The hospital cost of primary reverse total shoulder arthroplasty performed with traditional instrumentation: a Time-Driven Activity-Based Costing (TDABC) benchmark analysis in the era of digital enabling technology

Abstract

Background

There is increasing interest in the use of digital enabling technology, and particularly robotic-assisted surgery, to perform reverse total shoulder arthroplasty (rTSA). However, a major concern with the adoption of digital enabling technology is the potential for increased cost, related not only to the capital cost of acquisition and disposables but also to longer procedure times. Time-Driven Activity-Based Costing (TDABC) was developed to calculate the true cost of healthcare by meticulously tracking the resources and time consumed during each step of a patient's hospital journey. The purpose of this study was to apply TDABC and traditional costing to analyze the costs of rTSA performed with traditional instrumentation in order to establish a benchmark for future comparison with new technologies.

Methods

Twenty-five primary rTSA performed at a single high-volume institution in the United States in 2025 were included in this prospective TDABC study. A detailed process map of all pre-operative, intraoperative, and post-operative activities patients underwent from hospital admission to same-day hospital discharge was created. A single observer followed all 25 patients and used a chronometer to accurately record the time spent in each activity mapped. Costs generated through TDABC were combined with the cost of supplies, equipment, medications, and other direct and indirect operational activities to obtain the total cost. The cost of drugs, durable medical equipment, and supplies was obtained using the traditional costing method for the TDABC group as well. The results of both costing methods were then compared by 2 independent financial analysts.

Results

The average standardized hospital cost of the 25 primary rTSAs included in the study was estimated to be $21,579 using traditional costing and $16,547 using TDABC. Medical devices represented the largest cost using both methods (39% of the total cost for traditional costing and 51% for TDABC). Traditional costing overestimated personnel cost and fixed direct costs compared to TDABC. On average, surgeons spent an average of 47 minutes to perform the critical portion of the rTSA procedure. The average per minute salary cost for all personnel categories was $24.

Conclusion

In a high-volume institution, there was an average $5,000 difference in estimated costs using traditional costing vs. TDABC. This methodology and results represent a benchmark that can be used to understand the potential added cost of digital enabling technology, and particularly robotic-assisted rTSA, as widespread adoption increases over time.

Cost assessment in orthopedic surgery is becoming increasingly important due to the increase in the number of procedures performed and stricter oversight by health insurance providers. The Time-Driven Activity-Based Costing (TDABC) method makes it possible to accurately assess the cost of surgery and determine the actual cost of each step by identifying time and effort at the various stages of the hospital episode.

Additionally, there is increasing interest in the use of digital enabling technology, and particularly robotic-assisted surgery, to perform reverse total shoulder arthroplasty (rTSA).¹⁴ However, a major concern with the adoption of digital enabling technology at the time of rTSA is the potential for increased cost related to not only the capital acquisition and disposable expenses but also the potential for a longer surgical procedure, which might consume more resources in the operating room.⁶ To understand the cost implications of digital enabling technology when performing rTSA, it is first necessary to accurately determine the cost of rTSA performed using traditional instrumentation and techniques.

Traditional costing methods, which average overhead costs across all patients, do not provide precise, granular cost data.¹ In prior publications, traditional estimates have been reported to overestimate the cost of many surgical procedures, including arthroplasty, regardless of the joint involved.¹ For hip and knee arthroplasty, traditional methods have been reported to have an estimate that is double the real cost.¹²

TDABC was developed to calculate the actual cost of healthcare by meticulously tracking the resources and time consumed at each stage of a patient's hospital journey.¹⁶ In recent years, TDABC has been adopted as the preferred method to establish cost benchmarks in orthopedic surgery, particularly arthroplasty. The process includes creating a detailed map of processes and personnel, measuring the time spent per activity/individual, and considering the salary and other expenses, such as implants.⁷

In the field of shoulder replacement, the TDABC method has shown that in high-volume centers the most substantial costs are related to implants and personnel,4, 11 without major variability according to hospital or surgeon.⁴ TDABC has also been considered when selecting perioperative analgesia modalities based on both effectiveness and cost.¹³ Using TDABC, shoulder arthroplasty has been reported to be more expensive in female patients with comorbidities (American Society of Anesthesiologists > 3) and patients with worse pre-operative pain and function (low American Shoulder and Elbow Surgeons score).¹¹

The objectives of this study were to (1) create a detailed map of the patient journey when same-day primary rTSA is performed, (2) apply TDABC to establish a benchmark for future comparison with digital enabling technology modality, and (3) compare the cost estimated using TDABC with traditional costing methods.

