Abstract
We previously studied hospitals in the United States of America that are losing money despite limiting the hours that operating room (OR) staff are available to care for patients undergoing elective surgery. These hospitals routinely keep utilization relatively high to maximize revenue. We tested, using discrete-event computer simulation, whether increasing patient volume while being reimbursed less for each additional patient can reliably achieve an increase in revenue when initial adjusted OR utilization is 90%. We found that increasing the volume of referred patients by the amount expected to fill the surgical suite (100%/90%) would increase utilization by <1% for a hospital surgical suite (with longer duration cases) and 4% for an ambulatory surgery suite (with short cases). The increase in patient volume would result in longer patient waiting times for surgery and more patients leaving the surgical queue. With a 15% reduction in payment for the new patients, the increase in volume may not increase revenue and can even decrease the contribution margin for the hospital surgical suite. The implication is that for hospitals with a relatively high OR utilization, signing discounted contracts to increase patient volume by the amount expected to "fill" the OR can have the net effect of decreasing the contribution margin (i.e., profitability).
| Original language | English (US) |
|---|---|
| Pages (from-to) | 1215-1221 |
| Number of pages | 7 |
| Journal | Anesthesia and Analgesia |
| Volume | 92 |
| Issue number | 5 |
| DOIs | |
| State | Published - Jan 1 2001 |
| Externally published | Yes |
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ASJC Scopus subject areas
- Anesthesiology and Pain Medicine
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The impact on revenue of increasing patient volume at surgical suites with relatively high operating room utilization. / Dexter, Franklin; Macario, Alex; Lubarsky, David.
In: Anesthesia and Analgesia, Vol. 92, No. 5, 01.01.2001, p. 1215-1221.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The impact on revenue of increasing patient volume at surgical suites with relatively high operating room utilization
AU - Dexter, Franklin
AU - Macario, Alex
AU - Lubarsky, David
PY - 2001/1/1
Y1 - 2001/1/1
N2 - We previously studied hospitals in the United States of America that are losing money despite limiting the hours that operating room (OR) staff are available to care for patients undergoing elective surgery. These hospitals routinely keep utilization relatively high to maximize revenue. We tested, using discrete-event computer simulation, whether increasing patient volume while being reimbursed less for each additional patient can reliably achieve an increase in revenue when initial adjusted OR utilization is 90%. We found that increasing the volume of referred patients by the amount expected to fill the surgical suite (100%/90%) would increase utilization by <1% for a hospital surgical suite (with longer duration cases) and 4% for an ambulatory surgery suite (with short cases). The increase in patient volume would result in longer patient waiting times for surgery and more patients leaving the surgical queue. With a 15% reduction in payment for the new patients, the increase in volume may not increase revenue and can even decrease the contribution margin for the hospital surgical suite. The implication is that for hospitals with a relatively high OR utilization, signing discounted contracts to increase patient volume by the amount expected to "fill" the OR can have the net effect of decreasing the contribution margin (i.e., profitability).
AB - We previously studied hospitals in the United States of America that are losing money despite limiting the hours that operating room (OR) staff are available to care for patients undergoing elective surgery. These hospitals routinely keep utilization relatively high to maximize revenue. We tested, using discrete-event computer simulation, whether increasing patient volume while being reimbursed less for each additional patient can reliably achieve an increase in revenue when initial adjusted OR utilization is 90%. We found that increasing the volume of referred patients by the amount expected to fill the surgical suite (100%/90%) would increase utilization by <1% for a hospital surgical suite (with longer duration cases) and 4% for an ambulatory surgery suite (with short cases). The increase in patient volume would result in longer patient waiting times for surgery and more patients leaving the surgical queue. With a 15% reduction in payment for the new patients, the increase in volume may not increase revenue and can even decrease the contribution margin for the hospital surgical suite. The implication is that for hospitals with a relatively high OR utilization, signing discounted contracts to increase patient volume by the amount expected to "fill" the OR can have the net effect of decreasing the contribution margin (i.e., profitability).
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U2 - 10.1097/00000539-200105000-00025
DO - 10.1097/00000539-200105000-00025
M3 - Article
VL - 92
SP - 1215
EP - 1221
JO - Anesthesia and Analgesia
JF - Anesthesia and Analgesia
SN - 0003-2999
IS - 5
ER -