241 A Step Towards Total Episode Costs: An Activity-Based Costing Analysis For Cervical Spine Surgery

INTRODUCTION: Time-driven activity-based costing (TDABC) is the most accurate way to determine the cost of providing a healthcare service. With the advent of bundled payment models, it is important to understand exactly how much it costs to deliver an episode of care. METHODS: In a single-center retrospective study at a large tertiary academic institution, TDABC was employed to measure pre- and post-operative personnel costs (including providers, nursing, therapy, and administrative staff) and total intra-operative costs, in US dollars, of the care episodes of 63 patients who underwent elective spine surgery for cervical myelopathy. Cost patterns among different surgical approaches (anterior, posterior, anterior/posterior) were analyzed using a one-way analysis of variance. RESULTS: We were able to use TDABC to accurately measure the costs of each episode of care in a patient undergoing cervical spine surgery. There was no significant difference between total pre-operative costs between any of the approaches. There was a stepwise increase in cost with an increase in the invasiveness of the procedure in both the operative and post-operative episodes, with the total cost of anterior surgery being less expensive than posterior surgery (mean difference -$10,434.99; 95% CI = -$14,200.11:-$6,778.78, p < 0.001), which was less expensive than a combined anterior/posterior approach (mean difference -$6,613.39; 95% CI = -$12,788.71:-$438.06; p < 0.05). CONCLUSIONS: We demonstrate that TDABC can accurately measure exact costs of an episode of care while providing insight into granular cost differences when treating a specific pathology. Anterior approaches were significantly cheaper compared to posterior or anterior/posterior approaches in terms of total cost and personnel. We also lay out a framework for how this methodology can be utilized throughout the 90-day follow up period.