Clinical Revenue Research Articles

Competitive forces and academic plastic surgery.

Economic constraints developing as a result of rising health care costs in the United States pose significant challenges for and threats to the survival of academic plastic surgery. Declining clinical revenues, competition for patients and resources from other health care providers, and reductions in support of its education and research efforts necessitate a paradigm shift if it is to survive. Questionnaires were used to collect data from 92 of the 100 postgraduate training program directors of plastic surgery in the United States. The most common source of clinical income on a national basis was indemnity insurance. Sources of clinical income varied by region. The majority of programs, 80 percent, report that at least 75 percent of the income support for faculty came from practice income. Financial support for ancillary and research personnel, in large part, came from this same source. Resident salaries and benefits came largely from other resources. Generally as population density within the metropolitan area in which a program was located increased, so too did the number of competing plastic surgeons, including graduates of the program and nonacademic cosmetic and hand surgeons. However, levels of competition for cosmetic surgery in smaller metropolitan areas of some regions seem to be similar to those reported by programs in larger communities. Plastic surgery programs in very competitive communities received significantly greater amounts of their income from indemnity insurance and self-paying patients than did programs in less competitive metropolitan areas. Internal competition from other surgical and nonsurgical specialists within the same institution is likewise keen. Virtually all respondents, 93 percent, report that their institutions provided patient care in a least one designated center of excellence in the following disciplines: hand, microsurgery, craniofacial, cleft lip and palate, burn, and cosmetic surgery. This study suggests that centers of excellence are more likely to be present in metropolitan areas with fewer competing surgeons than in areas with large numbers of competing surgeons. The data did not demonstrate that the presence of a center of excellence substantially affected the sources or levels of clinical income. To survive as an academic entity, program directors must correctly perceive and fulfill the needs and wants of its stakeholders, particularly with regard to quality of life issues.

A FACULTY EVALUATION/INCENTIVE TOOL

S28 Evaluation of a faculty member's contribution to the Departmental mission often is subjective, leading to inequitable distribution of Departmental income and assets. In addition, academic leaders have had difficulty in devising incentive plans to maximize faculty performance. We have devised and implemented an objective evaluation/incentive device as a Departmental management tool. METHODS: Faculty performance was divided according to the traditional academic triad of scholarly activity, teaching, and service. Every desirable activity, no matter how trivial, was assigned to an appropriate category. In order to establish a gold-standard, an activity performed by each faculty member was identified and agreed upon by all faculty members. Then, each of the other activities was given a relative value based on the gold-standard and agreed to by a majority of the faculty. A mechanism for verification of each activity was implemented. A committee of faculty and staff was chosen to reevaluate the existing value system and to consider addition or deletion. Finally, the Departmental Chair identified a reward/incentive system. RESULTS: It was decided that a day of attending activity in the operating room, intensive care unit, or pain clinic would serve as the gold-standard. Initially, Departmental income and staffing were such that salaries were maximized around the 70th percentile, according to SAAC and AAMC criteria. Non-clinical time was awarded only for activity deemed essential by the Chair. The system was utilized to reward above average activity by assigning more non-clinical time to encourage substantial research and teaching productivity, exemplified by presentation at national meetings, publications, and resident/student evaluations. Over several years, staffing increased, clinical revenues declined, and faculty established productive research programs and teaching plans. As a result, a financial bonus system replaced non-clinical time as the activity incentive. Base salaries were decreased approximately 20% and a bonus system was initiated, such that mean income remained unchanged. CONCLUSIONS: Initially, by making non-clinical time, rather than income the reward, scholarly activity was encouraged. All faculty had equivalent opportunity to achieve success, but with time, certain faculty excelled and, with the reward of more non-clinical time, their success was self-propagating. Those faculty who were unable to achieve much success in teaching or research have remained as clinical instructors, or have resigned. When bonus pay was substituted as an incentive, an individual with average activity according to the relative value scale, achieved a base salary plus bonus equivalent to the previous years average income. Those individuals with sub-average activity achieved less of a bonus and those with above average achievement received a larger bonus. Those faculty who use non-clinical time for scholarly activity still receive credit. If scholarly activity can be maintained, while maintaining clinical activity, the bonus is greater. In summary, a relative value system was implemented and utilized successfully to encourage scholarly activity, teaching, and active clinical practice. Alteration of the reward system resulted in appropriate faculty behavior.

