Patients undergoing elective vitrectomy procedures (CPT 67040, 67041, 67042) at Vanderbilt University Medical Center in fiscal year 2019.
Process flow mapping for routine vitrectomy surgery was used to define the operative episode. De-identified time logs were sourced from an internal perioperative data warehouse to calculate procedure level durations. The cost of materials and overhead were calculated from internal financial management software. Cost per minute for space, equipment, and personnel were based on internal figures. These inputs were used for a Time-Driven Activity Based Costing (TDABC) analysis.
Cost analysis of routine vitrectomy surgery resulted in a total cost of $7,169.79 per patient, which was $2,053.85 more than the maximum Medicare reimbursement for the equivalent episode, $5,115.93. Vitrectomy cases do not reach breakeven unless the case duration is less than 26.81 minutes, overhead is reduced by 53.78%, or reimbursement is increased by 40.15%. Reimbursement does not compensate for variable costs alone for cases longer than 55.09 minutes. In the cohort used here 68% of cases are completely unprofitable with increasing losses directly proportional to the length of the case.
The analysis here shows that true costs for routine vitrectomy procedures are significantly more than the maximum allowable Medicare reimbursement. Academic ophthalmology departments may benefit from more accurate costing approaches, using existing data in the EHR. These approaches may be informative for policy discussion regarding appropriate reimbursement.