Identifying opportunities to improve the efficiency of performing exams is one way for a hospital radiology department to reduce its costs. This is increasingly important as financial risk is shifting from insurers and payers to providers and hospitals in the United States and also for government healthcare systems. The University of Utah School of Medicine in Salt Lake City applied time driven activity based costing (TDABC) to identify ways to improve their process of performing abdominal and pelvic CT exams.
Abdominal and pelvic CT (AP CT) was selected as the first exam process to analyze, because it is one of the most frequently performed radiological examinations for emergency, inpatient, and outpatient use. A multi-divisional hospital team consisting of CT technologists, the CT section manager, the radiology department business manager, financial analysts, representative physicians, and industrial engineers performed the cost analysis, which is described in detail in Academic Radiology.
TDABC maps every step of a process, estimating the time to perform each one. The method uses a “bottom up” approach to measure the human and capital costs for each step. Costs of resources are calculated by determining the cost per unit of each capacity. Radiology department staff calculated capacity cost rates for:
Detailed process maps were created for emergency patient, inpatient and outpatient imaging and for the activities of each individual involved. Separate workflow charts were prepared for both contrast and non-contrast AP CT exams. The process began with the ordering of an exam and ended with the availability of the final radiology report.
Lead author Yoshimi Anzai, MD, professor of radiology and associate chief medical quality officer, and co-authors determined that, on average, 40% of the direct costs to a healthcare institution was for diagnostic interpretation by a radiologist and 40% was for a CT technologist, nurse and other personnel time, 14% was for materials, and the remainder was for space and equipment. However, these costs differed substantially for inpatient, outpatient and emergency patient imaging. As expected, the costs were lowest for outpatient imaging, with emergency department patients costing 13% more and inpatients costing 31% more.
TDABC analysis identified several opportunities to reduce costs. These included:
Commenting that this exercise was labor-intensive, the authors said the more automated the measurement of time and activity could be using a radiology information system or an electronic medical record, the easier it would be to make measurements and routinely monitor changes.
“Understanding the cost of radiology studies to a health care system is critical under new payment models. This technique can be applied to other complex imaging studies to reduce their cost of care,” Dr. Anzai told Applied Radiology.
TDABC cost analysis of common CT exam identifies potential for cost reduction. Appl Radiol.