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  • Cost Analysis of Routine PPV

    By Jean Shaw
    Selected By: Andrew P. Schachat, MD

    Journal Highlights

    Ophthalmology Retina, June 2021

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    Berkowitz et al. set out to calculate the complete cost profiles of routine pars plana vitrectomy (PPV), using electronic health record (EHR) time logs. They found a significant reim­bursement gap between true PPV costs and the maximum allowable Medicare reimbursement.

    For this analysis, the researchers evaluated financial data on 281 patients treated during 2019 at Vanderbilt University. A process flow map—from initial patient arrival and check-in to post-op clinic—was created based on observation of routine vitrectomy cas­es. The time needed to perform a PPV was calculated using de-identified time logs. Internal financial management software was used to gauge the costs of materials and overhead, and costs per minute for space, equipment, and personnel also were based on internal figures. This information was used for a time-driven activity-based analysis.

    The results showed that the total cost for routine PPV surgery at Vander­bilt was $7,169.78 per case—with costs of $1,019.86 for labor, $1,721.80 for materials, and $4,428.12 for space and equipment.

    In contrast, CMS reimbursement was $5,115.93. Overall, the authors found, vitrectomy cases will not break even unless the case takes 26.81 min­utes or less to perform, overhead is reduced by 53.78%, or reimbursement is increased by 40.15%. Moreover, in the cohort used for this study, 68% of cases were unprofitable, with increas­ing losses directly proportional to the length of the case.

    Of note, one key limitation of this study is that it was conducted in a large academic ophthalmology department. Thus, the analysis includes teaching and other academic needs. The authors suggest that future studies should attempt to validate any cost imbalances for PPV surgeries across diverse institu­tions and operating settings.

    The original article can be found here.