Measuring the cost of care in benign prostatic hyperplasia using time-driven activity-based costing (TDABC).

BACKGROUND: Determining '"value'" in health care, defined as outcomes per unit cost, depends on accurately measuring cost. We used time-driven activity-based costing (TDABC) to determine the cost of care in men with benign prostatic hyperplasia (BPH) - a common urologic condition.

METHODS: We implemented TDABC across the entire care pathway for BPH including primary and specialist care in both inpatient and outpatient settings. A team of expert stakeholders created detailed process maps, determined space and product costs, and calculated personnel capacity cost rates. A model pathway was derived from practice guidelines and calculated costs were applied.

RESULTS: Although listed as 'optional' in practice guidelines, invasive diagnostic testing can increase costs by 150% compared with the standalone urology clinic visit. Of five different surgical options, a 400% cost discrepancy exists between the most and least expensive treatments.

CONCLUSIONS: TDABC can be used to measure cost across an entire care pathway in a large academic medical center. Sizable cost variation exists between diagnostic and surgical modalities for men with BPH.

IMPLICATIONS: As financial risk is shifted toward providers, understanding the cost of care will be vital. Future work is needed to determine outcome discrepancy between the diagnostic and surgical modalities in BPH.