Simultaneous Versus Staged Bilateral Total Hip Arthroplasty: A Matched Cohort Analysis of Revenue and Contribution Margin.

BACKGROUND: Though previous studies have demonstrated improved cost benefits associated with simultaneous versus staged bilateral total hip arthroplasty (simBTHA and staBTHA), further investigation is needed regarding the revenues and contribution margins (CMs) of these procedures. In this study, we compared revenue, CM, and surgical outcomes between simBTHA and staBTHA. METHODS: All patients who underwent simBTHA (both procedures completed the same day) and staBTHA (procedures completed on different days within one year) between 2011 and 2021 at a single high-volume orthopedic specialty hospital were identified. Of the 1,517 identified patients (n = 139 simBTHA, n = 1,378 staBTHA), 232 were included in a 1:1 propensity match based on baseline demographics (116 per cohort). Revenue, costs, CM, and surgical outcomes were compared between cohorts. RESULTS: Compared to staBTHA, simBTHA procedures had significantly lower total costs (P < .001), direct costs (P < .001), and patient revenue. There was no significant difference in CM between groups (P = .361). Additionally, there were no significant differences in length of stay (P = .173), operative time (P = .438), 90-day readmissions (P = .701), 90-day revisions (P = .313), or all-cause revisions (P = .701) between cohorts. CONCLUSIONS: Though simBTHA procedures have lower revenues than staBTHA, they also have lower costs, resulting in similar CM between procedures. As both procedures have similar postoperative complication rates, further research is required to evaluate specifically which patients may benefit from simBTHA versus staBTHA regarding clinical and patient-reported outcomes. LEVEL OF EVIDENCE: III.

The Financial Feasibility of Bilateral Total Knee Arthroplasty: A Matched Cohort Analyses of Revenue and Contribution Margin Between Simultaneous and Staged Procedures.

BACKGROUND: Financial analyses of simultaneous bilateral total knee arthroplasty versus staged bilateral total knee arthroplasty (simBTKA and staBTKA, respectively) have shown improved cost-effectiveness of simBTKA, though revenue and contribution margin (CM) for these procedures have not been investigated. Our analyses compared surgical outcomes, revenues, and CMs between simBTKA and staBTKA. METHODS: We retrospectively reviewed all patients who underwent simBTKA (both procedures done on the same day) and staBTKA (procedures done on a different day within one year) between 2012 and 2021. Patients were 1:1 propensity matched based on baseline characteristics. Surgical outcomes, as well as revenue, cost, and CM of the inpatient episode were compared between groups. Of the 2,357 patients evaluated (n = 595 simBTKA, n = 1,762 staBTKA), 410 were included in final matched analyses (205 per group). RESULTS: Total (P < .001) and direct (P < .001) costs were significantly lower for simBTKA procedures compared to overall costs of both staBTKA procedures. Significantly lower revenue for simBTKA procedures (P < .001), resulted in comparable CM between groups (P = .477). Postoperative complications including 90-day readmission (P = 1.000), 90-day revision (P = 1.000) and all-cause revision at latest follow-up (P = .083) were similar between groups. CONCLUSIONS: In our propensity-matched cohort, lower costs for simBTKA compared to staBTKA were matched by lower revenues, with a resulting similar CM between procedures. Given that postoperative complication rates were similar, both procedures had comparable cost-effectiveness. Future research is needed to identify patients for whom simBTKA may represent a better surgical intervention compared to staBTKA with respect to clinical and patient reported outcomes.

The Financial Burden of Patient Comorbidities on Total Hip Arthroplasties-A Matched Cohort Analysis of High Comorbidity Burden and Non-High Comorbidity Burden Patients.

