PERSPECTIVES J Oral Maxillofac Surg 72:1038-1039, 2014
The Cost of Third Molar Management Gino Inverso, BA,* Ronald Heald, MBA,y and Bonnie L. Padwa, DMD, MDz
The management of symptom-free, disease-free third molars is a widely debated topic. Although most studies addressing this issue have used scientific and clinical data, cost is an additional way to guide patient management decisions. Although previous studies have focused on the cost of billing charges to private insurance companies, there is little information on the cost of third molar management to providers. To investigate the cost of the operative and nonoperative management of symptom-free, disease-free third molars, a micro-costing study was conducted.1 The tested scenarios were immediate extraction of 4 third molars versus active surveillance of 4 third molars under the care of an oral and maxillofacial surgeon. Cost of third molar management was taken from the provider’s perspective. The costing protocol did not involve direct patient interaction or use of patient identifying material and therefore was exempt from institutional review board approval at Boston Children’s Hospital (Boston, MA). For micro-costing analysis of each management scenario, the complete patient care process was formulated into a list of clinical activities and clinical staff members involved in each respective activity. Average time (minutes) was taken for each clinical activity through direct observation of 3 visits for the 2 management scenarios occurring in an oral and maxillofacial surgery (OMS) office. Cost rates (dollars per minute) were derived for each clinical staff member. A cost rate is the total cost to support a clinical staff member divided into the staff member’s capacity to provide clinical care across a year (in minutes). Staff member capacity assumes 248 working days in a year (8 hours of work per day) with days
subtracted for weekends and national holidays. Costs for each staff member include salary, fringe benefits, and overhead costs for a private OMS practice. Median salary estimates for 2012 were taken from the US Bureau of Labor Statistics2 and fringe benefits were estimated at 29.7% of total staff member compensation.3 Table 1 lists the average cost per staff member in a private OMS office. Overhead costs for the average OMS practice were taken from the 2010 National Society of Certified Healthcare Business Consultants (Table 1).4,5 Cost figures from years past were adjusted at a 3% annual increase to depict 2013 estimates. The overhead cost projected for an average OMS practice in 2013 was $547,736.18 and distributed into the oral and maxillofacial surgeon’s cost. Each clinical activity time was multiplied by the cost rate of the staff member or members involved in that activity, deriving an activity-based cost for each clinical activity. Individual activity-based costs were summed to derive the total cost of each management scenario. A 3% annual increase was used to project cost scenarios longitudinally.
Scenario 1: Extraction of 4 SymptomFree, Disease-Free Third Molars The total estimated cost for all 3 visits associated with extraction of 4 third molars was $359.84 (Table 2). The consultation and postoperative visits required a receptionist, a surgery assistant, and an oral and maxillofacial surgeon. The operative visit required an additional surgery assistant (2 surgery assistants in total) and the procedure was performed with intravenous conscious sedation.
*Harvard Medical School Research Fellow, Department of Plastic
Address correspondence and reprint requests to Dr Padwa:
and Oral Surgery, Boston Children’s Hospital, Boston, MA; DMD Candidate, Harvard School of Dental Medicine, Boston, MA.
Department of Plastic and Oral Surgery, Children’s Hospital Boston, 300 Longwood Ave, Boston, MA 02115; e-mail: Bonnie.Padwa@
yHead Finance Administrator, Department of Plastic and Oral Surgery, Boston Children’s Hospital, Boston, MA.
childrens.harvard.edu Received May 29 2013
zOral Surgeon-in-Chief, Department of Plastic and Oral Surgery,
Accepted December 10 2013
Boston Children’s Hospital, Boston, MA; Associate Professor,
Ó 2014 American Association of Oral and Maxillofacial Surgeons
Department of Oral and Maxillofacial Surgery, Harvard School of
0278-2391/13/01540-1$36.00/0
Dental Medicine, Boston, MA.
