Economics of microsurgical cases and routine cases in a medical center

This report describes the economic impact of microsurgical cases and routin e plastic surgery cases in our medical center. The study is based on a fina ncial analysis of the practices of two surgeons. Financial data of patient encounters (admission to the hospital or a surgical unit) identified with e ach surgeon were categorized into microsurgical and related cases and routi ne cases (including cosmetic procedures and general hand cases). Revenues, costs, and profits were tabulated. Data were analyzed for 2 fiscal years (1 994-95 and 1995-96). Analysis of the first fiscal year showed that microsur gery encounters (n = 188) generated $4.4 million in revenue with a profit m argin after dir-ect costs of $2.5 million (57 percent) and a net profit, af ter indirect costs, of $1 million (23 percent). Routine encounters (n = 262 ) generated $1.7 million with a net loss of -$145,000 after direct and indi rect costs. In the second fiscal year, microsurgery encounters (n = 230) ha d income of $4.7 million, a profit over direct costs of $2.5 million (53 pe rcent), and a net profit after, indirect costs of $0.9 million (19 percent) . Routine cases (n = 202) in the same period earned $1.3 million with a net loss of -$107,000. This analysis formulates a comprehensive definition of microsurgical practice and shows that cases within this definition generate d dramatically higher hospital incomes and profits compared with routine pl astic surgical practice. In the circumstances of our medical center, develo pment of this subspecialty is fiscally justifiable.