Financial impact of tertiary care in an academic medical center

Objective To analyze the financial impact of three complex vascular surgica l procedures to both an academic hospital and a department of surgery and t o examine the potential impact of decreased reimbursements. Summary Background Data The cost of providing tertiary care has been implic ated as one potential cause of the financial difficulties affecting academi c medical centers. Methods Patients undergoing revascularization for chronic mesenteric ischem ia, elective thoracoabdominal aortic aneurysm repair, and treatment of infe cted aortic grafts at the University of Florida were compared with those un dergoing elective infrarenal aortic reconstruction and carotid endarterecto my. Hospital costs and profit summaries were obtained from the Clinical Res ource Management Office. Departmental costs and profit summary were estimat ed based on the procedural relative value units (RVUs), the average clinica l cast per RVU ($33.12), surgeon charges, and the collection rate for the v ascular surgery division (30.2%) obtained from the Faculty Group Practice. Surgeon work effort was analyzed using the procedural work RVUs and the est imated total care time, The analyses were performed for all payers and the subset of Medicare patients, and the potential impact of a 15% reduction in hospital and physician reimbursement was analyzed. Results Net hospital income was positive for all but one of the tertiary ca re procedures, but net losses were sustained by the hospital for the mesent eric ischemia and infected aortic graft groups among the Medicare patients, in contrast. the estimated reimbursement to the department of surgery for all payers was insufficient to offset the clinical cost of providing the RV Us for all procedures, and the estimated losses were greater for the Medica re patients alone. The surgeon work effort was dramatically higher for the tertiary care procedures, whereas the reimbursement per work effort was low er. A 15% reduction in reimbursement would result in an estimated net loss to the hospital for each of the tertiary care procedures and would exacerba te the estimated losses to the department. Conclusions Caring for complex surgical problems is currently profitable to an academic hospital but is associated with marginal losses for a departme nt of surgery. Economic forces resulting from further decreases in hospital and physician reimbursement may limit access to academic medical centers a nd surgeons for patients with complex surgical problems and may compromise the overall academic mission.