transplant hepatology: finanacial program organization

Last revised 10/26/2013

Transplant hepatology:

finanacial program organization

James Trotter, MDBaylor University Medical Center

Dallas, Texas

Background

“Pick the set of problems you want to deal with.” Daniel Foster, MD, circa 1992

“In hepatology, there are no great jobs; only good jobs.” Thomas Boyer, MD, circa 1997

institutional support

MDproductivity

MD/institutional equinimity

Hepatology program support

1) It is impossible to earn salary + overhead evaluating and managing (E/M) complex patients.

Hepatology is a financially insolvent enterprise.

Hepatology program support

2) To remain solvent, hepatology requires supplementation by liver transplantation profits.

3) Most transplant programs don’t provide sufficient support for hepatology.

Lack of adequate hepatology support

A) Most programs don’t understand hepatology value (benefit/cost).

B) Hospitals will pay MD’s as little as possible to retain their services.

Overview

4) The most common reason for hepatologist discontentment is the perception of

inadequate salary and support.

MD productivity

institutional support

MD discontentment

institutional support

MD productivity

Institutional discontentment

MD/institutional equinimity

5) Hepatology funding/support is one of the

most important means of building and

stabilizing a liver transplant program.

institutional support

MDproductivity

MD/institutional equinimity

Hepatology program support

• How much of the following is fair/required:

• hepatology salary?• hepatology support staff FTE’s? • hepatology workload/RVU’s?

GENERALHEPATOLOGY

POST-TRANSPLANTHEPATOLOGY

PRE-TRANSPLANTHEPATOLOGY

Program background

• liver transplantation since 1984• approximately 4000 total liver transplants • yearly activity • –450 liver transplant evaluations • –442 active listed patients • –135 liver transplants • –co-manage 2500 liver recipients

Program background

• hospital-based, 12-MD (11 FTE) practice • two hospitals – Dallas and Fort Worth • IM, GI and transpl hep training programs • HealthTexas –400+ MD, multi-specialty –subsidiary of Baylor Health System –employs transplant hepatologists/surgeons

Clinical outreach sites

Frisco 25 Garland 10 Grand Prairie 15 Waxahachie 25 McKinney 20 Midlothian 25 Longview 125 Austin 200 Lubbock 350 Odessa 360

site miles from DFW

Service distribution11 hepatology MD FTE

general hepatology

service

pre-transplanthepatology

clinic

post-transplanthepatology

clinic

clinical and administrative staff19 clinical 6 clinical 6 clinical24 admin 6 admin 6 admin

Cost – administrative and clinical

$9.1 million per year

Cost – administrative and clinical

overhead (31 %)

MD salary (49 %)

staff salary (20 %)

$9.1 million per year

Support staff – total

administrative clinical

Support staff – per hepatologist

administrative clinical

3.5 staff per hepatologist

Hepatology - salarystarting salary $2X0,000

RVU > 3000/year + $42.65/RVU

RVU salary $2X0,000 + 3000 $2X0,0004000 $2X0,000 + $42,6505000 $2X0,000 + $83,3006000 $2X0,000 +

$127,9507000 $2X0,000 +

$170,600

Cost – administrative and clinical

overhead (31 %)

MD salary (49 %)

staff salary (20 %)

cost of practice = $9.1 M

Revenue

$9.1 million per year

$3.1 million hepatology revenue

Funding – yearly revenuetotal per hepatologist 44,725 total work RVU’s 4066

22,623 encounters 2057 9508 office (42 %)13,115 hospital (58 %)

$5.36 M gross charges $487k

$3.06 M cash collections (57 %) $278k

Total revenue is $3.1 M

Revenue - supplement

$6.1 million per year deficit22,643 encounters per year

$269.40 extra per encounter

=

Revenue - supplement

$9.1 million per year

$3.1 M hepatology revenue

$6.0 M hospital supplement

Funding - revenue

$3.1 M revenue - $9.1 M cost = $6.0 M loss

$6.14M = $511k support per MD 12 hepatologists

Contribution margin

contribution margin = hospital revenue – direct costs,

where direct cost are

hepatology MD/staff salary benefit, supplies

indirect costs computers, hospital administration, etc.

Contribution margin

contribution margin = hospital revenue – direct costs,

For hepatology $XX.2 M

$XX.2 M contribution margin - $X.1 M cost = $X.1 M margin

institutional support

MDproductivity

MD/institutional equinimity

Summary – support per hepatologist

• 2.0 administrative + 1.5 clinical FTE

• $2xx,000 + $42.65 per RVU > 3000

• cost approximately $500,000 per MD

Summary – yearly revenue per MD

• 4066 RVU

• 2057 encounters

• $487k gross charges

• $278k collections

Funding - revenuetotal per hepatologist 44,725 RVU’s 4066

22,623 encounters 2057

RVU/encounter 1.98

RVU/encounter range 1.6 for non-procedural

2.0 procedural (poor biller)

2.4 procedural (good biller)