Economics of microsurgical cases and routine cases in a medical center

This report describes the economic impact of microsurgical cases and routine plastic surgery cases in our medical center. The study is based on a financial analysis of the practices of two surgeons. Financial data of patient encounters (admission to the hospital or a surgical unit) identified with each surgeon were categorized into microsurgical and related cases and routine cases (including cosmetic procedures and general hand cases). Revenues, costs, and profits were tabulated. Data were analyzed for 2 fiscal years (1994-95 and 1995-96). Analysis of the first fiscal year showed that microsurgery encounters (n = 188) generated $4.4 million in revenue with a profit margin after direct costs of $2.5 million (57 percent) and a net profit, after 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 indirect costs. In the second fiscal year, microsurgery encounters (n = 230) had income of $4.7 million, a profit over direct costs of $2.5 million (53 percent), 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 generated dramatically higher hospital incomes and profits compared with routine plastic surgical practice. In the circumstances of our medical center, development of this subspecialty is fiscally justifiable.