Physician resource utilization in radiation oncology : A model based on management of carcinoma of the prostate

Abstract Purpose: To develop a methodology to estimate the comparative cost of physician time in treating patients with localized prostate cancer, using as an example two-dimensional (2D) vs. three-dimensional (3D) conformal irradiation techniques, and to illustrate how current cost-accounting techniques can be used to quantify the cost of physician time and effort of any treatment. Methods and Materials: Activity-based costing, a recent innovation in accounting, widely recommended for estimating and managing the costs of specific activities, was used to derive physician resource utilization costs (actual cost of the physician services and related support services consumed). Results: Patients treated with 3D conformal irradiation consume about 50% more physician time thanpatients receiving 2D conventional radiation therapy. The average professional reimbursement for 3D conformal irradiation is only about 26% more than for the 2D treatment. Substantial variations in cost are found depending on the total available physician working hours. In an academic institution, a physician working 40 hours a week would have to spend an average of about 60% of available time on clinical services to break even on a 2D treatment process and over 74% of available time on clinical work to break even on a 3D treatment process. The same physician working 50 hours a week would have to spend an average of about 48% of available time on 2D clinical sevices and about 60% of available time on 3D clinical work to break even. Current Medicare reimbursement for 3D treatment fall short of actual costs, even if physician work 100% of a 50-hour week. Medicare reimbursement for 2D barely allows the department to break even for 2D treatments. Conclusions: Costs based on estimates of resource use can be substantially under- or overestimated. A consistent language (method) is needed to obtain and describe the costs of radiation therapy. The methodology described here can help practitioners and researchers more accurately interpret actual cost information. Future use of such cost-estimation methodologies could provide consistent and comparable costs for negotiations with health care providers and help assess different treatment strategies.