Endoscopic Versus Open Carpal Tunnel Release: A Detailed Analysis Using Time-Driven Activity-Based Costing at an Academic Medical Center

Purpose In order to effectively improve value in health care delivery, providers must thoroughly understand cost drivers. Time-driven activity- based costing (TDABC) is a novel accounting technique that may allow for precise characterization of procedural costs. The purpose of the present study was to use TDABC to characterize costs in a high-volume, low-complexity ambulatory procedure (endoscopic vs open carpal tunnel release [CTR]), identify cost drivers, and inform opportunities for clinical improvement. Methods The costs of endoscopic and open CTR were calculated in a matched cohort investigation using TDABC. Detailed process maps including time stamps were created accounting for all clinical and administrative activities for both the endoscopic and the open treatment pathways on the day of ambulatory surgery. Personnel cost rates were calculated accounting for capacity, salary, and fringe benefits. Costs for direct consumable supplies were based on purchase price. Total costs were calculated by aggregating individual resource utilization and time data and were compared between the 2 surgical techniques. Results Total procedural cost for the endoscopic CTR was 43.9% greater than the open technique ($2,759.70 vs $1,918.06). This cost difference was primarily driven by the disposable endoscopic blade assembly ($ 217), direct operating room costs related to procedural duration (44.8 vs 40.5 minutes), and physician labor. Conclusions Endoscopic CTR is 44% more expensive than open CTR compared with a TDABC methodology at an academic medical center employing resident trainees. Granular cost data may be particularly valuable when comparing these 2 procedures, given the clinical equipoise of the surgical techniques. The identification of specific cost drivers with TDABC allows for targeted interventions to optimize value delivery. Copyright (C) 2019 by the American Society for Surgery of the Hand. All rights reserved.