Measuring the value of process improvement initiatives in a preoperative assessment center using time-driven activity-based costing

BackgroundThe value and impact of process improvement initiatives are difficult to quantify. We describe the use of time-driven activity-based costing (TDABC) in a clinical setting to quantify the value of process improvements in terms of cost, time and personnel resources.ProblemDifficulty in identifying and measuring the cost savings of process improvement initiatives in a Preoperative Assessment Center (PAC).GoalsUse TDABC to measure the value of process improvement initiatives that reduce the costs of performing a preoperative assessment while maintaining the quality of the assessment.StrategyApply the principles of TDABC in a PAC to measure the value, from baseline, of two phases of performance improvement initiatives and determine the impact of each implementation in terms of cost, time and efficiency.ResultsThrough two rounds of performance improvements, we quantified an overall reduction in time spent by patient and personnel of 33% that resulted in a 46% reduction in the costs of providing care in the center. The performance improvements resulted in a 17% decrease in the total number of full time equivalents (FTE's) needed to staff the center and a 19% increase in the numbers of patients assessed in the center. Quality of care, as assessed by the rate of cancellations on the day of surgery, was not adversely impacted by the process improvements.Implication
• TDABC can be applied in a health care setting.
• TDABC allows for quantification of value in process improvements.
• TDABC allows one to evaluate the value of identified process improvements.