The MD, MBA: Key to Cochlear Implant Program Survival?

Abstract

Problem Despite the well established clinical efficacy of cochlear implantation in children and adults, many cochlear implant programs face daunting financial challenges. This presentation reports how the application of business principles achieved a successful financial resurrection of a cochlear implant closed due to excessive financial losses. Methods Using currently accepted business practices of financial analysis, supply chain and cost management, and market assessment, the economic data leading up to the program's financial failure were methodically assessed. Financial assessment of a cochlear implant program performed by an implant surgeon formally trained in business methodology. Results Identified during the financial exam were poor cost controls, little standardization of financial reporting, little understanding of actual and potential sources of revenue and cost, and a failure of the all parties to establish a suitable business model that would allow for the formal and accurate assessment of the program. Improved financial performance based on appropriate supply chain management, revenue enhancement, and accurate program financial reporting allowed for the cochlear implant program to reduce costs, increase revenue, and ultimately become financially viable. Conclusion Not understanding the business management of the cochlear implant program had a profoundly detrimental effect on the program's survival, despite the clinical success. Physicians must develop a business acumen that matches their clinical acumen, and use those tools to ensure that clinical success is not threatened by economic failure. Significance Understanding of the financial aspects of a cochlear implant program is as important as understanding the clinical aspects of cochlear implantation, and emphasis should be placed on developing those skills in the process of developing and managing cochlear implant programs.