Ann Thorac Surg 2006;82:1072
© 2006 The Society of Thoracic Surgeons
Original article: General thoracic
Invited commentary
Richard Freeman, MD
Division of Thoracic and Cardiovascular Surgery, St. Vincent Hospital and Health System, 8433 Harcourt Rd, Indianapolis, IN 46260
(Email: rfreeman{at}corvascmds.com).
Assessing medical treatment entities using the standard techniques of business analysis often reveals several complexities inherent to the health care system in the United States. These include obstacles such as the dichotomy between charges and revenue, the variations in revenue resulting from payer mix, the common inability of organizations to identify the true costs or overhead of a health care service they provide, and the influence an organization's tax status has on its bottom line. Although the investigation reported by Jones and colleagues [1] suffers from some of these complexities, it also represents a thorough, balanced effort to quantify the monetary value of the general thoracic surgery outpatient service at an academic medical center. By comparing their clinic's assigned organizational costs to a standardized, admittedly conservative, estimate of revenue, they identified the return on investment, otherwise known as operating margin, for their outpatient practice.
As Jones and colleagues [1] point out, the resources of medical centers are limited and will likely be even more constrained in the future. The ability to compete for funding within these organizations will increasingly depend on one's ability not only to demonstrate alignment with the organization's mission but also financial solvency. Although inpatient general thoracic surgery services have been recognized as an excellent source of revenue for hospitals, this review also points out the financial viability of the outpatient component [2]. In addition to identifying their outpatient facility as a profit center for their organization, Jones and colleagues also recognized an important source of internal referrals for other outpatient practices, including imaging and laboratory services. Armed with this information, the authors were able to negotiate practice pattern changes from other departments that improved the efficiency of the general thoracic surgery clinic and likely resulted in higher patient satisfaction.
As the resources of private hospitals and academic medical centers diminish, an increasing number of clinicians are forced to deal with the business side of medicine. Physicians' reactions are as varied as their successes. Some have chosen not to participate in the process at all, others have engaged professional consultants, and some of us have returned to the classroom to gain an understanding of the business of health care in an attempt to level the playing field. Jones and colleagues have provided all of us with a model for outpatient practice analysis and, depending on the results, an opportunity for practice improvement.
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References
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- Jones DR, Vaughters ABR, Smith PW, Daniel TM, Shen KR, Heinzmann JL. Economic assessment of the general thoracic surgery outpatient service Ann Thorac Surg 2006;82:1068-1072.[Abstract/Free Full Text]
- Cardiovascular Roundtable Presentation Health Care Advisory Board. Washington, DC: The Advisory Board Company; 2004October.
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