Measuring the cost of care in benign prostatic hyperplasia using time-driven activity-based costing (TDABC)

BackgroundDetermining ‘”value’” in health care, defined as outcomes per unit cost, depends on accurately measuring cost. We used time-driven activity-based costing (TDABC) to determine the cost of care in men with benign prostatic hyperplasia (BPH) – a common urologic condition.MethodsWe implemented TDABC across the entire care pathway for BPH including primary and specialist care in both inpatient and outpatient settings. A team of expert stakeholders created detailed process maps, determined space and product costs, and calculated personnel capacity cost rates. A model pathway was derived from practice guidelines and calculated costs were applied.ResultsAlthough listed as ‘optional’ in practice guidelines, invasive diagnostic testing can increase costs by 150% compared with the standalone urology clinic visit. Of five different surgical options, a 400% cost discrepancy exists between the most and least expensive treatments.ConclusionsTDABC can be used to measure cost across an entire care pathway in a large academic medical center. Sizable cost variation exists between diagnostic and surgical modalities for men with BPH.ImplicationsAs financial risk is shifted toward providers, understanding the cost of care will be vital. Future work is needed to determine outcome discrepancy between the diagnostic and surgical modalities in BPH.