BACKGROUND: The impact of increased patient comorbidities on the cost-effectiveness of total hip arthroplasty (THAs) is lacking. This study aimed to compare revenue, costs, and short-term (90 days) surgical outcomes between patients who have and do not have a high comorbidity burden (HCB). METHODS: We retrospectively reviewed 14,949 patients who underwent an elective, unilateral THA between 2012 and 2021. Patients were stratified into HCB (Charlson Comorbidity Index ≥ 5 and American Society of Anesthesiology scores of 3 or 4) and non-HCB groups, and were further 1:1 propensity matched based on baseline characteristics. Perioperative data, revenue, costs, and contribution margins (CMs) of the inpatient episode were compared between groups. Also, 90-day readmissions and revisions were compared between groups. Of the 11,717 patients who had available financial data (n = 1,017 HCB, n = 10,700 non-HCB), 1,914 patients were included in the final matched analyses (957 per group). RESULTS: Total (P < .001) and direct (P < .001) costs were significantly higher for HCB patients. Comparable revenue between cohorts (P = .083) resulted in a significantly decreased CM in the HCB patient group (P < .001). The HCB patients were less likely to be discharged home (P < .001) and had significantly higher 90-day readmission rates (P = .049). CONCLUSIONS: Increased THA costs for HCB patients were not matched by increased revenue, resulting in decreased CM. Higher rates of nonhome discharge and readmissions in the HCB population add to the additional financial burden. Adjustments to the current reimbursement models should better account for the increased financial burden of HCB patients undergoing THA and ensure access to care for all patient populations. LEVEL OF EVIDENCE: III.

The Bottom Line: Trauma Center Viability During COVID-19.

INTRODUCTION: The COVID-19 pandemic was a potential threat to the viability of trauma centers and health systems in general. We sought to answer the question of how COVID-19 was associated with patient characteristics as well as trauma center volume, finances, and viability. METHODS: We reviewed 6375 patients admitted to our verified Level 1 trauma center during two time periods: pre-COVID (February 2019-February 2020) and COVID (March 2020-March 2021). Three thousand ninety-nine patients were admitted pre-COVID and 3276 were admitted during COVID. Data including case-mix index (CMI), total contribution margin, insurance status, age, race, gender, ethnicity, and injury mechanism were collected from the trauma registry and finance databases and analyzed. A P < 0.05 was considered significant. RESULTS: Trauma admissions decreased initially during COVID but returned to and ultimately surpassed admission trends pre-COVID. Trauma revenue and patient acuity increased significantly along with a decrease in the number of underinsured patients during COVID. When evaluating all service lines, the trauma center was the highest contributor to overall hospital revenue. CONCLUSIONS: Despite a decrease in admissions for other service lines and a pause in elective surgeries during the pandemic, the trauma center remained unaffected. In addition, trauma was the most significant contributor to the bottom line of the health system. These findings underscore the need to maintain and even increase trauma center resources and staffing to ensure that optimal care is provided to critically ill and injured patients.

Trends in Revenue and Cost for Revision Total Knee Arthroplasty.

BACKGROUND: Over the past decade, reimbursement models and target payments have been modified in an effort to decrease costs of revision total knee arthroplasty (rTKA) while maintaining the quality of care. The goal of this study was to investigate trends in revenue and costs associated with rTKA. METHODS: We retrospectively reviewed all patients who underwent rTKA between 2011 and 2021 at our institution. Patients were stratified into groups based on insurance coverage: Medicare, government-managed or Medicaid (GMM), or commercial insurance. Patient demographics were collected, as well as revenue, costs, and contribution margin (CM) of the inpatient episode. Changes over time as a percentage of 2011 numbers were analyzed. Linear regressions were used to determine trend significance. In the 10-year study period, 1,698 patients were identified with complete financial data. RESULTS: Overall total cost has increased significantly (P < .01). While revenues and CM for Medicare and Commercial patients remained steady between 2011 and 2021, CM for GMM patients decreased significantly (P = .01) to a low of 53.2% of the 2011 values. Since 2018, overall CM and revenues decreased significantly (P = .05, P = .01, respectively). CONCLUSION: While from 2011 to 2018 general revenues and CM were relatively steady, since 2018 they have decreased significantly to their lowest values in over a decade for GMM and commercial patients. This trend is concerning and may potentially lead to decreased access to care. Re-evaluation of reimbursement models for rTKA may be necessary to ensure the financial viability of this procedure and prevent issues with access to care. LEVEL OF EVIDENCE: III.

Trends in Revision Total Hip Arthroplasty Cost, Revenue, and Contribution Margin 2011 to 2021.

