OBJECTIVES: Leveraging time-driven activity-based costing (TDABC), this study aims to (1) quantify the cost of arthroscopic acetabular labral repair or debridement and (2) explore variation in costs based on patient-specific characteristics, operative techniques employed, and surgical settings.

METHODS: Using TDABC, we calculated the cost of care for 890 patients undergoing hip arthroscopy by five surgeons at four surgery centers within a single institution from 2015-2022. Costs were normalized to protect confidentiality. Multivariable linear mixed-effects models were utilized to identify factors underlying variation in costs.

RESULTS: The normalized total cost of arthroscopic acetabular labral repair or debridement ranged from 43.4 to 203.7 (mean ± standard deviation: 100 ± 24.2), with a 1.8-fold variation in costs between patients in the 10^th and 90^th percentile. On average, supply costs accounted for 48.8% of total costs, while labor costs comprised the remaining 51.2%. Higher costs were significantly associated with male gender (3.9-point increase, p<0.001), labral repair relative to debridement (22.4-point increase, p<0.001), and operative year (0.62-point increase per year, p=0.023). Additionally, significant variations in cost were found in relation to osteoplasty type, treatment of cartilage lesions, provider team, and capsular management (p<0.001 for all). Age, body mass index, and American Society of Anesthesiologists score were not independently associated with costs. A mixed-effects model incorporating these factors as fixed effects and the surgeon and surgery center as random effects explained 88.7% of the observed cost variation; 81.7% of this explanatory power was derived from the surgeon and surgery center.

CONCLUSIONS: Variation in the cost of outpatient hip arthroscopy was primarily explained by surgeon and surgery center. Case-specific characteristics were also significantly associated with costs, while patient demographics contributed minimal variability. These insights may support physicians, payers, and other stakeholders to contain costs, implement bundled reimbursement structures, and deliver higher-value care.