http://dx.doi.org/10.1016/j.joms.2013.12.009
1038
1039
INVERSO, HEALD, AND PADWA
Table 1. ESTIMATED ANNUAL COST PER STAFF MEMBER IN A PRIVATE ORAL AND MAXILLOFACIAL SURGERY PRACTICE (2013)
Median salary Fringe benefits Overhead* Total cost
Oral and Maxillofacial Surgeon
Surgery Assistant
Receptionist
$233,068.40 $98,465.60
$41,673.80 $17,606.14
$31,445.90 $13,285.11
$547,736.18 $879,270.17
$0.00 $59,279.94
$0.00 $44,731.01
* Supplies—clerical, clinical; facilities—rent, building depreciation and interest, utilities, janitorial, repairs and maintenance; equipment—rental or lease, repair and maintenance, depreciation and interest; miscellaneous—auto, billing service, consulting, conventions, seminars, travel, dues, licenses and journals, insurance (malpractice/business), laboratory, legal and accounting, marketing and professional promotion, payroll taxes (surgeon and staff), other taxes, telephone, other. Inverso, Heald, and Padwa. Cost of Third Molar Management. J Oral Maxillofac Surg 2014.
Scenario 2: Active Surveillance of 4 Symptom-Free, Disease-Free Third Molars The cost for 1 active surveillance visit was $87.92 (Table 2). Each active surveillance visit
Table 2. AVERAGE TIME AND COST BY VISIT TYPE FOR EXTRACTION OF FOUR THIRD-MOLARS
Visit Type Consultation visit Patient intake Panoramic imaging Oral examination Operative visit Procedure room preparation Patient intake Preoperative patient preparation Operative procedure Patient recovery Postoperative visit Patient intake Oral examination Total cost
Average Time of Visit Visit Cost 0:24:36
took an average of 22 minutes (0:22:40) and entailed patient intake (check-in process, vital signs, review and update of medical record), panoramic imaging, and oral examination. Clinical staff members involved in the surveillance visit included a receptionist, a surgery assistant, and an oral and maxillofacial surgeon. Management through active surveillance consists of a routine visit every 2 years. Surveillance across 10, 20, and 30 years (5, 10, and 15 visits in total) was estimated at cumulative costs of $496.52, $1,163.80, and $2,060.57, respectively. By year 7, active surveillance became more costly than immediate extraction of 4 third molars. There are some limitations to this study. Cost rates were based on national averages and may vary regionally. In addition, active surveillance was performed by an oral and maxillofacial surgeon. Adequate active surveillance by a general dentist may prove to be more cost efficient. This study offers a comparative estimate of cost to providers for third molar management and is intended to advance the ongoing discussion on the management of symptom-free, disease-free third molars from an economic perspective. Although billing charges are commonly used in place of costing data for economic analyses, charges are negotiated in the private sector and thus are not representative of the true cost to the public health care sector. True cost should inform the economic viability of providing services for all patients within the public health sector, not just those with a particular type of insurance. Once the true cost is understood, the goal for providers and policy makers should be to increase access to care through opening services to a more diverse mix of payers.
$74.18
References 1:38:36
$235.86
0:12:58
$49.80
$359.84
Inverso, Heald, and Padwa. Cost of Third Molar Management. J Oral Maxillofac Surg 2014.
1. Kaplan RS, Anderson SR: Time-Driven Activity-Based Costing. Boston, MA, Harvard Business School Publishing Corporation, 2007 2. United States Department of Labor: Bureau of Labor Statistics: 2010 Occupational Outlook Handbook. Washington, DC, Author, 2013. Available at: http://www.bls.gov/ooh/ Accessed March 18, 2013. 3. Hadzima JG: How much does an employee cost? Reprint from Starting Up: Practical Advice for Entrepreneurs, Boston Business Journal-. Available at: http://web.mit.edu/e-club/hadzima/pdf/ how-much-does-an-employee-cost.pdf Accessed April 1, 2013 4. Pollock SL: BVR’s Guide to Valuing Dental Practices. Portland, OR, Business Valuation Resources, 2011 5. National Society of Certified Healthcare Business Consultants: Practice Statistics 2010. Reston, VA, Author, 2013. Available at: http://www.nschbc.org/statistics/index.cfm Accessed March 18, 2013.