BACKGROUND: Revision total hip arthroplasty (rTHA) is a costly procedure, and its prevalence has been steadily increasing over time. This study aimed to examine trends in hospital cost, revenue, and contribution margin (CM) in patients undergoing rTHA. METHODS: We retrospectively reviewed all patients who underwent rTHA from June 2011 to May 2021 at our institution. Patients were stratified into groups based on insurance coverage: Medicare, government-managed Medicaid, or commercial insurance. Patient demographics, revenue (any payment the hospital received), direct cost (any cost associated with the surgery and hospitalization), total cost (the sum of direct and indirect costs), and CM (the difference between revenue and direct cost) were collected. Changes over time as a percentage of 2011 numbers were analyzed. Linear regression analyses were used to determine the overall trend's significance. Of the 1,613 patients identified, 661 were covered by Medicare, 449 by government-managed Medicaid, and 503 by commercial insurance plans. RESULTS: Medicare patients exhibited a significant upward trend in revenue (P < .001), total cost (P = .004), direct cost (P < .001), and an overall downward trend in CM (P = .037), with CM for these patients falling to 72.1% of 2011 values by 2021. CONCLUSION: In the Medicare population, reimbursement for rTHA has not matched increases in cost, leading to considerable reductions in CM. These trends affect the ability of hospitals to cover indirect costs, threatening access to care for patients who require this necessary procedure. Reimbursement models for rTHA should be reconsidered to ensure the financial feasibility of these procedures for all patient populations.

Hospital Revenue, Cost, and Contribution Margin in Inpatient Versus Outpatient Primary Total Joint Arthroplasty.

BACKGROUND: Removal of primary total knee arthroplasty (TKA) and primary total hip arthroplasty (THA) from the inpatient-only list has financial implications for both patients and institutions. The aim of this study was to evaluate and compare financial parameters between patients designated for inpatient versus outpatient total joint arthroplasty. METHODS: We reviewed all patients who underwent TKA or THA after these procedures were removed from the inpatient-only list. Patients were statistical significance into cohorts based on inpatient or outpatient status, procedure type, and insurance type. This included 5,284 patients, of which 4,279 were designated inpatient while 1,005 were designated outpatient. Patient demographic, perioperative, and financial data including per patient revenues, total and direct costs, and contribution margins (CMs) were collected. Data were compared using t-tests and Chi-squared tests. RESULTS: Among Medicare patients receiving THA, CM was 89.1% lower for the inpatient cohort when compared to outpatient (P < .001), although there was no statistical significance difference between cohorts for TKA (P = .501). Among patients covered by Medicaid or Government-managed plans, CM was 120.8% higher for inpatients receiving THA (P < .001) when compared to outpatients and 136.3% higher for inpatients receiving TKA (P < .001). CONCLUSION: Our analyses showed that recent costs associated with inpatient stay inconsistently match or outpace additional revenue, causing CM to vary drastically depending on insurance and procedure type. For Medicare patients receiving THA, inpatient surgery is financially disincentivized leaving this vulnerable patient population at a risk of losing access to care. LEVEL III EVIDENCE: Retrospective Cohort Study.

Trends in Revenue, Cost, and Contribution Margin for Total Joint Arthroplasty 2011-2021.

BACKGROUND: Regulatory change has created a growing demand to decrease the hospital costs associated with primary total joint arthroplasty (TJA). Concurrently, the removal of lower extremity TJA from the in-patient only list has affected hospital reimbursement. The purpose of this study is to investigate trends in hospital revenue versus costs in primary TJA. METHODS: We retrospectively reviewed all patients who underwent primary TJA from June 2011 to May 2021 at our institution. Patient demographics, revenue, total cost, direct cost, and contribution margin were collected. Changes over time as a percentage of 2011 numbers were analyzed. Linear regression analysis was used to determine overall trend significance and develop projection models. RESULTS: Total knee arthroplasty (TKA) insured by government-managed/Medicaid (GMM) plans showed a significant upward trend (P = .013) in total costs. Direct costs of TKA across all insurance providers (P = .001 and P < .001) and total hip arthroplasty (THA) for Medicare (P = .009) and GMM (P = .001) plans demonstrated significant upward trends. Despite this, 2011-2021 modeling found no significant change in contribution margin for TKA and THA covered under all insurance plans. However, models based on 2018-2021 financial data demonstrated a significant downward trend in contribution margin across Medicare (P < .001) and GMM (P < .001) insurers for both TKA and THA. CONCLUSION: Physician-led innovation in cost-saving strategies has maintained contribution margin over the past decade. However, the increase in direct costs seen over the past few years could lead to negative contribution margins over time, if further efficiency and cost-saving measures are not developed. LEVEL III EVIDENCE: Retrospective Cohort Study.

