PURPOSE 

Surgeons are increasingly faced with the pressures of maintaining the highest quality of patient care, while at the same time maintaining financial viability.

The purpose of this project was to provide a framework for analyzing practice costs for colorectal surgeons using an activity-based cost accounting model.

METHODS 

A survey of 11 practices that were diverse in terms of geography, managed care penetration, academic vs. private practice style, and case distribution was performed.

In activity-based costing the assignment of typical costs such as staff salaries are assigned to the appropriate business process.

The business processes employed in this study were service patients in the office, perform in-office procedures, schedule cases in facilities, service patients in the hospital, insurance authorization, maintain medical records, billing, collections, resolve billing disputes, interaction with third parties, maintain professional education, sustain and manage the practice, maintain the facility, teaching and research, and performing drug studies.

The final step is to assign the cost associated with all appropriate business processes to the appropriate cost object.

The cost objects in this study were defined as a charge office visit, no-charge office visit, charge hospital visit, in-office procedures, in-facility procedures, and performing drug studies.

The data were then analyzed to allow a comparison of four similar practices within the study group. (...)