Collect Cost Data

Personnel Costs

Typically, personnel accounts for the largest segment of program costs. Finding the personnel costs of treating each patient involves two basic tasks:

• Measuring the cost of services provided directly to the patient (direct service). Direct service personnel are counselors, social workers, nurses, physicians, and psychologists who spend the majority of their time working directly with patients.

• Dividing among patients the costs of treatment resources that are not used to treat individual patients but are necessary to run the program (indirect service). Indirect service personnel typically are managers, clerical staff, maintenance workers, accountants, and others who do not usually work directly with patients.

The distinction between direct and indirect is critical in calculating costs and may be different for cost analyses than for current billing practices. For instance, many programs are unable to bill for services when the patient is not present, such as telephone calls or case planning meetings with other service providers, even though these activities may be essential to change patients' behavior. The resources that make these potentially crucial procedures possible need to be included and measured as direct costs for individual patients.

Direct Service Personnel

Time spent by personnel providing services to a patient is a cost that can be assigned immediately to that patient. This includes time spent in direct contact with the patient (e.g., during a counseling session) and time spent doing other things for that patient (e.g., calling an attorney who is arguing the patient's case or meeting with a supervisor about the patient).

Because different program personnel may have their time valued differently, receiving different salaries or wages, you need to collect this information in terms of hours; the data are translated into dollars at a later stage.

Each member of the staff should complete a daily timesheet recording time spent by patient and by activity. Activities include direct patient services subdivided into specific procedures, direct services on behalf of individual patients, and indirect services in support of the program.

Other Direct Services

All patient contacts should be recorded as direct costs for that particular patient. However, not all contacts are treatment. For example, intake interviews, screening, and psychological testing, which may involve direct service staff, are not treatment procedures. Such activities are used with all patients regardless of treatment procedure and are not directly related to patient outcome. This time should be recorded on the timesheet under the appropriate activity and patient codes.

Indirect Services

Indirect service activities, such as doing paperwork, attending meetings, or participating in training workshops, also need to be recorded by direct service staff. Specific categories of indirect services are only necessary to track if you want to analyze the costs of those services separately. Otherwise, a simple "indirect services" category should suffice.

Indirect Service Personnel

Time spent by personnel in activities related to the operation of the program, but not related to treatment of individual patients, needs to be included in the cost of treating a patient. If the value of this indirect service time is not included in treatment costs, the real cost of treatment will be underestimated. Activities ranging from weekly staff meetings to mass urine screenings to supervision are essential in maintaining the program and, thus, serving patient needs.

Some staff may have direct contact with patients yet not be involved in treatment, such as the receptionist or the staff member who collects urine. The receptionist's time should probably all be recorded as indirect, but you might consider the time involved in urine collection as a direct cost for the individual patient, depending on your program.

You can ask administrators and other personnel who provide the balance of indirect services to record the activities they perform, or you can simply assign all their work to indirect services, depending on what costs you are interested in analyzing. For example, you might want to collect data on the cost of performing your cost analyses.

Some administrators and office staff may split their time between different programs, or between treatment programs, research, and teaching at other institutions. To determine the portion of these individuals' time and salary that should be allocated to the program for which costs are being assessed, you need detailed records of how much time the individuals actually spend in program-related activities. They, too, should fill out a daily timesheet.

Volunteers

All individuals who contribute to the running of your program should fill out a timesheet, even if they are not paid. If they provide assistance that you would otherwise either pay someone to do or be forced to cut back on your services, they should record their time. This includes interns, community volunteers, family members, and in some cases, patients.

Other Direct Patient Costs

Space

The second largest cost of a program is payment for (or the equivalent cost of) working space. This cost should also be allocated by patient. Simply dividing the total cost by total number of patients does not give an accurate measure. Rather, the time that a given space (say, a counselor's office) was used for a particular procedure with a particular patient should be recorded.

Since different rooms and areas of a facility differ in size (and therefore in cost), it will be necessary to also specify which office or room was used. If offices are all the same size, 'office' would be sufficient designation. If offices vary appreciably in size, it may be necessary to use categories like 'office 1,' 'office 2,' and so forth. Rooms for group meetings could be designated as just that, and other spaces could have similar usage definitions.

Other Resources

To the extent that administering a specific treatment procedure to a particular patient involves expenditure of resources other than personnel and space, the amount of those resources spent should be recorded for that patient. This is especially important for resources that may vary between patients in ways not proportional to the amount of direct services they receive.

