Developing a consistent method for costing hospital services.

The purpose of the current investigation was to present a standard method by which an orthopaedic practice can analyze its practice expenses. To accomplish this, a five-step process was developed to analyze practice expenses using a modified version of activity-based costing. In this method, general ledger expenses were assigned to 17 activities that encompass all the tasks and processes typically performed in an orthopaedic practice. These 17 activities were identified in a practice expense study conducted for the American Academy of Orthopaedic Surgeons. To calculate the cost of each activity, financial data were used from a group of 19 orthopaedic surgeons in Houston, Texas. The activities that consumed the largest portion of the employee work force (person hours) were service patients in office (25.0% of all person hours), maintain medical records (13.6% of all person hours), and resolve collection disputes and rebill charges (12.3% of all person hours). The activities that comprised the largest portion of the total expenses were maintain facility (21.4%), service patients in office (16.0%), and sustain business by managing and coordinating practice (13.8%). The five-step process of analyzing practice expenses was relatively easy to perform and it may be used reliably by most orthopaedic practices.

Accounting↗

PubMed2000

Cost identification of abdominal aortic aneurysm imaging by using time and motion analyses.

PURPOSE: To compare the costs of performing helical computed tomographic (CT) angiography with three-dimensional rendering versus intraarterial digital subtraction angiography (DSA) for preoperative imaging of abdominal aortic aneurysms (AAAs). MATERIALS AND METHODS: A single observer determined the variable direct costs of performing nine intraarterial DSA and 10 CT angiographic examinations in age- and general health-matched patients with AAA by using time and motion analyses. All personnel directly involved in the cases were tracked, and the involvement times were recorded to the nearest minute. All material items used during the procedures were recorded. The cost of labor was determined from personnel reimbursement data, and the cost of materials, from vendor pricing. The variable direct costs of laboratory tests and using the ambulatory treatment unit for postprocedural monitoring, as well as all fixed direct costs, were assessed from hospital accounting records. The total costs were determined for each procedure and compared by using the Student t test and calculating the CIs. RESULTS: The mean total direct cost of intraarterial DSA (+/- SD) was $1,052 +/- 71, and that of CT angiography was $300 +/- 30, which are significantly different (P < 4.1 x 10(-11)). With 95% confidence, intraarterial DSA cost 3.2-3.7 times more than CT angiography for the assessment of AAA. CONCLUSION: Assuming equal diagnostic utility and procedure-related morbidity, institutions may have substantial cost savings whenever CT angiography can replace intraarterial DSA for imaging AAAs.

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