Fenestrated endovascular aneurysm repair is financially viable at a high-volume medical center with positive hospital contribution margins and physician payment.

OBJECTIVE: To examine hospital finances and physician payment associated with fenestrated endovascular aneurysm repair (FEVAR) for complex aortic disease at a high-volume center and to compare the costs and reimbursements for FEVAR with open repair, and their trends over time. METHODS: Clinical and financial data were collected retrospectively from electronic medical and administrative records. Data for each patient included inpatient and outpatient encounters 3 months before and 12 months after the primary aneurysm operation. RESULTS: Between 2007 and 2017, 157 and 71 patients were treated with physician-modified endograft (PMEG) and Cook Zenith Fenestrated (ZFEN) repair, respectively. Twenty-one patients who were evaluated for FEVAR underwent open repair instead. The 228 FEVAR patients provided a total positive contribution margin (reimbursements minus direct costs) of $2.65 million. The index encounter (the primary aneurysm operation and hospitalization) accounted for the majority (90.6%) of the total contribution margin. The largest component (50.3%) of direct cost for FEVAR from the index encounter was implant/graft expenses. The average direct costs for FEVAR and for open repair from the index encounter were $34,688 and $35,020, respectively. The average contribution margins for FEVAR and for open repair were approximately $10,548 and $21,349, respectively, attributable to differences in reimbursement. The average direct cost for FEVAR trended down over time as cumulative experience increased. Average reimbursement for FEVAR increased after Centers for Medicare and Medicaid Services approved payments with the Investigational Device Exemption (IDE) trial for PMEG in 2011, and a new technology add-on payment for ZFEN in 2012. These factors transitioned the average contribution margin from negative to positive in 2012. The average physician payments for PMEG increased from $128 to $5848 after the start of the IDE trial. The average physician payments for ZFEN and for open repair between 2011 and 2017 were $7597 and $7781, respectively. CONCLUSIONS: FEVAR can be performed at a high-volume medical center with positive contribution margins and with comparable physician payments to open repair. At this institution, hospital reimbursement and physician payments improved for PMEG with participation in an IDE trial, while hospital direct costs decreased for both PMEG and ZFEN with accumulated experience.

Impact of a care delivery redesign initiative for vascular surgery.

OBJECTIVE: A hospital-wide quality improvement process through a care delivery redesign (CDR) was initiated to improve patient care efficiency, clinical documentation, and length of stay (LOS). The impact of CDR was assessed through LOS, unplanned readmission rates, and hospital financial metrics. METHODS: The CDR team consisted of the Chief of Vascular Surgery, inpatient nurse practitioner, dedicated case manager, clinical documentation improvement specialist, and vascular surgery residents and faculty. The nurse practitioner facilitated patient care coordination, resident system-based education, and multidisciplinary collaboration. Tools created to track performance and to ensure sustainability included daily discussions of patient care barriers and solutions; standardized order sets; a mobile app for residents containing resident service expectations, disease-specific resources, and vascular surgery journal links; and a weekly inpatient tracker showing real-time patient care data. Outcome measures included LOS, case mix index, contribution margin, and unplanned readmissions. Each outcome was determined for all inpatient admissions the year before and the 12 months after CDR was initiated. Outcomes were compared between the two groups. RESULTS: Implementation of CDR resulted in a 23% decrease in LOS (P = .003), reducing the gap to the Centers for Medicare and Medicaid Services geometric mean LOS from 2.1 days to 0.5 day (P < .001). Clinical documentation resulted in an increase in case mix index of 10% (P = .011). The 30-day unplanned readmission rates did not change in the 12 months after CDR was initiated compared with the year before (P = .92). Financial data demonstrated decreased variable cost and increased revenue resulting in a $1.89 million increase in contribution margin. CONCLUSIONS: A CDR predicated on a dedicated service line advanced practitioner, clinical documentation education, weekly service tracker review, and real-time management of system-related barriers to patient care is described. Implementation of the CDR reduced hospital LOS with no change in unplanned readmissions and provided significant financial benefit to the hospital by increasing revenue and decreasing variable cost.

