The research team developed a computational tool that simulates knee replacement surgery's care delivery costs to the healthcare provider. This tool complements the methodology followed in both hospitals to assess clinical and patient-reported outcomes in specific clinical conditions in a VBHC program. This section also describes the learning experience of developing and implementing the digital cost simulator in two Portuguese private hospitals by summarizing the main results of the unstructured focus group in each step.
3.1. Step 1 - Mapping the patient pathway with the main performed activities
In the first focus group, Hospital A multidisciplinary TDABC operational team started by mentioning the difficulty of controlling the costs using the current accounting system as it did not allow for the allocation of costs to the patients that incurred on them, and different hospital departments had different systems. Furthermore, the multidisciplinary TDABC operational team members believed it was important to allocate the incurred costs to each patient. All members of each hospital’s multidisciplinary TDABC operational team participated in the focus group sessions physically held at each hospital.
Hospital A process map (Fig. 1) is an example of the outcome of this step. It was presented and validated by the multidisciplinary TDABC operational team in the third focus group session. It includes all the conducted activities from the patient signalization to surgery to the one-year post-operative appointment. Process mapping allowed the comparison among similar services in both hospitals concerning allocated resources and oriented the implementation of the next steps. The multidisciplinary TDABC operational team, with the graphical representation, recognized the complementarity between the outcomes and cost analysis. Furthermore, they stressed the importance of breaking each activity into smaller operations, as they believe it would be easier to adapt to each patient pathway.
3.2. Step 2 - Identification of the main resources used in each activity and department
The identified resources in Step 1 were allocated to each activity of the patient pathway according to their function. The sheet that resulted from matching the activities with the resources was then used to validate the allocation and add any missing ones in Step 5.
3.3. Step 3 - Estimation of the total cost of each resource group and department
Due to COVID-19, the hospitals had limited time to provide all the required information. Therefore, the research team only collected employee-related costs from the hospital IS (Table 1) and conducted a literature review to collect the remaining ones.
Collected costs for each type of employee contract
Type of contract
Administrative staff, cleaning action assistants, nurses, physiotherapists.
Annual gross salary, including fixed and variable remuneration, holidays, Christmas and meal allowances, and fiscal charges.
Service fee contract
Anesthetist, orthopedic surgeons.
Pre-agreed payment per surgery.
Literature search to obtain an estimation.
When the research team started to assess cost-related information in the patient records and financial system, several incongruities related to the employees' classification collected in Step 2 were found. To accurately collect cost-related data from hospitals' IS, the research team first manually matched the job titles to the employees' category registered in the financial IS. This data categorization issue delayed data collection. The cost estimation model was structured to integrate the cost information directly. Like this, an analyst can simply modify and update the cost-related data.
For equipment and technology resources, the annual depreciation rate was calculated based on the Portuguese legislation (21). The yearly maintenance cost was computed as a percentage of the acquisition value (22). The annual equipment cost was the sum of its yearly depreciation rate and maintenance cost (12, 23). Regarding consumable goods, only their acquisition value was considered (12). To compute space costs, the research team used the hospital group's Annual Report and Accounts to retrieve the following costs: electricity, water, rent, maintenance, repair, building insurance, and cleaning, as suggested in the literature (12). The cost per square meter was computed by dividing the total cost by the hospital's gross square meters. According to official guidelines, the research team assumed the minimum required dimensions for each space (24, 25). All monetary values were collected in Euros as of 2020.
3.4. Step 4 - Estimation of the capacity of each resource and calculate capacity cost rate
The capacity estimation of each employee's category depends on their type of contract: fixed-price, service-fee, or outsourcing (Fig. 2). Regarding fixed-price contracts, we computed the available working days by subtracting weekends, holidays, vacations, personal leave, and days dedicated to research/education from the total number of days per year, 365 days (26). The number of working hours per day was extracted from each employee category's labor contract in the hospital IS. The yearly practical capacity was computed by multiplying the available working days by the available clinical minutes (26). For employees with the service-fee contract, CCR was calculated by dividing their surgery fee by the average surgery duration (9). Lastly, for employees with outsourcing contracts, the practical capacity was computed by multiplying the number of procedures conducted in the hospital by their duration. Equipment and technology and spaces’ CCR was calculated by dividing their annual cost by the minutes of actual use per year (23). The total cost of consumable resources results from multiplying its acquisition value by the number of used units (12).
To minimize the preprocessing of data collected from the hospital IS and optimize the data exchange with the digital cost simulator, the calculus of the CCR was computed on top of a framework that different data sources and departments could feed (financial, HR, logistics, or sales). This framework was designed as a proof-of-concept for middleware software.
3.5. Step 5 - Analyzing the time estimates for each resource used in an activity
The time estimates are based on in situ observation of each operation or time measures provided by the Hospital IS. As already mentioned, the goal of this study is not to accurately obtain time estimates but to design a patient-centered digital cost simulator using realistic values of activities’ duration (Fig. 3). This approach enables the teams to change the activity’s duration to simulate different scenarios.
3.6. Step 6 - Calculation of the total cost of patient care
Two dashboards were designed based on what the multidisciplinary TDABC operationalization team believed to be more useful (Figs. 4 and 5, the dashboard for Hospital A). The first one contains information on the individual patient pathway: number and duration of the activities and operations performed, the total patient pathway time, resources used, the total cost of the used resources, time devoted by resources to the patient pathway, and the most expensive resources. The second one, a general dashboard, contains cost information on all patients, allowing for comparison, analysis of the cost distribution across different activities, and the evolution of costs through the patient pathway. It allows for identifying the patient pathway’s most costly activities.
From the dashboard analysis we can conclude that HR represents most costs before and after surgery (71,6% and 86,1%, respectively). However, during surgery, consumables represent most of the costs (52,1%). Space resources represent the minority of costs for pre, during, and post-surgery (1,1%, 3,2%, and 0,1%, respectively). Knee replacement surgery is the most expensive activity.
This step's operationalization was straightforward because the teams had a clear vision of what outcomes they wanted to assess and how they wanted to visualize them.