17. Surgeon Contribution To Hospital Bottom Line: Not All Are Created Equal
Larry R. Kaiser, MD, Andrew S. Resnick, MD*, Diane P. Corrigan, MBA*, James L. Mullen, MD
University of Pennsylvania, Philadelphia, PA
OBJECTIVE: As professional fees continue to decline and the independent practitioner becomes an endangered species an understanding of the surgeon’s importance to the hospital bottom line may be especially useful. An appreciation of surgical contribution to hospital profitability may prove beneficial in negotiations relating to full-time employment or other models. We hypothesized that surgeon productivity is directly related to hospital profitability but significant variation in margin contribution exists among the various specialties.
METHODS: Surgeon total relative value units (RVUs), a measure of productivity, were collected from operating room (OR) logs. Annual hospital profit which reflects all payments received, less all direct and indirect costs, was provided for each specialty by Hospital Finance. Hospital profit or hospital profit per OR hour for each specialty was plotted as a function of total RVUs or RVUs per OR hour.
RESULTS: Thoracic ($577 hospital profit/surgeon RVU), Transplant ($340.64/RVU) and Cardiac ($170.11/RVU) were the most profitable followed closely by GI/Colon Rectal and Vascular. Trauma ($2.26/RVU), Gyn ($8.05/RVU) and Plastics ($9.73/RVU) contributed least to hospital profitability. When hospital profitability per OR hour was calculated by RVU/OR hour Transplant slightly exceeded Thoracic ($3800 vs $3450).
CONCLUSIONS: Surgeons contribute significantly to hospital profitability with certain specialties responsible for greater profits than others. Payer mix, the penetration of managed care and negotiated contracts as well as a number of other factors all have an impact on an individual hospital’s profitability. Surgeons should be aware of their significant influence in the marketplace.