Cost Analysis of Routine Vitrectomy Surgery

Abstract

Purpose: To use electronic health record (EHR) time logs to calculate the complete cost profiles of routine pars plana vitrectomy surgery.

Design: Economic analysis.

Participants: Patients undergoing elective vitrectomy procedures (Current Procedural Terminology codes 67040, 67041, and 67042) at Vanderbilt University Medical Center in fiscal year 2019.

Methods: Process flow mapping for routine vitrectomy surgery was used to define the operative episode. De-identified time logs were sourced from an internal perioperative data warehouse to calculate procedure-level durations. The costs of materials and overhead were calculated from internal financial management software. Costs per minute for space, equipment, and personnel were based on internal figures. These inputs were used for a time-driven activity-based costing (TDABC) analysis.

Main outcome measures: Complete cost profile of routine pars plana vitrectomy surgery.

Results: Cost analysis of routine vitrectomy surgery resulted in a total cost of $7169.79 per patient, which was $2053.85 more than the maximum Medicare reimbursement for the equivalent episode, $5115.93. Vitrectomy cases do not break even unless the case duration is fewer than 26.81 minutes, overhead is reduced by 53.78%, or reimbursement is increased by 40.15%. Reimbursement does not compensate for variable costs alone for cases lasting longer than 55.09 minutes. In the cohort used here, 68% of cases are completely unprofitable, with increasing losses directly proportional to the length of the case.

Conclusions: This analysis showed that true costs for routine vitrectomy procedures are significantly more than the maximum allowable Medicare reimbursement. Academic ophthalmology departments may benefit from more accurate costing approaches using existing EHR data. These approaches may be informative for policy discussion regarding appropriate reimbursement.