To improve value, we must also capture the actual costs of providing care. This is challenging since true costs of health care delivery are often not accurately defined nor measured and are often replaced by inadequate proxies, such as “charge” or “price.”
Determining actual costs requires dedication to developing and implementing a standard method for quantifying inputs and understanding care processes. In Module 3, we reviewed Time-Driven Activity-Based Costing (TDABC) as a value-driven cost accounting methodology.
A system designed to deliver value for patients integrates costs across a full cycle of care. A patient admitted to an acute care hospital with pneumonia who is discharged to a skilled nursing facility for further rehabilitation prior to being discharged home will appropriately view this entire sequence as a single episode. The cost of this entire event should be captured to inform the value of care delivered. If costs continue to be siloed, then the hospital may simply shift costs to the post-acute care setting (the skilled nursing facility or to the primary care physician) without truly improving value. In fact, this could lead to worsened outcomes and costs for patients.
The importance and benefits of measuring and analyzing actual costs to improve value are similar to those of outcome measurement:
Understanding the actual costs of health care delivery can be burdensome both for clinicians and patients.
Read this brief JAMA research letter, “Finding Health Care Prices Online––How Difficult is it to be an Informed Healthcare Consumer?”
Source: Krtka A, Wong CA, Hermann R, et al. JAMA Internal Medicine. 2017. Used with permission.