The Cost of Third Molar Management Gino Inverso, BA,* Ronald Heald, MBA,y and Bonnie L. Padwa, DMD, MDz
The management of symptom-free, disease-free third molars is a widely debated topic. Although most studies addressing this issue have used scientific and clinical data, cost is an additional way to guide patient management decisions. Although previous studies have focused on the cost of billing charges to private insurance companies, there is little information on the cost of third molar management to providers. To investigate the cost of the operative and nonoperative management of symptom-free, disease-free third molars, a micro-costing study was conducted.1 The tested scenarios were immediate extraction of 4 third molars versus active surveillance of 4 third molars under the care of an oral and maxillofacial surgeon. Cost of third molar management was taken from the provider’s perspective. The costing protocol did not involve direct patient interaction or use of patient identifying material and therefore was exempt from institutional review board approval at Boston Children’s Hospital (Boston, MA). For micro-costing analysis of each management scenario, the complete patient care process was formulated into a list of clinical activities and clinical staff members involved in each respective activity. Average time (minutes) was taken for each clinical activity through direct observation of 3 visits for the 2 management scenarios occurring in an oral and maxillofacial surgery (OMS) office. Cost rates (dollars per minute) were derived for each clinical staff member. A cost rate is the total cost to support a clinical staff member divided into the staff member’s capacity to provide clinical care across a year (in minutes). Staff member capacity assumes 248 working days in a year (8 hours of work per day) with days
subtracted for weekends and national holidays. Costs for each staff member include salary, fringe benefits, and overhead costs for a private OMS practice. Median salary estimates for 2012 were taken from the US Bureau of Labor Statistics2 and fringe benefits were estimated at 29.7% of total staff member compensation.3 Table 1 lists the average cost per staff member in a private OMS office. Overhead costs for the average OMS practice were taken from the 2010 National Society of Certified Healthcare Business Consultants (Table 1).4,5 Cost figures from years past were adjusted at a 3% annual increase to depict 2013 estimates. The overhead cost projected for an average OMS practice in 2013 was $547,736.18 and distributed into the oral and maxillofacial surgeon’s cost. Each clinical activity time was multiplied by the cost rate of the staff member or members involved in that activity, deriving an activity-based cost for each clinical activity. Individual activity-based costs were summed to derive the total cost of each management scenario. A 3% annual increase was used to project cost scenarios longitudinally.
Scenario 1: Extraction of 4 SymptomFree, Disease-Free Third Molars The total estimated cost for all 3 visits associated with extraction of 4 third molars was $359.84 (Table 2). The consultation and postoperative visits required a receptionist, a surgery assistant, and an oral and maxillofacial surgeon. The operative visit required an additional surgery assistant (2 surgery assistants in total) and the procedure was performed with intravenous conscious sedation.
*Harvard Medical School Research Fellow, Department of Plastic
Address correspondence and reprint requests to Dr Padwa:
and Oral Surgery, Boston Children’s Hospital, Boston, MA; DMD Candidate, Harvard School of Dental Medicine, Boston, MA.
Department of Plastic and Oral Surgery, Children’s Hospital Boston, 300 Longwood Ave, Boston, MA 02115; e-mail: Bonnie.Padwa@
yHead Finance Administrator, Department of Plastic and Oral Surgery, Boston Children’s Hospital, Boston, MA.
childrens.harvard.edu Received May 29 2013
zOral Surgeon-in-Chief, Department of Plastic and Oral Surgery,
Accepted December 10 2013
Boston Children’s Hospital, Boston, MA; Associate Professor,
Ó 2014 American Association of Oral and Maxillofacial Surgeons
Department of Oral and Maxillofacial Surgery, Harvard School of
0278-2391/13/01540-1$36.00/0
Dental Medicine, Boston, MA.
