Time-driven Activity-based Costing Analysis in Total Knee Arthroplasty

Abstract

Understanding the costs associated with total knee arthroplasty (TKA) is crucial for optimizing resource allocation and improving healthcare value. This pilot study employs time-driven activity-based costing (TDABC) to assess procedural costs for TKA in both hospital and outpatient surgery center settings. By mapping process steps and recording time spent on each phase, we calculated the associated personnel costs based on salary-derived cost per minute. Data from three TKA cases were analyzed, with a mean procedural time of 167.2 minutes. Personnel costs for attending surgeons, scrub technologists, circulating nurses, advanced practice providers, and anesthesiologists were computed, resulting in an average total indirect cost of $2,751.18 per procedure. Our findings demonstrate TDABC’s effectiveness in providing a granular and accurate assessment of TKA costs compared to traditional accounting methods. As healthcare reimbursement models shift and surgical costs rise, precise cost quantification is increasingly vital. This study highlights cost drivers within TKA procedures, offering insights for cost containment strategies without compromising patient outcomes. Future research should incorporate additional cost variables such as implant prices, facility expenses, and postoperative care to develop a comprehensive financial model for TKA. TDABC has the potential to enhance financial transparency and inform policy decisions in orthopedic surgery.