The application of Time-Driven Activity Based Costing in Total Joint Replacement

In the Value Based Healthcare era, the goal of healthcare delivery is to provide high value to patients. This is what matters to patients and what binds the interests of all system stakeholders; as the healthcare systemʹs economic sustainability improves, patients, payers, and providers will all benefit. According to this viewpoint, the healthcare delivery process has shifted from a quantity‐based to a value‐based efficiency. As a result, there is a growing interest in the efficiency of health‐care processes, which must provide the most value at the lowest feasible cost. The study of health expenditure, as the sum of actual costs incurred by providers for the delivery of healthcare services, has become especially important in order to investigate how actual costs of delivery can be significantly decreased. This definition is also helpful in determining the strategic effectiveness and operational efficiency of hospitals and healthcare providers. Time-Driven Activity Based Costing (TDABC), from this perspective, provides information that offers credible support for improving the operational efficiency and strategic efficacy of the healthcare system. Based on this premise, the broad research question (BRQ) of this dissertation is the following: ʺHow might time-driven activity-based cost accounting systems improve the orthopaedic delivery process?ʺ To answer this general research problem, this work is structured in three sub-research questions (RQ). Infact, an alternative format for writing-up the results of three years’ PhD research is to submit the "three papers model". The three separate, publishable, papers are each free standing (in the sense that each can be read and understood independently) but they are on related themes. The three research questions are listed below: RQ1: What is the existing state of the art in the usage of TDABC in orthopaedic field? RQ2: How can the TDABC be applied in the Italian National Health Service? RQ3: How much do different setups affect the cost parameters of hip and knee replacement? Three different methodologies were used to achieve these goals: a bibliometric analysis of the literature and qualitative review of the forty most cited articles; a pilot study on the application of TDABC in an Italian public hospital; a multicenter experimental case study involving public, private and academic hospitals. Findings from each paper steer the design and writing of the subsequent one. The suitability of TDABC to the orthopaedic field and, in particular, to arthroplasty context revealed by the bibliometric reviews guided the selection of the pilot study on the inpatient cost of hip replacement. Finally, the TDABC was applied to map the delivery process of two orthopaedic procedures in separate hospitals to understand how its implementation could improve the delivery process. The preference for total hip and knee arthroplasty was due to the high frequency and demand for the two surgical procedures. The aim of the study is to understand the elements that most divert the cost of these procedures and to learn how to improve clinical decision-making. Having the mechanism by which to identify true costs at the local level by building a process map of the patient pathway and having a mechanism to reduce costs without negatively impacting outcomes, are necessary steps to reduce healthcare expenditures and improve value globally, while safeguarding or even improving patient outcomes and care.