Calculation of Costs based on Time-driven Activities (TDABC) during Hospital Nutritional Care in High-cost Pathologies such as Stomach, Colon and Rectal Cancer with Malnutrition
Keywords: Analysis; Cost; Health care costs; Hospitalization; Clinical oncology; Malnutrition
to be established.
profit as part of comprehensive care.
Malnutrition in hospitalized patients is a problem that requires attention in the health sector in order to improve outcomes, requiring research and evaluation of the costs and large-scale effectiveness of the use of therapeutic interventions, especially in cases of malnutrition [1,2].
Malnutrition requires adequate and timely nutritional intervención, as it is connected to a wide range of functional alterations, medical complications and mental health problems, as well as increased risk of health complications such as pressure ulcers, surgical site infections, urinary tract infections, adverse impact on mental health, depression and reduced quality of life [3].
Therefore, an optimal nutritional care process with costs that contribute to the sustainability of hospitals, contributes to reduce the complications associated with states of malnutrition in oncological pathologies, such as infections, increased hospital stay and costs of care.
One of the main tools to carry out the administrative and managerial management for the decision making related to the products or services of a hospital institution, as far as its costs, profit margins, volumes, analysis of tariffs (prices), is to implement a costing system. An example is the case of the methodology of the Activity Based Costing (ABC) system, which has taken on a great deal of importance in recent times, and which since the 1980s has been known in the United States as an administrative and managerial tool that made it possible to solve many of the problems presented with traditional cost methodologies, mainly the distribution of indirect costs, which suggested having a much more effective mechanism for their distribution [4,5].
However, since any methodology has certain limitations for its implementation, such as the collection of statistical information and information provided by employees, and issues of organizational culture, the methodology defined as Time Driven Activity Based Costing (TDABC) emerged, which is proposed as an alternative to facilitate the incorporation of data in a costing system, using formulas that allow to easily establish the time that people dedicate to the activities and taking into account the number of activities they carry out, for which equations are configured associated to the information available in the information systems of the institution, which facilitate its continuity and analysis.
This methodology was presented by Robert Kaplan and Steven Anderson in 2003, they published the book in which an alternative is proposed to facilitate the distribution of costs using the practical capacity and not the theoretical capacity of the ABC, using formulas that allow to establish easily the time that people dedicate to the activities and taking into account the number of activities that they carry out, for which equations associated to the available information are configured [6].
This new model, according to its authors, is proposed as a tool that is much simpler, cheaper and more far-reaching than the ABC methodology, with a greater vision of costs, since it helps to determine unused capacity to allocate more activities to employees with underused time, and to increase the productivity of care services, as a contribution to the present study object of a nutrition service, which could become a reference for the other services of hospital institutions.
The TDABC model includes the costs of providing capacity and the time needed to carry out an activity, making it possible to determine unused capacity in care processes, considering practical capacity [7], and is a useful tool for health service delivery institutions [8].
The objective pursued in the present study was to know the real cost of hospital nutritional care process in high cost pathologies such as stomach, colon and rectal cancer, applying the methodology of cost based on time invested per activity (TDABC).
The steps for carrying out the partial economic assessment using the TDABC methodology in this research were as follows:
• Preparation of the model, included the description of direct costs of care of patients over 18 years, with diagnosis of stomach, colon and rectal cancer attended in 2015.
• The research question was as follows: What is the estimated total cost of the inpatient nutritional care process in stomach, colon, and rectal cancer?
• The population included 471 patients, which corresponds to the total number of patients treated by the nutrition team with a diagnosis of stomach, colon and rectal cancer in the HSPI during the months of January to December 2015. The CIE-10 codes that were the subject of this study were as follows:
C161 Malignant tumour of the gastric fundus C165 Malignant tumour of the minor curvature of the stomach, no other specification C166 Malignant tumour of the major curvature of the stomach, no other specification C 169 Malignant tumour of the stomach, unspecified part D002 Carcinoma in situ of the stomach D131 Benign tumour of the stomach D371 Tumour of uncertain or unknown behaviour of the stomach C162 Malignant tumour of the body of the stomach
C184 Transverse colon malignant tumour C186 Malignant tumour of the descending colon C187 Sigmoid colon malignant tumor C189 Malignant tumour of the colon, unspecified part D010 Carcinoma in situ of the colon D122 Benign tumour of the ascending colon D123 Benign tumour of the transverse colon D124 Benign tumour of the descending colon D125 Benign sigmoid colon tumor D126 Benign tumour of the colon, unspecified part D374 Tumour of uncertain or unknown behaviour of the colon
C20X Malignant tumour of the rectum C785 Secondary malignant tumour of the large intestine and rectum D011 Carcinoma in situ of the rectosigmoid junction D011 Carcinoma in situ of the rectum D127 Benign tumour of the rectosigmoid junction D128 Benign tumor of the rectum D375 Tumour of uncertain or unknown behaviour of the rectum
The implementation of the model, for the present study, included the review of the clinical histories of patients with stomach, colon and rectal cancer, and the respective invoices generated during the process of attention to the insurer, in order to classify costs from a descriptive point of view, based on production volume. For this, the costs directly related to the nutritional care of the disease that generated the hospitalization were collected, including 6 steps [6,9,10]:
1. Estimation of the practical capacity of the activities and resources of the nutrition process. Descriptive statistical analyses were carried out (univariate and bivariate analyses), with the respective measures of central tendency and dispersion, to subsequently generate a research report that included the calculation of practical capacity, the unit cost of the activities of the nutritional care process, and the state of results.
