Physician impact on the total cost of care

Background and Objectives Physicians' efforts at cost containment focus on decreased resource utiliza tion and reduced length of stay. Although these efforts appear to be approp riate. little data exist to gauge their success. As such, the goat of this study is to determine trauma service cost allocations and how this informat ion can help physicians to contain costs. Materials and Methods The authors analyzed the costs for 696 trauma admissions at a level I traum a center for fiscal year 1997. Data were obtained from the hospital costing system. Costs analyzed were variable direct, fixed direct, and indirect co sts. Together, the fixed and indirect costs are referred to as "hospital ov erhead." Total Cost equals variable direct plus fixed direct plus indirect costs. Results The mean variable, fixed. and indirect costs per patient were $7,998, $3,53 4, and $11,086, respectively. Mean total cost per patient was $22,618. Conclusion The 35% variable direct cost represents the percentage of total cost that i s typically under the immediate influence of physicians, in contrast to the 65% of total cost over which physicians have little control. Physicians mu st gain a better understanding of cost drivers and must participate in the operations and allocations of institutional fixed direct and indirect costs a the overall cost of care is to be reduced.