Relationship Between National Institutes of Health Research Awards to US Medical Schools and Managed Care Market Penetration

Moy, Ernest; Mazzaschi, Anthony J.; Levin, Rebecca J.; Blake, David A.; Griner, Paul F. Author Information

Subspecialty Training in Pediatric Anesthesiology

Subspecialty Training in Pediatric Anesthesiology

Economic Impact of Angioplasty Salvage Techniques, With an Emphasis on Coronary Stents: A Method Incorporating Costs, Revenues, Clinical Effectiveness and Payer Mix

Objectives. We sought to broaden assessment of the economic impact of percutaneous transluminal coronary angioplasty (PTCA) revascularization salvage strategies by taking into account costs, revenues, the off-setting effects of prevented clinical complications and the effects of payer mix.Background. Previous economic analyses of PTCA have focused on the direct costs of treatment but have not accounted either for associated revenues or for the ability of costly salvage techniques such as coronary stenting to reduce even costlier complications.Methods. Procedural costs, revenues and contribution margins (i.e., “profit”) were measured for 765 consecutive PTCA cases to assess the economic impact of salvage techniques (prolonged heparin administration, thrombolysis, intracoronary stenting or use of perfusion balloon catheters) and clinical complications (myocardial infarction, coronary artery bypass graft surgery [CABG] or acute vessel closure with repeat PTCA). To assess the economic impact of various salvage techniques for failed PTCA, we used actual 1995 financial data as well as models of various mixes of fee-for-service, diagnosis-related group (DRG) and capitated payers.Results. Under fee-for-service arrangements, most salvage techniques were profitable for the hospital. Stents were profitable at almost any level of clinical effectiveness. Under DRG-based systems, most salvage techniques such as stenting produced a financial loss to the hospital because one complication (CABG) remained profitable. Under capitated arrangements, stenting and other salvage modalities were profitable only if they were clinically effective in preventing complications in >50% of cases in which they were used.Conclusions. The economic impact of PTCA salvage techniques depends on their clinical effectiveness, costs and revenues. In reimbursement systems dominated by DRG payers, salvage techniques are not rewarded, whereas complications are. Under capitated systems, the level of clinical effectiveness needed to achieve cost savings is probably not achievable in current practice. Further studies are needed to define equitable reimbursement schedules that will promote clinically effective practice.

Differential clinical workloads among faculty at a major academic health center.

The authors analyzed patient care (1981-1995) and financial data (1991-1996) to determine if differential workloads existed at a major academic health center. Academic health centers differ markedly from community-based medical centers, but they are required to compete with others who have a more circumscribed mission and a responsibility for providing less complex care. Changes in health care systems may lessen incentives to generate clinical revenue and may adversely affect educational and research programs. Patient care data at the University of Michigan Health System were analyzed by discipline for level of activity from 1981 to 1995 and were compared to professional and institutional financial data from 1991 to 1995. Surgeons represented 11% of the total full-time physicians throughout the period of the study (94 of the 836 Medical Center physicians, 1995). They accounted for 33% of hospital admissions (11,616 of 35,101) and 16% of outpatient visits (92,364 of 568,738). Since 1981, surgeons experienced a 249% increase in total operative workload (6799-16,909 procedures), representing a 30% increase in operations/surgeon (138-180 operations). Surgical efforts in 1995 accounted for 29% of the total professional fee revenue and $240 million of the $512-million University of Michigan Hospital revenue. Surgeons had a greater collective and individual responsibility than did nonsurgeons for clinical activity and the financial viability of the academic health centers studied. Many proposals for financing health care delivery systems have the potential to exacerbate this differential. Restructuring of academic health centers must address this fact, lest their academic mission and scholarly activity be compromised.

Relationship Between Market Competition and the Activities and Attitudes of Medical School Faculty

Growth in health care market competition and the concomitant increasing dependence of academic health centers on clinical revenues may require medical school faculty to increase patient care activity, perhaps at the expense of research and teaching. However, the relationship between health care market competitiveness and the activities and attitudes of medical school faculty has not been established. To examine the relationship between market competitiveness and the activities and attitudes of medical school faculty members. Mailed survey of 3394 life-science faculty in the 50 universities that received the most funding from the National Institutes of Health in 1993. Medical schools in research-intensive universities. A total of 2167 faculty responded to the survey (response rate, 64%). We analyzed the responses of 1671 medical school research faculty located in markets of differing health care competitiveness, ranging from least competitive (stage 1) to most competitive (stage 4) markets. The number of publications in refereed journals in the last 3 years, the average number of hours per week of teaching contact, whether faculty in clinical departments had patient care responsibilities, and measures of departmental community, cooperation, and conflict. Clinical researchers in stage 1 and 2 markets published more scientific articles than those in stage 3 markets (14.5 vs 12.6, P=.04) or in stage 4 markets (14.5 vs 12.0, P=.03). Among 96 young faculty (professional age-<10 years) in clinical departments, 11 (44%) of those in stage 1 and 2 markets had patient care duties compared with 32 (56.1%) of young faculty members in stage 3 markets (P=.04) and 12 (85.7%) of those in stage 4 markets (P=.01). The percentage of senior faculty in clinical departments (n=691) with patient care responsibilities did not differ significantly by market stage. Compared with faculty in less competitive markets, faculty in stage 4 markets perceived lower levels of departmental cooperation and higher levels of conflict. Increased competitiveness of health care markets seems to hinder the capacity of academic health centers to conduct clinical research and to foster the careers of young clinical faculty.