The financial value of vascular surgeons as operative consultants to other surgical specialties.

OBJECTIVE: Vascular surgeons provide assistance to other surgical specialties through planned and unplanned joint operative cases. The financial impact to the hospital of vascular surgeons as consultants in this context has yet to be quantified. We sought to quantify the financial value of services provided by consulting vascular surgeons in the performance of joint operative procedures, both planned and unplanned. METHODS: Hospital financial data were reviewed for all inpatient operative cases during a 3-year period (2013-2015). Cases in which a vascular surgeon provided operative assistance as a consultant to a nonvascular surgeon were identified and designated planned or unplanned. Contribution margin, defined as hospital revenue minus variable cost, was determined for each case. In addition, the contribution margin ratio (contribution margin divided by revenue) was determined for each cohort. Financial data for consulting cases was compared with all nonconsult cases. Data analysis was performed with nonparametric statistics. RESULTS: There were 208 cases with a primary nonvascular surgeon that required a vascular co-surgeon during the study period, 169 planned and 39 unplanned. For comparison, 19,594 nonconsult cases of other surgical specialties were identified. The median contribution margin was higher for vascular surgery consult cases compared with nonconsult cases ($14,406 [interquartile range, $63,192] vs $5491 [interquartile range $28,590]; P = .002). The overall contribution margin ratio was higher for vascular surgery consult cases (0.41) compared with control nonconsult cases (0.35). There was no difference in contribution margin and contribution margin ratio between planned and unplanned vascular surgery consult cases. CONCLUSIONS: Vascular surgeons provide essential operative assistance to other surgical specialties. This operative assistance is frequent and provides significant financial value, with high contribution margin and contribution margin ratio. Vascular surgeons, as consulting surgeons, enable the completion of highly complex cases and in this capacity provide significant financial value to the hospital.

Effect of patient's age on the profitability of inpatient cardiac catheterization: a contribution margin analysis of frequently performed procedures over a 5-year period.

BACKGROUND: Due to a continuing age shift in the German society hospital providers are concerned about the additional costs associated with the treatment of elderly patients. It is not clear if cardiac catheterization in aged patients leads to higher resource utilization and if DRG-revenues do compensate for this factor. METHODS: Procedure-related and administrative data of all patients who underwent cardiac catheterization at a tertiary heart center between 2007 and 2011 were collected and analyzed. Then a profitability analysis was performed by comparing the case related variable costs with the Diagnosis-related group (DRG) per case revenues. A particular emphasis was placed on a comparative analysis of identical clusters of procedures. RESULTS: The most frequently performed catheterization procedure (n = 1800) was associated with significantly higher material expenditure in very old patients (178 ± 48 €) than in old (171 ± 28; p = 0.001) and young patients (172 ± 39; p = 0.046). Furthermore, radiation time and the length of hospital stay were increased in very old patients (3.5 ± 3.8 min and 6.2 ± 4.8 days) compared to old (2.7 ± 2.8 min and 4.6 ± 3.8 days; p < 0.001) and young patients (2.5 ± 2.5 min and 4.5 ± 3.9 days; p < 0.001). Due to higher DRG revenues very old patients achieved higher absolute contribution margins (2065 ± 1033 €) than old (1804 ± 1902 €; p < 0.001) and young patients (1771 ± 902 €; p < 0.001). However, the contribution margins per day were significantly smaller (440 ± 226 €) than those in old (488 ± 234 €; p = 0.001) and young patients (484 ± 206 €; p = 0.001). CONCLUSIONS: Catheterization of very old patients is related to lower contribution margins per day despite higher material and time expenditures. Since efforts to reduce the length of hospital stay of these patients are limited, this may result in a competitive disadvantage of hospitals which are more affected by the demographic change.

What Incentives Are Created by Medicare Payments for Total Hip Arthroplasty?

