Hospital profitability per hour of operating room time can vary among surgeons

The operating margins (i.e., profits) of hospitals are decreasing. An impor tant aspect of a hospital's finances is the profitability of individual sur gical cases, which is measured by contribution margin. We sought to determi ne the extent to which contribution margin per hour of operating room (OR) time can vary among surgeons. We retrospectively analyzed 2848 elective cas es performed by 94 surgeons at the Stanford University School of Medicine. For each case, we subtracted variable costs from the total payment to the h ospital to compute contribution margin. We found moderate variability in co ntribution margin per hour of OR time among surgeons, relative to the varia bility in contribution margins per OR hour among each surgeon's cases (Cohe n's f equaled 0.29, 95% lower confidence interval bound 0.27). Contribution margin per OR hour was negative for 26% of the cases. These results have i mplications for hospitals for which OR utilization is extensive, and for wh ich elective cases are only scheduled if they can be completed during regul arly scheduled hours. To increase or achieve profitability, managers need t o increase the hours of lucrative cases, rather than encourage surgeons to do more and more cases. Whether the variability in contribution margin amon g surgeons should be used to more optimally (profitably) allocate OR time d epends on the scheduling objectives of the surgical suite.