Measuring the Costs of Strabismus Surgery: A Time-Driven Activity-Based Costing Analysis

Abstract

Objective: To determine the costs and cost drivers of strabismus surgery, specifically examining which factors influence the final costs of surgery in relation to their relative reimbursement.

Design: This study was an economic analysis of strabismus surgery at a single academic institution using time-driven activity-based costing (TDABC).

Subjects: Strabismus surgeries, both adult and pediatric, at the University of Michigan during the calendar year 2022 were included for analysis.

Methods: Surgical characteristics, time inputs, and supplies expenses were obtained via the electronic health record. Resource cost rates were obtained via internal financial reporting systems and from prior literature. Day of surgery costs were calculated using TDABC. Multivariate regression was completed to estimate surgical factor impact of surgery time and costs.

Main outcome measures: Main outcome measures included surgery time (in minutes) and day-of-surgery costs.

Results: A total of 690 strabismus surgeries were included, 324 (47%) were pediatric. The average day-of-surgery costs were $4420. There were no significant differences in the TDABC costs between pediatric and adult strabismus surgeries (p = .339) or unilateral versus bilateral surgery (p = .547), though the surgery time was lower for pediatric cases (50.7 minutes vs 56.9 minutes, p < .001). With multivariate regression, individual surgical factors that lowered costs were location at an ambulatory surgery center (-$813) and fellow second surgeon (-$512). Each additional horizontal muscle added $768, vertical muscle $976, and inferior oblique muscle $498. Adjustable suture use added $1023 and reoperations added $823.

Conclusions: TDABC analysis identified the average costs of strabismus surgery and allowed for a cost estimate based on various surgical factors. Moreover, the ability to assess individual surgical cost drivers allows for a comparison to Medicare reimbursement, which highlights multiple areas where Medicare reimbursement does not cover the incremental costs of surgery. With growing concerns over the future of pediatric ophthalmology and adult strabismus surgery, ensuring adequate access to care requires a proper understanding of the economics of strabismus surgery.