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2011 Annual Meeting Abstracts

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Work smarter, not harder: Using procedural portfolio analysis to improve revenue, clinical thoughput, and patient satisfaction in an academic plastic surgery practice
Charles S. Hultman, MD, MBA, Christopher Ellington, MBA, Susan Phillips, RN, Mark Harris, MHA, Allen Daugird, MD, MBA, Joellen Buckio, MHA, Anthony A. Meyer, MD, PhD.
University of North Carolina, Chapel Hill, NC, USA.

PURPOSE:
Portfolio planning in health care represents the strategic prioritization of services that permits an organization to better achieve its goals of margin and mission. Because of recent volatility in the economy, declining reimbursement, and rising costs of providing care, such strategic planning has become increasingly important, if academic medical centers want to remain leaders in health care. This project assesses the financial impact of procedural portfolio planning on an academic plastic surgery practice.
METHODS:
We tracked the top 50 procedures, defined as total charges per CPT code, that were performed from FY09 through FY10, for the 6 providers in a stable plastic surgery practice. At the end of FY09, we implemented 3 types of strategic changes: growth of areas with high contribution margin (laser ablation), curtailment of high-risk procedures with negative contribution margin (panniculectomy), and improved efficiency of mission-critical services with high resource consumption (free-flap breast reconstruction). During this 2-year period, we had no turnover in faculty, did not pursue any formal marketing, did not change our surgical fees or billing system, provided care independent of payer mix, and maintained our commitment to indigent care. Outcome measures included procedural charges and revenue, collection rates, work RVUs, OR room times, idle times (room time less case time), receipts/minute in OR, uncompensated charity care, and patient satisfaction (Press-Gainey scores). Prior to the study period, incremental growth in our practice was 1% from FY08 to FY09, in terms of charges and receipts.
RESULTS:
After implementation of our procedural portfolio planning project, the financial position of our division improved dramatically, with patient satisfaction rates increasing from 85.5% to 94.1% and charity care remaining constant at $407K/year. Encounters, wRVUs, charges, and receipts all increased by 16-27%, with receipts/minute increasing from $5.60/minute to $7.28/minute. Interestingly, but not surprisingly, highest margin cases did not correspond with highest volume or highest revenue cases; portfolio analysis helped us to align these parameters, without sacrificing patient satisfaction or commitment to indigent care. The highest receipt/minute procedure was laser ablation of vascular lesions ($23.87), whereas one of the lowest receipt/minute cases was muscle free flap ($3.07). Selected procedures are summarized in the table.
CONCLUSION:
Procedural portfolio analysis is a powerful tool that can guide strategy and positively impact the financial position and clinical value of the services provided by an academic plastic surgery practice. Identifying high margin procedures allows the surgeon to focus marketing efforts, target areas of future growth, and optimize the blend of margin and mission.
Comparison of FY09 (pre-portfolio analysis) and FY10 (post-portfolio implementation)
Encounters (clinic visits and OR cases)wRVUsCharges ($)Receipts ($)A/R ($)Gross collection rateRoom time (mins)/ caseOR idle time (mins)/ caseReceipts ($)/ minute
FY0915.3K34.0K7.18M2.39M1.26M35.9%20044.45.6
FY1018.6K39.4K8.35M3.03M1.41M36.3%16834.67.8
variance22%16%16%27%12%1%-22%-22%30%

Selected CPT codes with financial profiles
CPT codedescriptionTotal charges ($)Total receipts ($)# of casesCharge ($)/ unitRevenue ($)/ unitAllowable ($)Room time (mins)Revenue ($)/ minute
15100split-thickness skin graft121K43K79153454313141254.34
14300adjacent tissue rearrangement173K48K59292580714545414.94
17107laser ablation of vascular lesion106K39K8512504537661923.87
15756muscle free flap94K19K156274126732334133.07
19350nipple areolar reconstruction119K62K492428125912029812.85
19357breast reconstruction with tissue expander379K196K9539862059219215713.12
42200cleft palate repair106K36K41259687712181804.87


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