Is Anterior Cervical Discectomy and Fusion More Expensive at Quaternary Care Centers? An Application of Time-Driven Activity-Based Costing.

OBJECTIVE

Hospital setting is postulated to be a key driver of cost variation for neurosurgical procedures. Limitations in contemporary costing methodologies have led to the development of time-driven activity-based costing (TDABC). This study applies TDABC to anterior cervical discectomy and fusion (ACDF) to compare intraoperative costs at quaternary care centers versus satellite hospitals affiliated with the same health network.

METHODS

Nine hundred and fifty-eight ACDF cases performed at two quaternary care hospitals (n = 806) and six satellite hospitals (n = 152) were reviewed. Process maps were created to map the intraoperative episode, and TDABC methodology was used to calculate true surgical costs, including supply (e.g., implants, consumables) and personnel costs (e.g., per minute wages of all personnel types involved in care delivery). Software was developed to automate the extraction of this information from the electronic medical record. Multivariable logistic and linear regression models assessed predictors of high cost surgeries and the influence of hospital setting on total costs, adjusting for confounders.

RESULTS

Quaternary hospitals had significantly lower total intraoperative costs compared to satellite hospitals ($6,773 ± $2,664 vs. $8,862 ± $3,690, P < 0.001), with supply costs driving the difference. Among all hospital sites, supply cost, and personnel cost comprised most of the total cost. Satellite hospitals also had a 6.55-fold higher likelihood of performing high-cost surgeries (P < 0.001).

CONCLUSIONS

ACDFs were less expensive at quaternary care centers than at satellite hospitals, challenging assumptions about lower costs in satellite or community settings. Methodologies such as ours may establish a foundation for identifying which surgeries are most amenable to community-based care.