Methods

Patients and procedures

Twenty-five primary rTSA performed by 4 fellowship-trained surgeons at a single high-volume institution in the United States in the year 2025 were included in this prospective TDABC study. The sample size of this study was decided based on recommendations by our institutional Science of Healthcare Delivery Research Unit, with ample experience in these types of studies. For these 25 arthroplasties, the surgeons committed to performing the procedure themselves, as opposed to guiding trainees through the procedure. Each of them had ample experience with one or more implants: 10 shoulders received a Comprehensive rTSA (Zimmer Biomet, Warsaw, IN, USA), 8 shoulders received a Perform rTSA (Stryker, Kalamazoo, MI, USA), 6 shoulders received an Altivate rTSA (Enovis, Wilmington, DE, USA), and 1 shoulder received a ReUnion rTSA (Stryker). Surgeon #1 performed 8 rTSA, surgeon #2 8, surgeon #3 7, and surgeon #4 2 rTSA.

The underlying diagnosis was glenohumeral osteoarthritis in 13 shoulders, cuff tear arthropathy in 6 shoulders, an irreparable cuff tear in 4 shoulders, and rheumatoid arthritis in 2 shoulders. There were 13 females and 12 males with a mean age at the time of surgery of 70 ± 12 years. Their average body mass index was 29.2 ± 7 kg/m², and the mean Charlson comorbidity score of 4 ± 2. Pre-operatively, the average visual analog scale was 5.5 ± 2 with an average Single Assessment Numeric Evaluation score of 31 ± 15% and a mean American Shoulder and Elbow Surgeons score of 35 ± 15 points.

All surgeries were performed under pre-operative ultrasound-guided interscalene blockade using a combination of lidocaine and liposomal bupivacaine (Exparel, Pacira Biosciences, Swindon, United Kingdom), followed by general anesthesia. All procedures were performed with standard instrumentation. No patient-specific guides or any other digital enabling technology was used except for the availability of a computed tomography-based pre-operative plan in the operating room.

The tendon of the long head of the biceps was tenodesed in all shoulders when present. Subscapularis management was through tenotomy in 18 shoulders and peel in 7 shoulders. Lesser tuberosity osteotomy and subscapularis-sparing approaches were not included. The subscapularis could be, and was, repaired in 23 shoulders. At the end of the procedure, a standard shoulder immobilizer was applied in all procedures, and a single anteroposterior radiograph with the patient lying supine was obtained in a radiology suite after the patient left the operating room and before taking the patient to the post-operative care unit. All procedures were performed as same-day surgery.

Study design and analysis

A detailed process map of all pre-operative, intraoperative, and post-operative activities patients underwent from hospital admission to same-day hospital discharge was created. Figure 1 provides a graphic representation of the map constructed and used in this study. A single observer not involved in any of the patient care activities followed all 25 patients from admission to discharge and used a chronometer to accurately record the time spent in each activity mapped.

Figure 1.

TDABC time map of phases during shoulder arthroplasty steps of care. HUC, Health Unit Coordinator; RN, registered nurse; A, attending; R, resident, F, fellow; AN, anesthesia; CRNA, Certified Registered Nurse Anesthesia; SRNA, Student Registered Nurse Anesthesia; PA, physician assistant; CST, Certified Surgical Technician; CSA, Certified Surgical Assistant; SA, surgical assistant; CN, circulating nurse; XR, X-ray; PCA, patient care assistant; NP, nurse practitioner; PACU, postanesthesia care unit; OR, operating room; OP, outpatient; AM, ambulatory; IV, intravenous; H&P, history and physical; Ht, height; Wt, weight; Meds, medications; Q/A, questions/answers; TDABC, Time-Driven Activity-Based Costing. The average duration of each step in the process is listed in minutes in each white box, rounded to 2 decimal places, except for exact values with no decimals.