BACKGROUND: Differences in profitability and contribution margin (CM) between various patient populations may make certain patients particularly attractive (or unattractive) to providers. This study seeks to identify patient characteristics associated with increased profit and CM among Medicare patients undergoing total hip arthroplasty (THA). METHODS: The expected Medicare reimbursement for consecutive patients of Medicare-eligible age (65+ years) undergoing primary unilateral elective THA (n = 498) was calculated in accordance with Center for Medicare and Medicaid Services policy. Costs were derived from the hospital's cost accounting system. Profit and CM were calculated for each patient as reimbursement less total and variable costs, respectively. Patients were compared based on clinical and demographic factors by univariate and multivariate analyses. RESULTS: Medicare patients undergoing THA generated negative average profits but substantial positive CMs. Lower profit and CM were associated with higher American Society of Anesthesiologists Physical Status Classification (P < .01, P = .03), older age (P < .01), and longer length of stay (P < .01, P = .03). No association was found with gender, body mass index, or race. CONCLUSION: If our results are generalizable, Medicare patients requiring THA are currently financially attractive, but institutions have a long-term incentive to shift resources to more profitable patients and service lines, which may eventually restrict access to care for this population. THA providers have a financial incentive to favor Medicare patients with younger age, lower American Society of Anesthesiologists Physical Status Classification, and those who can be expected to require relatively short admissions. The Center for Medicare and Medicaid Services must strive to accurately match reimbursement rates to provider costs to avoid inequitable payments to providers and financial incentives discouraging treatment of high-risk patients or other patient subpopulations.

Lack of Surgeon Standardization on Implant Selection in Ankle Fracture Fixation May Increase Costs and Decrease Contribution Margin.

BACKGROUND: Surgical standardization has been shown to decrease costs without impacting quality; however, there is limited literature on this subject regarding ankle fracture fixation. Methods. Between October 5, 2015 and September 27, 2017, a total of 168 patients with isolated ankle fractures who underwent open reduction, internal fixation (ORIF) were analyzed. Financial data were analyzed across ankle fracture classification type, implant characteristics, and surgeons. Bivariate analyses were conducted. One-way analysis of variance was used to compare hardware costs across all 5 surgeons. Linear regression analysis was used to determine if hardware cost differed by surgeon when accounting for fracture type. RESULTS: The mean contribution margin was $4853 (SD $6446). There was a significant difference in implant costs by surgeon (range, lowest-cost surgeon: $471 [SD $283] to $1609 [SD $819]; P < .001). There was no difference in the use of a suture button or locking plate by fracture type (P = .13); however, the cost of the implant was significantly higher if a suture button or locking plate was used ($1014 [SD $666] vs $338 [SD $176]; P < .001). There was an association between surgeon 3 (ß = 200.32 [95% CI 6.18-394.47]; P = .043) and surgeon 4 (ß = 1131.07 [95% CI 906.84-1355.30]; P < .001) and higher hardware costs. CONCLUSIONS: Even for the same ankle fracture type, a wide variation in implant costs exists. The lack of standardization among surgeons accounted for a nearly 3.5-fold difference, on average, between the lowest- and highest-cost surgeons, negatively affecting contribution margin. LEVELS OF EVIDENCE: Level IV.

Optimal Use of Advanced Practice Providers at an Academic Medical Center: A First-Year Retrospective Review.

Background Physician assistants/associates (PAs) and nurse practitioners (NPs), together known as advanced practice providers (APPs), practice with a high degree of clinical autonomy and professional respect, and play a critical role in team-based care. Aligning APP care delivery models to promote top-of-license practice is essential to improving ambulatory capacity and bottom-line expectations at academic medical centers (AMCs) in the 21st century and beyond. This administrative quality improvement study assesses the downstream impact of restructuring our APP care models to promote independent practice sessions. Methods Our AMC formed an APP oversight committee in April 2021 to optimize the ambulatory care model, realign APP funds flow, and set performance standards to which PAs and NPs are being held accountable. We conducted a one-year retrospective review of internal data from July 2021 to June 30, 2022. Certified registered nurse anesthetists (CRNAs) were excluded from this analysis. Results  APP productivity year-over-year (YOY) aggregate data across all School of Medicine (SOM) departments, demonstrated a 53% increase in work relative value units (wRVUs), 84% increase in payments, and 79% increase in charges from the prior fiscal year (July to June). Regarding APP ambulatory clinical effort (YOY), there was a 45% increase in the number of APP completed visits (92% return patient visits, 8% new visits). An increase in APP productivity did not adversely impact patient satisfaction, physician-generated wRVUs, or delay programmatic expansion efforts. Lastly, in a recent engagement survey, the majority of PA and NP respondents (78%) reported working either "most of the time" or "always" at the top-of-license. Conclusion This quality improvement study demonstrates that enhancement of PA and NP utilization through top-of-license initiatives can be achieved without jeopardizing physician wRVUs or performance. While we acknowledge, there are differences between healthcare institutions in terms of care delivery and compensation models, organizational culture, and distribution of clinical resources, there remains an opportunity among hospitals and health systems to optimize this critical and essential APP workforce.

