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Peripheral occlusive disease may provide the highest hospital margins despite rising costs
Nadia Awad1, Joseph V Lombardi2, Jeffrey P Carpenter2
1Department of Surgery, Albert Einstein Medical Center, Philadelphia, Pa.
Insights
Peripheral occlusive disease (POCD) cases drove growing hospital margins despite rising costs and lower reimbursements. This vascular surgery financial analysis highlights POCD
Area of Science:
- Vascular Surgery
- Health Economics
- Healthcare Management
Background:
- Healthcare systems face financial challenges due to declining reimbursements and increasing operational costs.
- Vascular surgery programs require financial analysis to ensure sustainability.
- Understanding financial trends is crucial for strategic planning in tertiary care settings.
Purpose of the Study:
- To analyze financial trends in vascular surgery services at a tertiary care center.
- To evaluate the financial impact and viability of a vascular surgery program.
- To assess the influence of reimbursement and cost changes on surgical margins.
Main Methods:
- Utilized Current Procedural Terminology (CPT) codes and diagnosis-related groups (DRGs) to categorize vascular procedures.
- Analyzed data for aortic disease, cerebrovascular disease, and peripheral occlusive disease (POCD) from 2010 to 2012.
- Calculated hospital margins using cost accounting data linked to CPT codes, service dates, and admitting physicians.
Main Results:
- All analyzed vascular categories demonstrated volume growth and positive hospital margins.
- Peripheral occlusive disease (POCD) cases showed significant volume growth (35%) and revenue increase (37%), with a 15% margin increase.
- POCD margins surpassed those of aortic and cerebrovascular cases combined by 77%, despite a 54% cost increase.
Conclusions:
- Volume-driven peripheral occlusive disease (POCD) procedures were the sole contributor to increasing hospital margins.
- Sustained financial viability in vascular surgery necessitates a focus on high-volume, profitable service lines like POCD.
- Strategic management is essential to navigate cost increases and reimbursement pressures in vascular surgery.
Objective:
The objective of this study was to review vascular surgical financial trends in a tertiary care setting and to evaluate the impact of a vascular program within a health care system in the face of lower reimbursements and rising costs.
Methods:
With use of Current Procedural Terminology codes and diagnosis-related groups, vascular categories of aortic disease, cerebrovascular disease, and peripheral occlusive disease (POCD) were identified at an academic tertiary health care center. Hospital margins were calculated for each of the defined categories by Health Quest cost accounting data cross-walked with Current Procedural Terminology codes, date of service, and admitting physician for each year from 2010 to 2012.
Results:
All categories realized volume growth and a positive margin for the hospital. In comparison of 2010 and 2012, aortic cases showed an overall volume growth of 19%, revenue increase of 31%, and cost increase of 54%, resulting in an overall margin decrease of 7%. Cerebrovascular cases showed a 30% increase in volume growth, revenue increase of 13%, and cost increase of 5%, resulting in a margin increase of 18%. POCD cases showed overall volume growth of 35%, revenue increase of 37%, cost increase of 54%, and a margin increase of 15%. The margin for POCD exceeded the margin for aortic and cerebrovascular cases combined by 77%.
Conclusions:
In evaluating a vascular program's fiscal viability, volume-driven POCD was the only category producing growing hospital margins in the face of significant cost increases.
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