Two financial analysts applied traditional and TDABC methods to all 25 hospital episodes. For the TDABC method, direct fixed costs were obtained from the use of operating room services, and indirect overhead costs are obtained by applying a 20% inflation factor to direct costs. Salary data were obtained from publicly available National Bureau of Labor Statistics data as well as Ziprecruiter.com for specific roles like circulating nurses, general service transportation, and health unit coordinators. Costs generated through TDABC were combined with the cost of supplies, equipment, medications, and other direct and indirect operational activities to obtain the total cost. The cost of drugs, durable medical equipment, and supplies was obtained using the traditional costing method for both groups. The results of both costing methods were then compared. The traditional costing method used standardized cost described elsewhere.¹⁷

Results

The results of this study are largely summarized in 2 tables. Table I summarizes the average time in minutes for each professional category per patient. Table II summarizes estimated costs using TDABC and traditional costing methods. The average standardized hospital cost of the 25 primary rTSA included in the study was $21,579 using traditional costing and $16,547 using TDABC.

Table I.

Average time spent by each professional involved in the care of the 25 patients included in the study (average minutes/patient)

Personnel	Average minutes
Anesthesiologist attending	51.6
Orthopedic attending	46.7
Fellows/residents	143.3
Registered nurse	248.5
Pharmacy technician	1.0
Pharmacist	1.3
Certified Registered Nurse Anesthesiology	115.4
Chaplain	0.2
Health Unit Coordinator	1.4
Intravenous technician	6.4
Laboratory technician	1.1
Patient care assistant	23.8
Certified Surgical Assistant	135.8
Circulating nurse	128.6
Certified Surgical Technician	163.0
Student Registered Nurse Anesthetist	55.8
Ortho physician assistant	20.4
Nurse practitioner	0.8
Urologist technician	0.3
X-ray technician	4.6
Total	1150.0

Table II.

Cost comparison of averages estimated with TDABC and traditional costing (TC)

Categories	TDABC	%	TC	%
Medical equipment	$8,395	51	$8,395	39
Supplies	$2,110	13	$2,110	10
Drugs	$438	3	$438	2
Personnel	$1,483	9	$4,483	21
Fixed direct	$1,363	8	$1,924	9
Indirect costs	$2,758	17	$4,229	20
Total	$16,547	100	$21,579	100

TDABC, Time-Driven Activity-Based Costing; TC, traditional costing.

Medical devices represented the largest cost using both methods (39% of total cost for traditional costing and 51% for TDABC). Using the same TDABC method, medical devices were followed by indirect costs (17%, $2,758) and supplies (13%, $2,110). Personnel costs from patient admission to surgery (21%, $4,483) were the second largest expense using the traditional calculation method, ahead of indirect costs (20%, $4,229) and supplies (10%, $2,110). Traditional costing overestimated personnel cost and fixed direct costs compared to TDABC. On average, surgeons spent an average of 47 minutes to perform the critical portion of the rTSA procedure. The average per-minute salary cost for all personnel category was $24.

Discussion

Accurate estimation of the hospital costs associated with primary rTSA is paramount for multiple aspects of healthcare, including reimbursement considerations, opportunities for process improvements, and benchmark references against to which the introduction of new, expensive technologies can be assessed in the context of traditional surgical procedures. This is particularly relevant now, since over the next decade there is a high likelihood for widespread adoption of digital enabling technologies in shoulder arthroplasty, particularly robotics.

The results of this study provide a detailed process map that can be used to analyze costs using Time-Driven Activity-Based Counting methodology. In our study, TDABC estimates were lower than traditional costing estimates. Time in the operating room was carefully mapped and measured, providing an accurate benchmark for future comparisons when various digital enabling technologies are introduced. This study also provides a framework for how future TDABC studies for any arthroplasties may be conducted.

This study showed that the average cost per minute when performing a primary rTSA was $24, with an average operating time of 47 minutes spent by surgeons during the critical portion of the procedure. TDABC methodology estimated the hospital cost of a primary rTSA in a single institution at approximately $16,500 for a consecutive series of 25 patients operated on by 4 expert fellowship-trained surgeons, whereas the traditional method estimated the average cost to be approximately $5,000 higher.

The number of shoulder arthroplasties performed in the United States is constantly increasing, with the number of reverse prostheses tripling in under 10 years.² In parallel, the use of digital enabling technology is quickly being developed.3, 8, 14 The main benefit of these technologies is to guide accurate and precise implant position, with encouraging results in cadaver implant studies.8, 15 The hope is that elimination of outliers will translate into less complications, better outcomes, and hopefully some efficiencies. However, currently the main concern includes the potential for a longer surgical procedure and the increased costs associated with capital acquisition and disposables.

