Consequences of right siting of endocrinology patients--a financial and caseload simulation

Right siting has been actively advocated to mitigate rising healthcare costs as well as to free up tertiary resources for the provision of care to more complex patients, research and education. There are, however, concerns that in a block budget setting right siting will reduce patient volumes, thus impacting on subsequent funding allocations and also patient revenues. We sought to determine through modelling and simulation the financial and volume impacts of right siting of endocrinology outpatients in a large tertiary hospital in Singapore.

Data were collected prospectively on patient casemix including complexity (complex defined as requiring specialist care), time required for consultations and revenues garnered. The data were used to simulate 2 scenarios: right siting of all simple cases with freed up resources directed to research and teaching (research scenario) and right siting of all simple cases with replacement by complex cases (service scenario).

The department sees an estimated 33,000 outpatients per year with a total annual outpatient revenue of $8.6 million. The research scenario would see a decline in patient volume to 11,880 cases per year which would result in a corresponding decrease in revenue of $5 million and freeing up of 2.8 hours/ week for each staff. The service scenario yields a drop in patient volume of 9500 per annum and a drop in revenue of $1.9 million.

Right siting reduces tertiary care patient volumes and revenues and may discourage right siting efforts. A viable business model for the tertiary institutions is needed to facilitate support for right siting.