For instance, it is conceivable that some patients but not others would be transported to the substance abuse treatment and related programs. Patients also may differ in how much it costs them to get to and from your program.

It is possible that some other categories of resources, such as medical supplies or communications expenditures, are used more for some patients than others. Naltrexone or methadone, for example, might be used for some patients and might vary between those patients in dosage amount and frequency. Similarly, telecommunications charges might be higher for patients who live farther from the clinic, or who receive remote treatment procedures such as therapy contacts via phone or over Internet connections. Petty cash expenses and assistance provided to patients also may differ dramatically between patients.

Vendor services also may be prescribed for some patients and not others. Consider, for example, the need for some patients to have urinalyses that detect not just presence or absence of drug metabolites but concentrations that allow estimates of time since last substance use.

Know When to Stop Enumerating Direct Service Costs

At some point, one has to stop listing specific costs and let them be part of the overhead cost. Although there are no hard and fast rules for determining this point, cost accounting should not become so cumbersome as to lead to staff rebellion. If a cost cannot easily be entered on a standard form by the person performing that service, it may not be worth recording.

Forms and Formats

Personnel Time

Measuring who provided what services to which patients for how long should be done soon after the service is provided to preserve accuracy. Most programs already record this information for licensing or accreditation. Much of the cost data needed for cost-effectiveness and cost-benefit analysis can be derived readily from information collected routinely in many service systems. Additional information needed for specific cost analyses may simply need to be added to existing forms.

Ultimately, the information needs to be recorded on a form that shows -

• The date and time the service was delivered.

• The patient(s) who received the service.

• The person who provided the service.

• The nature of the service (the procedure).

• The amount of each resource used when providing the service.

A form can be created to remind personnel to record this information. The form can show a blank for each item that needs to be filled in, as shown in table 6. This is a service- or procedure-driven form similar to patient-driven forms used by many programs where services are recorded per patient and then kept in patient records. The patient-driven forms are appropriate for deriving cost data as long as they include the information above.

Whatever recording method is used, services provided on behalf of a particular patient when that patient was not present (such as telephone calls, case meetings, and paperwork) should be included with specific time allocations for each procedure for that patient.

Table 6. Sample Daily Timesheet

Name:				Date:
Time (hours)	Patient Code	Activity Code	Space Code	Direct Cost (code and amount)	Other

Activity codes: 01  Individual counseling   02  Group counseling* 03  Drug education 04  STD and HIV education 05  Financial advising 06  Couples therapy 07  Case management 08  Pharmacotherapy 09  Other treatment 10  Meetings   11  Paperwork     12  Supervision   13  Cost accounting 14  All other indirect A01  Intake   A02  Assessment

Space codes: 01  Office 1 02  Office 2 03  Group meeting room

Direct cost codes: M  Medication (list type and number of doses) T  Transportation (list cost if known otherwise T1 for one-way, T2 for round trip) P  Advances from petty cash   C  Communication services V  Vendor services O  Miscellaneous ($ amount)

*If group meeting, list below codes for all patients who attended. If more than one group meeting recorded here, identify as Group 1, Group 2, etc., both in column above and in list below.

When paperwork, supervision, or meetings are not related to specific patients, the activity code would be entered with no patient code. To ensure that the patient code was not omitted through oversight, patient code 000 could represent "not patient related" on timesheets for direct service providers.

Codes should be created for all indirect activities of interest to the program, such as staff meetings, training, community meetings, site preparation, financial report analysis, and administrative meetings. If you do not expect to analyze the costs or benefits of specific indirect activities, do not burden staff with unnecessary time breakdowns.

A good pilot-test of time recording is essential. Ask for extensive staff feedback on ease of use, activities selected, clarity, and relevance.

Other Expenditures

The amount of each resource expended when providing direct services to each patient may have to be recorded according to Federal law (e.g., methadone dose). Other resources, such as patient transportation or long-distance phone use, may not be recorded by accounting or billing procedures in a way that allows expenditure of the resource to be traced back to a particular counselor, procedure, or patient. Where feasible, these expenses should be recorded on the timesheet of the person performing the service or authorizing the expenditure.

