In 2010, MD Anderson introduced time-driven activity-based costing (TDABC) to help measure the true cost of cancer-care delivery. Like most major medical centers, MD Anderson had traditionally used a charge-based costs accounting system, which was not felt to accurately reflect true costs of care.
The multidisciplinary team of clinicians and internal financial staff members worked to pilot TDABC in the Head and Neck Cancer Center, starting with developing a care delivery value chain. A care delivery value chain charts each of the activities involved in a patient’s care for a medical condition.
Next, the team created process maps that included all resources involved for each segment or location of care.1 For example, each process and resource utilized in the outpatient clinic, radiation therapy, and in chemotherapy administration needed to be mapped. This is a very time-consuming process. The team estimated that each segment of the process map took approximately 40 hours to complete and required multiple team members across disciplines.
Baseline Process | January 2009
They then had to estimate how much time it would take to perform each task and the capacity cost of each health care provider. This work was validated at each step by the frontline personnel who actually perform the tasks.
The team then estimated per-patient costs for each process step.
To study how this method would work, the group examined the costs in a preoperative assessment center that had implemented two phases of performance improvement initiatives. Using TDABC principles, they showed an overall reduction in time spent by patient and personnel of 33%, which resulted in a 46% reduction in the costs of providing care in the center. The details of these results are presented below.
After the Phase Two implementation period, process cost, process time, and the number of preoperative assessments were measured and compared to the Phase One and Baseline periods. Both cost and process time decreased after both intervention phases, while the number of preoperative assessments increased. This represents a more efficient process for both patients and providers.
Post Phase II Process | March 2012
