ABSTRACT
The uncertainty about what healthcare delivery actually costs is the result of the decades-long fee-for-service payment system in the United States, in which charges to patients (and insurers) have not been based directly on costs but, rather, have been based on volume: that is, on providing more services to more people. The Institute for Healthcare Improvement's Triple Aim, a term coined in 2008, equalizes the goals of achieving better care, better health, and reduced costs. This chapter explains how to use Shadowing and Time-Driven Activity-Based Costing in the context of the Patient Centered Value System to: determine the true (actual) cost of delivering care for any specific medical or surgical condition; identify true cost drivers in any segment of care delivery and over the full cycle of care; and achieve the Triple Aim by driving down costs in a way that protects or improves outcomes and experiences.