In some cases, it may be easier to use a separate cost-tracking form (table 7). The results need to be entered in separate rows for each resource and in appropriate columns for procedures and patients. If a resource such as transportation enables several procedures, such as individual therapy and HIV/STD education provided during the same visit to the program, that resource should be distributed among the procedures according to the relative cost of the other resources spent on those procedures, such as counselor time. In some cases, depending on the proposed level of analysis, it may suffice to divide a cost such as transportation equally among associated procedures.

Table 7. Sample Cost Recording Form

Cost Code	Amount	Patient Code	Activity Code	Explanation

If a single cost applies to more than one patient or more than one activity, please list all appropriate codes in same row as the amount.

Other Forms

Although forms on paper or computers are the most common methods of data collection, your staff may find it more convenient to record essential cost information by speaking into a tape recorder. Mark-sensitive forms also can be developed and used to record and input information quickly.

Some human service programs have had success with bar code readers. A wand or small card is moved over different bar code patterns to record the date, time, patient, service type, service duration, and other information. The wand inputs the codes directly into a computer. The card can store one or more days of information for later downloading to a computer. Personal information managers (PIMs) or personal digital assistants (PDAs) also can be programmed to prompt staff to record information about program activities and to transfer those data to computers at the end of the day.

Electronic forms can be filled out on a computer and then sent to a spreadsheet file or other cost information data base on the computer network. These "on-line forms" allow information to be communicated directly from the service provider to the computer data base. You may want to store this information in a temporary file and review it for accuracy and completeness before depositing it in the cost data base.

Train Staff to Record Data

Once the recording forms have been developed, pilot-tested, and adapted, staff must be trained in their use. This important step is frequently skipped because of time pressures and because the forms may appear self-explanatory. Too often, however, the information to be entered can be interpreted in many ways. To ensure that the information recorded is the same across all staff, take the time to train staff on how to use forms and what is to be recorded. Remember to also train all new staff members and volunteers as they enter your program.

Ensure Complete Data Collection

The forms above tell you what information is needed but not exactly how to get it. Although some people are conscientious about completing and turning in forms on time, others avoid or neglect the task.

The following sections present strategies for ensuring a steady flow of complete and accurate cost information. Similar strategies may be needed to obtain information on program effectiveness and benefits, although the providers of that information are more likely to be patients.

Assign Daily Deadlines

Experience has shown that simply giving providers forms does not produce a high rate of return. Providers often forget to fill out the forms or they leave them until the end of the week or month. The delay usually results in guesswork and haphazard form completion just before the deadline.

To produce a high rate of form return, allow time daily for record completion and require that the forms be submitted before the providers leave work. In addition, a supervisor needs to check forms on an ongoing basis (daily, preferably). Accurate and timely data are key to passing an audit, passing a license review, withstanding a liability claim, and conducting cost-related analyses. Inaccurate or delayed record completion should be addressed in staff or supervision meetings.

Validate Information

Neither completeness nor accuracy is guaranteed, however, by a daily deadline. Only someone who checks the forms against other service records, such as clinical case notes, can determine completeness (Did services get recorded for all patients who received them?) and accuracy (Did the amount of services, such as session duration, get recorded for each service the patient received?). Receptionist records or some other archive needs to be compared every week against direct service providers' timesheets to make sure that the forms are complete.

However, do not assume that timesheets must match payroll records. Some research has found that highly paid, salaried professionals occasionally spend less time in treatment activities than they are paid for, while staff on the low end of the pay scale sometimes work many more hours than they are paid for (Yates et al. 1979).

The individual responsible for combining the data from all personnel into a monthly spreadsheet or data base would do well to combine the data weekly. Missing data could then be sought before it is forgotten. The weekly spreadsheets could be combined into the monthly report without entailing additional work.

Motivate Providers

One way to motivate providers to submit cost information forms on time is to make pay contingent on accurate record completion by the deadline. The program administrator must be willing and able to deny pay if records are not submitted for work; otherwise, the contingency will rapidly lose its effectiveness. Another method of encouraging prompt submission of time records is to insist politely that records be completed before the provider leaves for the day and to reward staff who have the highest completion rates.

Monitor Completeness and Accuracy

Whoever is in charge of cost data collection could develop tables and graphs to monitor form completion by providers. These could be used to give providers weekly feedback, encouragement, and rewards for record submission.

Two factors could be charted: the percentage of patients for whom the counselor submitted cost forms on time and the percentage of patients for whom the counselor submitted forms that were later judged valid by comparing sessions recorded in clinical notes to sessions recorded on forms.

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