Inside the Value Revolution at Children’s Hospital Boston: Time-Driven Activity-Based Costing in Orthopaedic Surgery

It is an exciting, and potentially turbulent time in the evolution of health care delivery in the United States. Despite decades of debate and piecemeal political reforms, the health care system remains inefficient in many ways and is becoming increasingly expensive. Increases in national health care expenditure continue to outpace inflation, exceeding 17% of the gross domestic product. Rising health care expenditures compromise both the economic stability of the United States and the treatment of the sick and injured. In addition, attempted regional and national health care reform has shouldered health care providers with further responsibility. The pressure is on providers to treat more patients, while offering better care at lower costs. “Better for less” is the demand. In this climate of change, physicians must educate themselves in the vocabulary of the epidemiological, political, ethical, and economic forces that influence the evolving health care economy, both to inform provider perspectives and to provide meaningful comment as reform progresses. Based on the seminal work of Harvard Business School Professors Michael Porter and Robert Kaplan in value-based health care delivery,2-5 the Department of Orthopaedic Surgery at Children’s Hospital Boston has initiated a series of projects aimed at improving value in health care delivery investigations specifically focused on reducing costs while maintaining or improving health outcomes.