Drivers of Labor and Supply Cost Variation in Anterior Cruciate Ligament Reconstruction: A Multicenter Time-Driven Activity-Based Costing Analysis.

backgroundUnderstanding drivers of supply and labor cost variation in orthopaedic surgery is crucial to provide value-based care. Time-driven activity-based costing (TDABC) is a more accurate methodology for capturing costs of care than traditional methods. Anterior cruciate ligament reconstruction (ACLR) is one of the most performed outpatient procedures within orthopaedic surgery. The purpose of this study was to characterize the cost composition of ACLR and identify factors that drive cost variation.

methodsCost data for supplies and time-based personnel usage were extracted from electronic health records and were used to calculate costs using TDABC. TDABC methodology was applied to calculate the cost of personnel usage by multiplying the duration and associated cost per minute. Descriptive statistics and mixed-effects modeling were used to determine cost drivers.

resultsThis study included 861 patients who underwent ACLR at 8 hospitals. The mean patient age (and standard deviation) was 31.1 ± 11.6 years. Of the 861 patients, 350 were male and 511 were female; 85.6% of patients were White, 8.1% were Asian, and 3.4% were Black. There was 3.2-fold variation in supply costs ($2,950) and 1.6-fold variation in labor costs ($940) between the 10th and 90th percentiles. Overall, supply costs accounted for 58.2% of total costs, whereas labor costs comprised the remaining 41.8%. The intraoperative phase was the greatest generator of total cost (89.7%). After adjusting for surgeon and hospital variability, variation in total cost was most effectively explained by graft type, primary surgery status, and meniscal repair (conditional R 2 = 0.84; marginal R 2 = 0.27). On subanalysis, patients undergoing allograft ACLR had significantly higher total costs, implant costs, and age compared with those undergoing ACLR with any autograft type (all p < 0.01).

conclusionsThe most notable drivers of labor and supply cost variation were graft type, surgeon, surgery center, primary surgery status, and concomitant meniscal repair. Understanding modifiable cost drivers may aid health systems in designing value-based pathways, implant formularies, and surgeon education programs. Future studies may integrate cost with outcome measures for a more holistic view of value. LEVEL OF EVIDENCE: Economic and Decision Analysis Level III . See Instructions for Authors for a complete description of levels of evidence.