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Multivariable Cost Frontiers-Qualitative Financial Analyses Using Operational Metrics From the Implementation of a

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  • 1University of Vermont Larner College of Medicine, Burlington, VT.

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Summary
This summary is machine-generated.

Implementing a fellowship program in vascular surgery increased profitability, despite higher variable costs. This financial analysis shows cost frontiers can track performance improvements in surgical services.

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Area of Science:

  • Healthcare Management
  • Surgical Operations
  • Financial Analysis

Background:

  • The Division of Vascular Surgery at the University of Vermont Medical Center restructured inpatient services with a new fellowship program in July 2016.
  • This change aimed to alter the operational dynamics of surgical care delivery.

Purpose of the Study:

  • To evaluate the financial impact of implementing a fellowship program on a vascular surgery division.
  • To introduce and apply multivariable financial analyses and cost frontiers to assess operational changes.

Main Methods:

  • Utilized WiseOR, a web-based operating room (OR) management system, to extract OR metrics before and after the fellowship program's implementation.
  • Calculated variable costs by multiplying cost per minute by after-hours utilization, based on established guidelines.
  • Employed zones and cutoffs for graphical representation of cost efficiency trends.

Main Results:

  • Surgeon caseload/FTE increased (P=0.0771), while monthly variable costs/FTE significantly rose (P=0.0138).
  • Monthly revenue/FTE and adjusted monthly revenue/FTE showed increases (P=0.2639 and P=0.3374, respectively).
  • The average monthly percentage of adjusted revenue lost to variable costs increased (P=0.0078), yet adjusted revenue per case/FTE remained stable (P=0.9889).

Conclusions:

  • Multivariable cost frontiers effectively tracked a net increase in profitability following fellowship implementation.
  • The study demonstrates that financial performance can improve with fellowship programs, even with potential diminishing returns at higher caseloads.