2. Calculation of the cost per unit of time it took the nutrition process to provide services in hospital care.
3. Computation of the approximate time of execution for each of the activities, by means of work of direct observation of the workers to establish the times and movements.
4. Obtaining the costs of the activities, and calculating the coefficient of costs by capacity.
5. Calculation of the cost of production.
6. Calculation of the profitability of the nutritional care process.
This research included methods of Exploratory Analysis or Descriptive Statistics, with the objective of understanding the structure of the data.
The data was processed in the Software for Statistics and Data Science: Stata 15.
Next, the results are described according to the characterization of the target population, to later describe the results of the total cost of the process of hospital care using the ADHD method, in this case, a university hospital of high level of complexity of private character in Latin America, during the year 2015.
The population is made up of 471 patients with diagnoses of stomach, colon and rectal cancer, whose distribution by gender is 52% male and 48% female. As can be seen in Table 1, 53.5% of patients were in the 60 to 80 year range, and the proportion of young patients under 30 years of age was relatively low (1.5%).
The combination of several different types of cancer using ICD-10 codes was done taking into account the hospital’s own cost structure and codification. Within the clinical diagnosis, a greater proportion of patients with stomach cancer was observed: 39.5 %, followed by colon cancer 37.98 %, and rectal cancer 23.79 %. In stomach cancer the most prevalent is the malignant tumour of the stomach, an unspecified part with 19.32%, being the male population the most affected. In colon cancer, the proportion of patients with the highest proportion of involvement was the malignant tumor of the colon, an unspecified portion of which was 9.34%, and in rectal cancer, the
most frequent diagnosis was malignant tumor of the rectum with 14.65% (Table 2).
After characterization of the population, in order to establish the total cost of the hospital care process, it was necessary to calculate the practical capacity in minutes. The practical capacity of the person who carries out the activities described in table 3, and who, for the sake of implementing the ADHD model, established the operations described and carried out by a team made up of 23 workers hired with a daily working day of 6 hours, so that their theoretical annual capacity amounted to 2,664,900 minutes.
By reviewing the variable costs, the total cost of the nutritional care process was established, calculating a capacity cost per minute coefficient of $539 (Table 4).
On the other hand, a calculation was made of the cost per unit of time it takes to carry out the activities that can be invoiced for the nutritional care process, with a used capacity of 1%. The above taking into account findings such as failures in billable activities such as interconsultations, and which were reported to the central billing of the institution. It is important to clarify that the total unused capacity, equivalent to 99%, refers to non-billable care support activities, included in the hospitalization and that tend towards a better quality of service (Table 5).
With respect to the time-invested costs per activity (TDABC) system, this research allowed for the breakdown of costs per hospital care unit, which yields a net profit of 3.7% for the organization (Table 6).
Cancer patients usually suffer from associated malnutrition resulting from local tumor effects, host response to tumor therapies, and contributing factors such as decreased food intake and alterations in nutrient metabolism that can lead to impairment of immune functions, functional status, muscle function, and quality of life; requiring intervention by an in-hospital nutritional support team, which can help improve prognosis, and reduce the consequences of deterioration of cancer-associated nutritional status [11], In the comprehensive care of cancer patients, interventions related to prevention and treatment can generate improvements in quality of life and survival, although they imply an increase in care costs, affecting payment policies, the global economy and the incentive structures of oncological care [12-14].
It is imperative to carry out studies of the national costs of patient treatment, given the implications for decision-makers in planning and allocating resources for care, both at the health system and system levels, and in hospitals [15].
Carcinoma in situ of the colon 1 3 4 0,85 Carcinoma in situ of the stomach 5 2 7 1,49 Carcinoma in situ of the rectum 4 4 0,85 Injury to contiguous sites of the 1 10 11 2,34 anus, anal canal Injury to contiguous sites of the 1 1 2 0,42 colon Tumor of uncertain or unknown 17 15 32 7,00 behavior of the colon Tumor of uncertain or unknown 21 14 35 7,43 behavior of the stomach Uncertain or Unknown Behavioral 5 6 11 2,34 Tumor of the Rectum Malignant tumor of the major 1 1 2 0,42 curvature of the stomach Malignant tumor of the minor 2 2 0,42 curvature of the stomach Malignant tumor of the 4 4 8 1,70 rectosigmoid junction Malignant tumor of the pyloric 3 3 0,64 antrum Malignant Tumor of the Blind 8 10 18 3,82 Malignant tumour of the ascending 18 11 29 6,16 colon Descending Colon Malignant Tumor 5 3 8 1,70 Sigmoid Colon Malignant Tumor 20 14 34 7,22 Transverse Colon Malignant Tumor 1 5 6 1,27 Malignant tumor of the colon, 24 20 44 9,34 unspecified part Malignant tumour of the body of 2 10 12 2,55 the stomach Malignant tumour of the duodenum 3 1 4 0,85 Malignant tumour of the stomach, 39 52 91 19,32 unspecified part Malignant tumour of the gastric 6 18 24 5,10 fundus Malignant pylorus tumor 1 2 3 0,64 Malignant tumor of the rectum 37 32 69 14,65 Secondary malignant tumor of the 2 2 4 0,85 large intestine and rectum
Source: Own elaboration.