The differences in estimated cost between traditional methods and TDABC reported in our study are consistent with prior publications.1, 12 This comparison between these 2 cost evaluation methods has been used for joint replacement surgery, particularly in the lower limbs: total hip replacement (THA) and total knee replacement (TKA).1, 12 In their study of more than 600 prostheses performed by a single surgeon, Akhavan et al¹ found a significant difference between the cost of THA and TKA when evaluated using traditional methods versus the TDABC method, with differences comparable to those in our study. The costs of the operating room, accommodation, and meals were the costs that showed the greatest variation between the traditional method and TDABC.¹ Another study involving more than 100 hip replacements and 150 knee replacements highlighted a difference in cost assessment between traditional methods and TDABC by a factor of approximately 2¹². Once again, personnel and facilities were 2 categories for which the differences in assessment were significant.¹² Palsis et al¹² point out in this study that the true overall costs probably are in between the estimates of these 2 methods, although TDABC allowed for an accurate assessment of patient-related costs within the care pathway.

Unlike the 2 studies cited above evaluating hip and knee arthroplasty surgery, the first expense in our study corresponded to the costs of implants, with 4 different prostheses provided by 3 manufacturers to the same institution. Similarly, in a study of more than 400 total shoulder replacements, Menendez et al¹¹ also found that the most significant expense was related to the purchase of implants. It was interesting to note that the most significant variations were related to post-operative care and medication, which could be linked to greater pre-operative comorbidities and patients who were in more pain and consumed more analgesics pre-operatively.¹¹ In fact, in their study, the patients with the highest costs according to the TDABC method were American Society of Anesthesiologists 3 or higher and had low pre-operative functional scores.¹¹ In the study by Carducci et al⁴, costs were again dominated by implants and personnel in the patient circuit. The adjustment variable in terms of shoulder surgery seems to be the negotiation of implant costs with companies and institutions.

The number of shoulder arthroplasties performed in the United States is constantly increasing, with the number of reverse prostheses tripling in under 10 years.² In parallel, the use of digital enabling technology is quickly being developed.3, 8, 14 The main benefit of these technologies is to guide accurate and precise implant position, with encouraging results in cadaver implant studies.8, 15 The hope is that elimination of outliers will translate into less complications, better outcomes, and hopefully some efficiencies. However, currently the main concern includes the potential for a longer surgical procedure and the increased costs associated with capital acquisition and disposables. In the context of robotic surgery, the TDABC assessments will determine whether robotic rTSA is potentially more expensive due to longer operating room occupancy times or a higher cost of the disposables. Robotic rTSA could also be less expensive due to more optimal implant positioning, resulting in safer and shorter surgeries. In complex cases, robotic rTSA could achieve precise positioning.

The adoption of robotic technology in shoulder arthroplasty could add additional costs,6, 9, 10, 14 but in lower limb surgery, the reported results appear to be mixed.6, 9, 10 Goh et al⁶ reported that robotic surgery was less expensive for unicompartmental knee arthroplasty when the cost of implants was included. On the other hand, for TKA, Fang et al⁵ reported higher costs for robot-assisted TKA when comparing with traditional instrumentation TDABC, despite a shorter hospital stay. The increased cost was attributed to the surgical procedure taking longer.⁵ For hip surgery, it appears that after controlling for comorbidities, robotic-assisted THA evaluated using the TDABC method did not cost more than non-robotic surgery, even when considering the cost of implants.⁹

This study has several limitations. First, all 4 surgeons performing the procedures are high-volume and very experienced with the implants used. Our results may not be extrapolated to other surgeons, especially when trainees perform critical parts of the procedure. Second, the study is based on the prospective mapping of only 25 primary rTSA; however, the mapping and time measurement were very strict by a single trained observer, and all calculations were performed by 2 very experienced financial analysts. Third, the salary data used in this study were derived from Bureau of Labor Statistics, which represents national median salary of the personnel involved and therefore may not be representative to a specific hospital. However, individual institutions may substitute their own salary data to generate TDABC estimates that are more relevant to their specific organizational contexts and decision-making.

Conclusion

Our study allowed creating a detailed process map for same-day primary rTSA and demonstrated the value of TDABC methodology to identify true costs, highlight opportunities for financial improvement, and provide a benchmark that can be used to evaluate the financial impact of future digital enabling technology.

Disclaimers:

Funding: No funding was disclosed by the authors.

Conflicts of interest: The authors, their immediate families, and any research foundations with which they are affiliated have not received any financial payments or other benefits from any commercial entity related to the subject of this article.