Determining Variable Costs in the Acute Urolithiasis Cycle of Care Through Time-Driven Activity-Based Costing.

OBJECTIVE: To characterize full cycle of care costs for managing an acute ureteral stone using time-driven activity-based costing. METHODS: We defined all phases of care for patients presenting with an acute ureteral stone and built an overarching process map. Maps for sub-processes were constructed through interviews with providers and direct observation of clinical spaces. This facilitated calculation of cost per minute for all aspects of care delivery, which were multiplied by associated process times. These were added to consumable costs to determine cost for each specific step and later aggregated to determine total cost for each sub-process. We compared costs of eight common clinical pathways for acute stone management, defining total cycle of care cost as the sum of all sub-processes that comprised each pathway. RESULTS: Cost per sub-process included $920 for emergency department (ED) care, $1665 for operative stent placement, $2368 for percutaneous nephrostomy tube placement, $106 for urology clinic consultation, $238 for preoperative center visit, $4057 for ureteroscopy with laser lithotripsy (URS), $2923 for extracorporeal shock wave lithotripsy, $169 for clinic stent removal, $197 for abdominal x-ray, and $166 for ultrasound. The lowest cost pathway ($1388) was for medical expulsive therapy, whereas the most expensive pathway ($8002) entailed a repeat ED visit prompting temporizing stent placement and interval URS. CONCLUSION: We found a high degree of cost variation between care pathways common to management of acute ureteral stone episodes. Reliable cost accounting data and an understanding of variability in clinical pathway costs can inform value-based care redesign as payors move away from pure fee-for-service reimbursement.

Hospital Charges for Urologic Surgery Episodes of Care Are Rising Despite Declining Costs.

OBJECTIVE: To investigate the temporal relationship of hospital charges relative to recorded costs for surgical episodes of care. PATIENTS AND METHODS: This retrospective cohort study selected individuals who underwent any of 8 index urologic surgical procedures at 392 unique institutions from January 1, 2005, through December 31, 2015. For each surgical encounter, cost and charge data reported by hospitals were extracted and adjusted to 2016 US dollars. Trend analysis and multivariable logistic regression modeling were used to assess outcomes. The primary outcome was trend in median charge and cost. Secondary outcomes consisted of hospital characteristics associated with membership in the highest quartile of institutional charge-to-cost ratio. RESULTS: Cohort-level median cost per encounter trended down from $6824 in 2005 to $5586 in 2015 (P for trend<.001), and charges increased from $20,210 to $25,773 during the same period (P for trend<.001). Hospitals in the highest quartile of institutional charge-to-cost ratio were more likely to be safety net, nonteaching, urban, lower surgical volume, smaller, and located outside the Midwest (P<.001 for each characteristic). CONCLUSION: The pricing trends shown herein could indicate some success in cost-containment for surgical episodes of care, although higher hospital charges may be increasingly used to bolster reimbursement from third-party payers and to compensate for escalating costs in other areas.

How Have Hospital Pricing Practices for Surgical Episodes of Care Responded to Affordable CareAct-Related Medicaid Expansion?

OBJECTIVE: To determine how Medicaid expansion under the Affordable Care Act of 2010 (ACA) has affected hospital pricing practices for surgical episodes of care. METHODS: Given that safety net hospitals would be more vulnerable to decreasing reimbursement due to an increase in proportion of Medicaid patients, we utilized the Premier Healthcare Database to compare institutional charge-to-cost ratio (CCR) in safety net hospitals vs nonsafety net hospitals for 8 index urologic surgery procedures during the period from 2012 to 2015. The effect of Medicaid expansion on CCR was assessed through difference-in-differences analysis. RESULTS: CCR among safety net hospitals increased from 4.06 to 4.30 following ACA-related Medicaid expansion. This did not significantly differ from the change among nonsafety net hospitals, which was from 4.00 to 4.38 (P = .086). The census division with the highest degree of Medicaid expansion experienced a smaller increase in CCR among safety net hospitals relative to nonsafety net (P < .0001). CCR increased by a greater degree in safety net hospitals compared to nonsafety net in the census division where Medicaid expansion was the least prevalent (P < .0001). CONCLUSION: Safety net hospitals have not preferentially increased CCR in response to ACA-related Medicaid expansion. Census divisions where safety net hospitals did increase CCR more than their nonsafety net counterparts do not correspond to those where Medicaid expansion was most prevalent. This could indicate that, despite being more vulnerable to an increased proportion of more poorly reimbursing Medicaid patients, safety net hospitals have not reacted by increasing charges to private payers.

Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System.

Importance: Administrative costs in the US health care system are an important component of total health care spending, and a substantial proportion of these costs are attributable to billing and insurance-related activities. Objective: To examine and estimate the administrative costs associated with physician billing activities in a large academic health care system with a certified electronic health record system. Design, Setting, and Participants: This study used time-driven activity-based costing. Interviews were conducted with 27 health system administrators and 34 physicians in 2016 and 2017 to construct a process map charting the path of an insurance claim through the revenue cycle management process. These data were used to calculate the cost for each major billing and insurance-related activity and were aggregated to estimate the health system's total cost of processing an insurance claim. Exposures: Estimated time required to perform billing and insurance-related activities, based on interviews with management personnel and physicians. Main Outcomes and Measures: Estimated billing and insurance-related costs for 5 types of patient encounters: primary care visits, discharged emergency department visits, general medicine inpatient stays, ambulatory surgical procedures, and inpatient surgical procedures. Results: Estimated processing time and total costs for billing and insurance-related activities were 13 minutes and $20.49 for a primary care visit, 32 minutes and $61.54 for a discharged emergency department visit, 73 minutes and $124.26 for a general inpatient stay, 75 minutes and $170.40 for an ambulatory surgical procedure, and 100 minutes and $215.10 for an inpatient surgical procedure. Of these totals, time and costs for activities carried out by physicians were estimated at a median of 3 minutes or $6.36 for a primary care visit, 3 minutes or $10.97 for an emergency department visit, 5 minutes or $13.29 for a general inpatient stay, 15 minutes or $51.20 for an ambulatory surgical procedure, and 15 minutes or $51.20 for an inpatient surgical procedure. Of professional revenue, professional billing costs were estimated to represent 14.5% for primary care visits, 25.2% for emergency department visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures. Conclusions and Relevance: In a time-driven activity-based costing study in a large academic health care system with a certified electronic health record system, the estimated costs of billing and insurance-related activities ranged from $20 for a primary care visit to $215 for an inpatient surgical procedure. Knowledge of how specific billing and insurance-related activities contribute to administrative costs may help inform policy solutions to reduce these expenses.