Table 4: Cost of the process.
Direct fixed cost $693.181.849 Minute value $ 260 Indirect costs $743.864.076 Minute value $ 279 Total Fixed Direct $1.437.045.925 Minute value $ 539 Source: Own elaboration.
In Colombia, hospitals are classified by level of care, from level I to level IV, the latter being the most complex hospital, understood from the point of view of the activities, interventions and procedures carried out. Hospitals treat patients from different insurers in the country who require specialized care.
Taking into account the above, this study presents a costing methodology that can be replicated in the nutrition processes of hospitals in the region, in order to generate data to compare and establish strategies between institutions to include activities to improve hospital nutritional care processes in the country.
The results of this phase of research, which included a population of 471 patients with diagnoses of stomach, colon and rectal cancer, whose gender distribution was 52% men and 48% women, hospitalized in an Health Services Provider Institution (HSPI) of high level of complexity. It is important to emphasize that the clinical diagnosis identified with the highest proportion of patients was stomach cancer 39.5%, which according to Colombia is an increasing public health problem, representing great social and economic repercussions imposing a challenge to the health system [16].
Within the framework of economic evaluations of health interventions, it is necessary to estimate the costs of such health care in order to determine the value of health care, defined from the perspective of unit costs based on activity by time (TDABC) to determine the cost of care. Although nutritional intervention appears as a recommendation in major clinical practice guidelines [17,18], nutritional interventions can increase costs of care, sometimes shifting financial risk to insurers, and understanding the costs of care is relevant.
The costing process involved estimating the capacity of each resource, and calculating the capacity cost rate, determining the practical capacity for the 23 employees required for care and intervention in nutritional support, hired with a daily workday of 6 hours, with a theoretical annual capacity of 2,664,900, with a capacity per minute cost coefficient of $539.
With respect to the system of costs based on time invested per activity (TDABC), the present investigation allowed the breakdown of costs per hospital unit of attention, allowing to establish a net profit of 3.7%. The literature on revenue management through actual Table 5: Cost and percentage of participation in activities.
Activity Attention time Unit cost Services Daily Care and Handling 18 $9.706 1038 First time consultation for nutrition 36 $19.413 173 and dietetics Nasogastric tube passage first time x 24 $12.942 42 head nurse Determination of oral nutritional 2,4 $1.294 98 regime Nutritional Screening 12 $6.471 133 Total capacity used Total unused capacity Total capacity Value 1 Euro = $ COL 3.437 Source: Own elaboration
operating decisions, using methodologies to establish net profit, refers to values below 2.9% [19,20].
With precision the costs and results of this measurement, it constitutes a leverage for the transformation of concepts into health care economics and nutrition. To the extent that managers of health organizations and leaders of nutrition processes obtain accurate measurements of the costs of their services, favoring politically difficult decisions at lower costs while improving clinical outcomes [21,22].
The TDABC analysis became an information platform that demonstrated how a nutritional intervention model is an innovation in the care process, favoring the control of costs and opportunities for improvement, actively involving physicians, clinical teams and administrative staff in charge of the care cycle, allowing evidence that this nutritional intervention closes the gap between comprehensive health care and the reduction of care costs including innovative technologies, such as nutritional support to promote positive outcomes.
This research is the first time that the TDABC methodology is Cost Total time Participation Total 18.684 $10.075.337 0,67% 6.228 $3.358.446 0,22% 1.008 $543.563 0,04% 235 $126.501 0,01% 1.596 $860.642 0,06% 26.155 $14.964.489 1,00% 2.638.745 $1.422.942.077 99,00% 2.664.900 $1.437.906.566 100,00% HCPI Total Nutrition and % 2 Dietetics 6.331.749.195 7.503.449.705 100% 5.700.346.965 6.601.504.037 88,0% 631.402.231 901.945.668 12,0% 742.426.282 756.536.911 10,1% 111.024.051 145.408.756 1,9% 124.806.671 133.817.697 1,8% 1.437.794 1.440.428 0,0% 12.344.826 277.786.025 3,7% applied to a hospital nutrition process, carried out in Colombia, in the patient with stomach, colon and rectal cancer, generating a positive net utility.
The present research was developed within the framework of the doctoral thesis “Management of Hospital Nutritional Care”, of the doctoral program in Sciences of the Management of Universidad del Rosario - Colombia.
The authors declare that there is no conflict of interest that could be perceived as prejudicing the impartiality of the research reported.