Physician Compensation in the United States - Through the Lens of the MS Neurologist.

PURPOSE OF REVIEW: To explore the elements that are typically considered when determining physician compensation in the United States and to examine if the compensation of neurologists with expertise in multiple sclerosis (MS) care is commensurate with that for other neurological specialists and medical specialists that also employ complex therapies, e.g., oncology. RECENT FINDINGS: The complexity in the diagnosis and management of MS requires increasing specialization. Additionally, changing models for the delivery of MS care has resulted in the MS neurologist generating significant contribution margins. In fact, the revenue to compensation ratio for the MS neurologist may be significantly higher than that of any other discipline in neuroscience service lines. However, while the contribution margin is often a key justification of compensation of interventional and intensive care practitioners in neuroscience service lines, it is generally not considered in the MS neurologist's compensation. Compensation models for MS neurologists typically depend heavily on the absolute number of relative value units associated with evaluation and management (E&M) codes making other fields of neurology financially more attractive to trainees. SUMMARY: In considering the shortage of MS specialists, the demands of their discipline, and the revenue to compensation ratios, the MS neurologist is significantly undercompensated relative to other neurological specialists and to physicians in other disciplines. Compensating the MS neurologist appropriately and supporting the necessary infrastructure for MS care will likely attract more trainees to this discipline and help reverse the current scarcity of MS neurologists in the United States.

Making better decisions by applying mathematical optimization to cost accounting: An advanced approach to multi-level contribution margin accounting.

The purpose of multi-level contribution margin accounting in cost accounting is to analyze the profitability of products and organizational entities with appropriate allocation of fixed costs and to provide relevant information for short-term, medium- and longer-term decisions. However, the conventional framework of multi-level contribution margin accounting does not usually incorporate a mathematical optimization method that simultaneously integrates variable and fixed costs to determine the best possible product mix within hierarchically structured organizations. This may be surprising in that operations research provides an optimization model in the form of the fixed-charge problem (FCP) that takes into account not only variable costs but also fixed costs of the activities to be planned. This paper links the two approaches by expanding the FCP to a multi-level fixed-charge problem (MLFCP), which maps the hierarchical decomposition of fixed costs in accordance with multi-level contribution margin accounting. In this way, previously hidden optimization potentials can be made visible within the framework of multi-level contribution margin accounting. Applying the linkage to a case study illustrates that the original assessment of profitability gained on the sole basis of a multi-level contribution margin calculation might turn out to be inappropriate or even inverted as soon as mathematical optimization is utilized: products, divisions, and other reference objects for fixed cost allocation, which at first glance seem to be profitable (or unprofitable) might be revealed as actually unprofitable (or profitable), when the multi-level contribution margin calculation is linked to the MLFCP. Furthermore, the proposed concept facilitates assessment of the costs of an increasing variant diversity, which also demonstrates that common rules on how to interpret a multi-level contribution margin calculation may have to be revised in some cases from the viewpoint of optimization. Finally, the impact of changes in the fixed cost structure and other parameters is tested via sensitivity analyses and stochastic optimization.

Financial impact of adapting robotics to a thoracic practice in an academic institution.

