COST ACCOUNTING IN RADIATION ONCOLOGY - A COMPUTER-BASED MODEL FOR REIMBURSEMENT

Purpose: The skyrocketing cost of medical care in the United States ha s resulted in multiple efforts in cost containment. The present work o ffers a rational computer-based cost accounting approach to determine the actual use of resources in providing a specific service in a radia tion oncology center. Methods and Materials: A procedure-level cost ac counting system was developed by using recorded information on actual time and effort spent by individual staff members performing various r adiation oncology procedures, and analyzing direct and indirect costs related to staffing (labor), facilities and equipment, supplies, etc. Expenditures were classified as direct or indirect and fixed or variab le. A relative value unit was generated to allocate specific cost fact ors to each procedure. Results: Different costs per procedure were ide ntified according to complexity. Whereas there was no significant diff erence in the treatment time between low-energy (4 and 6 MV) or high-e nergy (18 MV) accelerators, there were significantly higher costs iden tified in the operation of a high-energy linear accelerator, a reflect ion of initial equipment investment, quality assurance and calibration procedures, maintenance costs, service contract, and replacement part s. Utilization of resources was related to the complexity of the proce dures performed and whether the treatments were delivered to inpatient s or outpatients. In analyzing time motion for physicians and other st aff, it was apparent that a greater effort must be made to train the s taff to accurately record all times involved in a given procedure, and it is strongly recommended that each institution perform its own time motion studies to more accurately determine operating costs. Sixty-si x percent of our facility's global costs were for labor, 20% for other operating expenses, 10% for space, and 4% for equipment. Significant differences were noted in the cost allocation for professional or tech nical functions, as tabor, space, and equipment costs are higher in th e latter. External beam treatment-related procedures accounted for mor e than 50% of all technical and professional revenues, simulation for 8% to 10%, and other physics/dosimetry procedures for 11% to 14% of re venues. Some discrepancies were identified between the actual cost and level of reimbursement of various procedures. Details are described i n the manuscript. Conclusion: It is imperative to develop an equitable reimbursement system for radiation oncology services, based on cost a ccounting and other measures that may enhance productivity and reduce the cost per procedure unit, while at the same time preserving the hig hest quality of service provided to patients.