Assessing the True Cost of Minimally Invasive TLIF in Patients with Workers' Compensation using Tdabc

Presented at SMISS Annual Forum 2018
By Daniel Bu

Disclosures: Daniel Bu None


As the percent growth in workers’ compensation medical costs outpaces growth in US health expenditures, new policies now decrease the number of cases approved, thus burdening low-wage, vulnerable workers who are disproportionately covered by it. Since the majority of workers’ medical compensation is underwritten for back injuries, our study uses time-driven activity-based costing (TDABC) to determine the cost drivers of transforaminal lumbar interbody fusions (TLIF) over the total cycle of care.


This study aims to determine the true cost of an MIS-TLIF for workers' compensation patients across the full cycle of care. It also identifies cost-drivers, and assess whether reductions can meaningfully decrease cost or increase value in the episode of the care.


For our time-driven activity-based costing model, we defined a full care cycle as initial patient visit through the post-operative 6-month follow-up. Time-capture data was acquired for 14 separate iterations of the cycle by directly following patients through each step of the cycle. These data were combined with the average utilization rates and time stamps extracted from the EMRs of 160 consecutive patients broken down into 17 unique process maps for 150 total points. Each point was then assigned cost per unit time as a function of 4 factors-personnel, space, durable equipment, consumables. These capacity cost rates were combined with time data to generate total cost data.


Of the total TDABC derived cost (>$25,590), implants were the greatest cost overall (28%). The most expensive individual step over the course of the total care cycle was the surgical procedure (70%). In terms of individual capacity cost rates, personnel costs were a major cost-driver (22%), along with non-implant operative supplies (22%), of which drugs and biologics accounted for 43%. Of the different simulated process map improvements, we were able to decrease costs by 6% total (from $313 through peak utilization smoothing to $1160 by elimination of unnecessary practice variation through use of implants).


TDABC allows us to determine both the true cost of a TLIF and the cost-drivers across the care-delivery value-chain. This cost model also revealed bottle necks within the care cycle, and specific places where resources were underutilized. However, this model found that the largest costs in transforaminal lumbar interbody fusions were from consumables such as implant and biologics, neither of which responds directly to pressures from the decrease in approvals for workers’ compensation spine cases, thus shifting costs to the workers themselves.