How Montefiore, Owensboro Health used time driven-costing to spur cost reduction opportunities

Time-driven costing allows hospitals and health systems to get a clearer picture of patient and staff costs.This methodology combines organization data on billing activities, employee-level payroll and timestamps pulled from EHR logs to determine costs of patient and staff-level variation. Models that engage the methodology also help hospitals eliminate wasteful spending and pinpoint care processes that add no value.

During an April 13 webinar hosted by Becker's Hospital Review and sponsored by Strata Decision Technology, Jeremy Stewart, decision support manager at Owensboro Health, and Jason Oliveira, decision support service director at Montefiore Health System, discuss how they implemented TDC capabilities at their respective health systems and how the process brought new value to their systems. Leon Corbeille, director of decision support at Strata, moderated the discussion.

Montefiore Health System

The New York City-based health system implemented a Strata decision support system that enabled TDC across its care network in 2018. Montefiore uses TDC to calculate costs across various departments, including perioperative procedures, emergency room visits, anesthesia, labor and delivery and all imaging modalities, according to Mr. Oliveira.

While the health system decided to forego using a relative value unit design to measure costs, it has built several data traps and a monthly monitoring report to validate its clinical process data. By separating revenue department data from three main departments — operation time managed, imaging and emergency departments — Mr. Oliveira and his team can sort through Montefiore's clinical data process to ensure the information produces an accurate cost model.

"This is a data game. It's less about tweaking the cost model; it's really a shift to the front-end data capture and data validation activities," Mr. Oliveira said. "I really don't spend much time anymore on a monthly basis validating the cost by each imaging charge code, each patient or operating room suite. It's much more about making sure the time stamp data makes sense going into the cost model in the first place."

Owensboro Health

Owensboro (Ky.) Health also adopted a decision support model in 2018. Just a few months after partnering with Strata, the health system began pulling data from previously overlooked sources, such as radio frequency identification trackers, to support its cost analysis.

Mr. Stewart and his team collaborated with the health system's IT department to extract the data from the RFID trackers that all Owensboro Health nurses and support physicians had been wearing for years. The health system then repurposed the data to be able to support its TDC model. The information extracted from the RFID trackers allowed Mr. Stewart and his team to generate comprehensive data-driven insights on nurse activity levels and patients' staffing needs.

"We can more closely attribute costs directly to the patients the nurses serve, as opposed to going into a generic nursing bucket that would be allocated proportionally out to all patients that came within that department," Mr. Stewart said. "We're still working through all of it because it is so new, but it is helpful to see the fluctuations of how much time different patients took of our nursing pool."  

Why TDC helps drive success with cost-reduction

The TDC process of combining billing activity from the decision support system with employee pay level data and time stamp information from an EHR or other log systems ultimately helps hospitals capture the most accurate measurement of patient costs.

"Bringing all this information together really helps [us] quantify the cost at a patient level. That is key," Mr. Corbeille said. While RVUs are traditionally calculated more at an activity type level using chart codes or CPTS, the TDC process is what ties both the patient and staff costs together. 

Click here to view the webinar.

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