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Increasing Value in Plagiocephaly Care: A Time-Driven Activity-Based Costing Pilot Study

Inverso, Gino BA*†; Lappi, Michael D. DO, PhD‡§; Flath-Sporn, Susan J. MPH*; Heald, Ronald MBA*‡; Kim, David C. MD*; Meara, John G. MD, DMD, MBA*‡

doi: 10.1097/SAP.0000000000000002
Head and Neck Surgery
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Background Process management within a health care setting is poorly understood and often leads to an incomplete understanding of the true costs of patient care. Using time-driven activity-based costing methods, we evaluated the high-volume, low-complexity diagnosis of plagiocephaly to increase value within our clinic.

Methods A total of 59 plagiocephaly patients were evaluated in phase 1 (n = 31) and phase 2 (n = 28) of this study. During phase 1, a process map was created, encompassing each of the 5 clinicians and administrative personnel delivering 23 unique activities. After analysis of the phase 1 process maps, average times as well as costs of these activities were evaluated for potential modifications in workflow. These modifications were implemented in phase 2 to determine overall impact on visit-time and costs of care.

Results Improvements in patient education, workflow coordination, and examination room allocation were implemented during phase 2, resulting in a reduced patient visit-time of 13:25 (19.9% improvement) and an increased cost of $8.22 per patient (7.7% increase) due to changes in physician process times. However, this increased cost was directly offset by the availability of 2 additional appointments per day, potentially generating $7904 of additional annual revenue. Quantifying the impact of a 19.9% reduction in patient visit-time at an increased cost of 7.7% resulted in an increased value ratio of 1.113.

Conclusions This pilot study effectively demonstrates the novel use of time-driven activity-based costing in combination with the value equation as a metric for continuous process improvement programs within the health care setting.

From the *Department of Plastic and Oral Surgery, Boston Children’s Hospital; †Harvard School of Dental Medicine; and ‡Harvard Medical School; and §Harvard School of Public Health, Boston, MA.

Received May 29, 2013, and accepted for publication, after revision, September 10, 2013.

Conflicts of interest and sources of funding: none declared.

Reprints: John G. Meara, MD, DMD, MBA, Department of Plastic and Oral Surgery, Boston Children’s Hospital, 300 Longwood Ave, Enders 114, Boston, MA 02115. E-mail: John.meara@childrens.harvard.edu.

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