Abstract
Purpose :
Intravitreal injections (IVI) are one of the most common procedures performed by ophthalmologists today, but the actual cost of performing IVIs is not fully understood. An observational cost analysis study was performed to quantify the average cost of an IVI procedure, independent of the drug injected.
Methods :
Activity-based costing, an accounting method which allocates a cost to each process component, was utilized in this analysis. Cost pools (CP) were divided by their practical capacity (PC), then multiplied by an activity rate (AR). 14 patients were observed at an academic center retina clinic to develop an IVI process map (PM). Direct material CPs and PC were determined by internal ordering records, and ARs by employee estimates and PM. Direct labor CPs and overhead costs were calculated using national reported averages. For comparison of calculated costs, reimbursement revenue for IVIs was drawn from the Centers for Medicare & Medicaid Services Fee Schedule for HCPCS 67028: Injection eye drug.
Results :
The average direct material, direct labor, and overhead costs per IVI procedure were $0.15, $80.04 (95% CI=20.46-139.24), and $53.01, respectively. 2018 Medicare reimbursement is $104.40/IVI, netting a gross margin of -$28.79 (-27.6%). The largest indirect costs were rent ($24.46), electronic health record (EHR) fees ($10.76), and billing/coding fees ($10.44). The largest direct cost was ophthalmologist labor ($62.35, 95% CI=19.02-105.67). PM revealed that more of this ophthalmologist labor time was spent on EHR documentation (u=6.68 min, SD=1.80 min, CV=27%) than patient greeting (u=3.49 min, SD=1.97 min, CV=56%) or the injection itself (u=2.34 min, SD=0.67 min, CV=29%) on average.
Conclusions :
The negative gross cost margin for IVIs suggests that intravitreal injections may not be appropriately valued by payors. Indirect cost drivers identified in this study imply that larger practices may possess a profitability advantage by distributing overhead costs over a larger patient pool. Targets for potential cost reduction include streamlining EHR documentation and reduction of patient greeting time, although tradeoffs of such actions must be considered.
This abstract was presented at the 2019 ARVO Annual Meeting, held in Vancouver, Canada, April 28 - May 2, 2019.