ReCAP: Time-Driven Activity-Based Costing: A Comparative Cost Analysis of Whole-Breast Radiotherapy Versus Balloon-Based Brachytherapy in the Management of Early-Stage Breast Cancer [Business of Oncology]

QUESTION ASKED:

This study aimed to address the question of which modality for adjuvant breast radiotherapy costs more: whole breast radiotherapy (WBRT) or accelerated partial breast irradiation (APBI) with balloon-based brachytherapy. Using time-driven activity-based costing (TDABC), we were able to evaluate the fundamental cost based on resources consumed rather than charges billed to the payer.

SUMMARY ANSWER:

Our study found APBI to cost 30% more than WBRT. This difference is primarily driven by discrepancies in the cost of both materials and personnel, and in particular, the degree of involvement by the attending physician.

METHODS:

For WBRT (25 fractions with 5-fraction boost) and APBI (10 fractions twice daily), process maps were created outlining each activity from consultation to post-treatment follow up (Figure 1). Through staff interviews, time estimates were obtained for each activity. The capacity cost rate (CCR), defined as cost per minute, was calculated for personnel, equipment, and physical space. Total cost was calculated by multiplying the time required of each resource by its CCR. This was then summed and combined with the cost of consumable materials.

MAIN RESULTS:

The total cost for WBRT was $5,333 and comprised 56% personnel costs and 44% space/equipment costs. For APBI, the total cost was $6,941 (30% higher than WBRT) and comprised 51% personnel costs, 6% space/equipment costs, and 43% consumable materials costs. The attending physician had the highest CCR of all personnel ($4.28/min), and APBI required 24% more attending time than WBRT. The most expensive activity for APBI was balloon placement and for WBRT it was CT simulation.

BIAS, CONFOUNDING FACTOR(S), DRAWBACKS:

This study used data based on our local costs and institutional procedures. Generalizability outside of our department is therefore limited. In addition, our analysis accounted for departmental overhead, but did not measure hospital-wide overhead, such as information technology, marketing, lobby space, and hospital administration. Lastly, our time estimates came from interviews as opposed to direct measurements from patient encounters. This was done to prevent potential outliers from impacting our findings.

REAL-LIFE IMPLICATIONS:

The United States spends far more on health care than any other nation, and one of the key driving factors in this is a reimbursement system that rewards volume. As a departure from this, Michael Porter has advocated for a system based on value, defined as health outcomes achieved per dollar spent. To incentivize value, reimbursement must transition to bundled payments for the comprehensive management of a medical condition. In addition, transparent outcome reporting would hold physicians accountable for the quality of care. To formulate bundled payments, it is essential to have a thorough understanding of cost. TDABC is a bottom-up costing method with granular calculations based on personnel, space, equipment, and material resources consumed. This is in contrast to other costing methods which are primarily founded on charges billed to the payer. Ours is the first study to apply TDABC to breast radiotherapy, and has provided insight regarding what drives the higher cost for APBI compared with WBRT. More importantly, we hope it will lead to further research aimed at lowering health care costs and defining bundled payments.

FIG 1.

Process map for breast brachytherapy initial consultation. Each box denotes one activity, with personnel coded by color and the time (minutes) required for each activity denoted in the bottom-right corner.

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