Economic Assessment of the General Thoracic Surgery Outpatient Service

Background One aspect of the definition of institutional value for any program is based on the return on investment (ROI) for that program. Program requests for future resource allocations depend, in part, on that information. The purpose of this project was to determine the ROI for initial outpatient visits only for our General Thoracic Surgery (GTS) program. Methods The number of GTS outpatient visits, studies, and requested consultations ordered by GTS surgeons only was determined after review of the hospital database and office records for the calendar year 2003. Only charges associated with the initial outpatient visits (no inpatient or physician charges) were included. Charges were based on hospital finance department data. The ROI for GTS outpatient services was calculated using total hospital costs and hospital collections. Results There were 689 initial outpatient GTS visits. The majority were for lung cancer (48%), benign lung diseases (21%), and esophageal diseases (14%). Total outpatient charges were $1.25M and by disease process were lung cancer ($644,000), benign lung disease ($90,000), esophageal disease ($159,000), and other ($357,000). The most significant hospital charges were the following: radiology ($850,000), laboratory studies ($82,000), gastrointestinal medicine studies ($59,000), and cardiology ($42,000). Total operational costs for the GTS clinic were $415,000 and hospital collections were $513,000, yielding an ROI of $98,000 or an operating margin of 19%. Conclusions An operating margin of 19% for GTS outpatient services is better than most Fortune 500 companies. Acquisition of this type of information by GTS surgeons may be helpful for future program development and institutional resource allocation.