http://dx.doi.org/10.1016/j.joms.2013.12.009
1038
1039
INVERSO, HEALD, AND PADWA
Table 1. ESTIMATED ANNUAL COST PER STAFF MEMBER IN A PRIVATE ORAL AND MAXILLOFACIAL SURGERY PRACTICE (2013)
Median salary Fringe benefits Overhead* Total cost
Oral and Maxillofacial Surgeon
Surgery Assistant
Receptionist
$233,068.40 $98,465.60
$41,673.80 $17,606.14
$31,445.90 $13,285.11
$547,736.18 $879,270.17
$0.00 $59,279.94
$0.00 $44,731.01
* Supplies—clerical, clinical; facilities—rent, building depreciation and interest, utilities, janitorial, repairs and maintenance; equipment—rental or lease, repair and maintenance, depreciation and interest; miscellaneous—auto, billing service, consulting, conventions, seminars, travel, dues, licenses and journals, insurance (malpractice/business), laboratory, legal and accounting, marketing and professional promotion, payroll taxes (surgeon and staff), other taxes, telephone, other. Inverso, Heald, and Padwa. Cost of Third Molar Management. J Oral Maxillofac Surg 2014.
Scenario 2: Active Surveillance of 4 Symptom-Free, Disease-Free Third Molars The cost for 1 active surveillance visit was $87.92 (Table 2). Each active surveillance visit
Table 2. AVERAGE TIME AND COST BY VISIT TYPE FOR EXTRACTION OF FOUR THIRD-MOLARS
Visit Type Consultation visit Patient intake Panoramic imaging Oral examination Operative visit Procedure room preparation Patient intake Preoperative patient preparation Operative procedure Patient recovery Postoperative visit Patient intake Oral examination Total cost
Average Time of Visit Visit Cost 0:24:36
took an average of 22 minutes (0:22:40) and entailed patient intake (check-in process, vital signs, review and update of medical record), panoramic imaging, and oral examination. Clinical staff members involved in the surveillance visit included a receptionist, a surgery assistant, and an oral and maxillofacial surgeon. Management through active surveillance consists of a routine visit every 2 years. Surveillance across 10, 20, and 30 years (5, 10, and 15 visits in total) was estimated at cumulative costs of $496.52, $1,163.80, and $2,060.57, respectively. By year 7, active surveillance became more costly than immediate extraction of 4 third molars. There are some limitations to this study. Cost rates were based on national averages and may vary regionally. In addition, active surveillance was performed by an oral and maxillofacial surgeon. Adequate active surveillance by a general dentist may prove to be more cost efficient. This study offers a comparative estimate of cost to providers for third molar management and is intended to advance the ongoing discussion on the management of symptom-free, disease-free third molars from an economic perspective. Although billing charges are commonly used in place of costing data for economic analyses, charges are negotiated in the private sector and thus are not representative of the true cost to the public health care sector. True cost should inform the economic viability of providing services for all patients within the public health sector, not just those with a particular type of insurance. Once the true cost is understood, the goal for providers and policy makers should be to increase access to care through opening services to a more diverse mix of payers.
$74.18
References 1:38:36
$235.86
0:12:58
$49.80
$359.84
Inverso, Heald, and Padwa. Cost of Third Molar Management. J Oral Maxillofac Surg 2014.
1. Kaplan RS, Anderson SR: Time-Driven Activity-Based Costing. Boston, MA, Harvard Business School Publishing Corporation, 2007 2. United States Department of Labor: Bureau of Labor Statistics: 2010 Occupational Outlook Handbook. Washington, DC, Author, 2013. Available at: http://www.bls.gov/ooh/ Accessed March 18, 2013. 3. Hadzima JG: How much does an employee cost? Reprint from Starting Up: Practical Advice for Entrepreneurs, Boston Business Journal-. Available at: http://web.mit.edu/e-club/hadzima/pdf/ how-much-does-an-employee-cost.pdf Accessed April 1, 2013 4. Pollock SL: BVR’s Guide to Valuing Dental Practices. Portland, OR, Business Valuation Resources, 2011 5. National Society of Certified Healthcare Business Consultants: Practice Statistics 2010. Reston, VA, Author, 2013. Available at: http://www.nschbc.org/statistics/index.cfm Accessed March 18, 2013.