BACKGROUND: In the current healthcare environment there is increasing pressure to deliver high quality care to more people at less cost. Robotic assisted thoracic surgical procedures (RATS) have been shown by some to be more expensive than conventional endoscopic or open surgery. We initiated this study to assess the financial impact of RATS compared to robotic non-thoracic surgery in an academic institution. METHODS: A retrospective study was performed for all patients who underwent any robotically assisted surgical procedure at Temple University Hospital (TUH) in fiscal year 2015. Surgical volume, operative time, length of stay (LOS), case mix index (CMI), direct and indirect costs, hospital charges, surgical charges, contribution margin (CM) and net margin (NM) were collected for the thoracic surgery service in addition to other services which performed more than 20 robotic cases a year. We analyzed the data according to the following strategy: (I) financial performance for both inpatient and outpatient robotic procedures for the entire hospital; (II) compared financial data for robotic and non-robotic surgeries in the thoracic surgery division; (III) compared thoracic surgery data with the STS database for the same time period in order to calculate any potential cost saving (PCS). RESULTS: In FY15, a total of 696 robotic procedures were performed by the various services at TUH with a mean of 58 cases each month. Although CM was highest for cardiovascular surgery, the highest NM was by thoracic surgery. Despite having the highest volume and a positive CM, the mostly outpatient urology service showed a negative NM in FY15. A CMI-adjusted comparison on 208 of the 589 robotic procedures where there was a comparable group of inpatients who had open procedures, the mean direct cost for non-robotic procedures was $6,239, 9% less than for robotic procedures. The mean total cost for non-robotic procedures was only 3.64% ($435) less than that for robotic procedures ($11,502 vs. $11,937). When compared with the UHC expected LOS, the robotic group had a lower LOS while the non-robotic group had a higher LOS. The mean total direct costs were $3,510 less for the robotic procedures ($16,502 vs. $20,012). When compared to similar cases reported to the STS in FY 2015, the length of stay, conversion rate, transfusion rate, post-operative complications and OR time compared favorably. Using calculations based on published data, the potential cost savings are in the 1 to 2 million dollar range compared to traditional endoscopic or open procedures reported to the STS. CONCLUSIONS: High acuity services such as Thoracic Surgery drive higher CM per case as long as variable costs especially LOS are kept low. Procedures with lower CMI may not provide a high enough CM to offset the fixed and variable costs. Robotic surgical cases performed in the outpatient setting may incur significant losses as the reimbursement does not cover the direct costs. Hospitals should preferentially allocate robotic resources to inpatient procedures with higher CMI and work to decrease overall LOS.

Evolution of the Intensive Care Unit Telemedicine Value Proposition.

Advances in clinical information sciences, telecommunication technologies, electronic health records, early warning systems, automated acuity assessment, and clinician communication support systems have allowed current-generation intensive care (ICU) telemedicine systems to address the inefficiencies of the failed advice-upon-request ICU telemedicine model. Value is related to the ability of health care systems to leverage ICU telemedicine resources to provide care. Local financial benefits of ICU telemedicine program implementation depend on changing behavior to better focus on activities that reduce the duration of critical illness and length of stay.

Animal Welfare and Economic Aspects of Using Nurse Sows in Swedish Pig Production.

The number of born piglets per litter has increased in Swedish pig industry, and farmers are struggling to improve piglet survival. A common practice is to make litters more equally sized by moving piglets from large litters to smaller to make sure that all piglets get an own teat to suckle. Litter equalization is not always enough, as many sows have large litters and/or damaged teats, which results in an insufficient number of available teats. One way to solve this problem is to use nurse sows. A nurse sow raises, and weans, her own piglets before receiving a foster litter. The objectives of this study were to address how the use of nurse sows affects the welfare of sows and piglets and to explore how it impacts the contribution margin of pig production in Sweden. A literature search was made to investigate welfare aspects on sows and piglets. As there were few published studies on nurse sows, an expert group meeting was organized. In order to explore the impact on the contribution margin of pig production, a partial budgeting approach with stochastic elements was used for a fictive pig farm. Standard templates for calculating costs and benefits were supplemented with figures from existing literature and the gathered expert opinions. In Sweden, the minimum suckling period is 28 days while published studies involving nurse sows, all from outside of Sweden, weaned the piglets at 21 days. A Swedish nurse sow will thus get longer lactation period which might increase the risk of poor body condition, damaged teats, and shoulder ulcers. This indicates a reduced welfare of the sow and may lead to impaired fertility and increased culling risk. On the other hand, the piglet mortality could be reduced with the use of nurse sows, but the separation and mixing of piglets could be stressful. The partial budgeting suggested that the nurse sow system is slightly more profitable (+6,838 Swedish krona) per farrowing group during one dry and one lactation period compared to the conventional system. The result is, however, highly dependent on the input values, and welfare aspects were not considered in the calculations.