Economic assessment of the general thoracic surgery outpatient service

One aspect of the definition of institutional value for any program is based on the return on investment (ROI) for that program. Program requests for future resource allocations depend, in part, on that information. The purpose of this project was to determine the ROI for initial outpatient visits only for our General Thoracic Surgery (GTS) program.

The number of GTS outpatient visits, studies, and requested consultations ordered by GTS surgeons only was determined after review of the hospital database and office records for the calendar year 2003. Only charges associated with the initial outpatient visits (no inpatient or physician charges) were included. Charges were based on hospital finance department data. The ROI for GTS outpatient services was calculated using total hospital costs and hospital collections.

There were 689 initial outpatient GTS visits. The majority were for lung cancer (48%), benign lung diseases (21%), and esophageal diseases (14%). Total outpatient charges were 1.25M dollars and by disease process were lung cancer (644,000 dollars), benign lung disease (90,000 dollars), esophageal disease (159,000 dollars), and other (357,000 dollars). The most significant hospital charges were the following: radiology (850,000 dollars), laboratory studies (82,000 dollars), gastrointestinal medicine studies (59,000 dollars), and cardiology (42,000 dollars). Total operational costs for the GTS clinic were 415,000 dollars and hospital collections were 513,000 dollars, yielding an ROI of 98,000 dollars or an operating margin of 19%.

An operating margin of 19% for GTS outpatient services is better than most Fortune 500 companies. Acquisition of this type of information by GTS surgeons may be helpful for future program development and institutional resource allocation.