation personnel, corporate and divisional allocations (hospital structure), and medications and materials related to each procedure phase.…”