Relationship Between National Institutes of Health Research Awards to US Medical Schools and Managed Care Market Penetration

Medical research conducted in academic medical centers is often dependent on support from clinical revenues generated in these institutions. Anecdotal evidence suggests that managed care has the potential to affect research conducted in academic medical centers by challenging these clinical revenues. To examine whether empirical evidence supports a relationship between managed care and the ability of US medical schools to sustain biomedical research. Data on annual extramural research grants awarded to US medical schools by the National Institutes of Health (NIH) from fiscal years 1986 to 1995 were obtained, and each medical school was matched to a market for which information about health maintenance organization (HMO) penetration in 1995 was available. Growth in total NIH awards, traditional research project (R01) awards, R01 awards to clinical and basic science departments, and changes in institutional ranking by NIH awards were compared among schools located in markets with low, medium, and high managed care penetration. Medical schools in all markets had comparable rates of growth in NIH awards from 1986 to 1990. Thereafter, medical schools in markets with high managed care penetration had slower growth in the dollar amounts and numbers of NIH awards compared with schools in markets with low or medium managed care penetration. This slower growth for schools in high managed care markets was associated with loss of share of NIH awards, equal to $98 million in 1995, and lower institutional ranking by NIH awards. Much of this revenue loss can be explained by the slower growth of R01 awards to clinical departments in medical schools in high managed care markets. These findings provide evidence of an inverse relationship between growth in NIH awards during the past decade and managed care penetration among US medical schools. Whether this association is causal remains to be determined.

Creating a Research-Friendly Workplace

Research productivity is one of the defining characteristics of academic excellence. However, research may become a low priority at medical schools and academic health centers as faculty increasingly are asked to generate clinical revenue to support their faculty positions. This increased demand for clinical revenue results in less time for teaching and research. Given these conditions, it is imperative that administrators working at academic health centers look for creative ways to increase the research productivity of their faculty in those situations in which faculty may have little time to write grants and conduct research. This paper overviews the success of the Missouri Institute of Mental Health in tripling research productivity over the past 5 years.

The Future of Psychology in Departments of Psychiatry

Health care reform has put increasing pressure on faculty of medical schools to become self-supporting. Opportunities for clinical revenue will decrease, but psychologists who are able to generate research funding will become increasingly competitive, albeit as “mercenaries,” i.e., capable of paying their own way plus generating a profit to support departmental operations and educational programs. Changes in the health care system signal an end to psychiatry's paternalistic relationship to psychology and present opportunities for psychology proactively to influence its future role in health care. Research, political action, and revised scientific mission, models, and roles represent important strategies in the redefining of psychology as a basic science and major profession in health care.

TennCare and Academic Medical Centers

To ascertain the potential impact of public-sector-driven health system reform (Medicaid and Medicare programs) on academic medical centers (AMCs). A qualitative, case-study investigation of how 2 of Tennessee's 4 AMCs were affected by the TennCare program, which enrolled all of the state's Medicaid recipients and a sizable portion of its uninsured in managed care organizations (MCOs) in January 1994. We reviewed pertinent documents related to the AMCs, response to TennCare; interviewed AMC executives and staff, state officials, and representatives of MCOs serving TennCare beneficiaries; and conducted site visits at both AMCs. Changes in clinical revenues, clinical volume, patient selection, support for the AMCs, teaching and research missions, and the AMCs' response to these changes. Both AMCs studied experienced large revenue shortfalls, the closure of some specialty services, adverse patient selection, and loss of the patient volume needed to do clinical research, and had to reduce the number of training program positions. Longer-term consequences of TennCare for AMCs may include the integration of community-based services into academic missions, the acceleration of clinical diversification, and the attainment of experience in managed care, anticipating the evolution of the private-sector market. The consequences of public-sector health system reform for AMCs are similar to, and equally as challenging as, the effects of private-sector changes in health care delivery. Important differences include the rapidity with which public-sector reforms can transform the AMC market, the vulnerability of special payments to AMCs, such as graduate medical education funding, and the accountability of managers of public-sector initiatives to the political process. It remains to be seen whether public-sector reforms will afford some competitive advantage to AMCs over the long term.

Strategic planning for academic health centers

The mission, indeed the very existence, of the traditional academic health center is under siege. Changes in the financing and delivery of health care threaten the clinical revenue used to subsidize the tripartite mission of education, research, and patient care. Market practices, driven by the growth of managed care, will intensify the impact of declining revenue to threaten the actual patient base necessary to sustain these endeavors. The survival of academic health centers depends on their ability to change. This change will not be easy, and the size of the collective academic medical establishment will decrease. Successful enterprises will be those that go beyond incremental, reactive adjustments. Nothing short of organizational redesign, creation of strategic partnerships, and adopting a cybernetic model of continuous measurement, improvement and adaptability will suffice. Using the elements of a strategic planning exercise, this paper reviews the background issues that have produced the current predicament and explores the strengths and weaknesses inherent in academic institutions. Elements of an "idealized" academic health center are postulated and, finally, specific strategies that might be considered in creating a relevant and secure future are proposed.

Clinical revenues used to support the academic mission of medical schools, 1992-93

This is the report of a study undertaken by the Association of America n Medical Colleges to estimate the total amount of clinical revenues that are used to support the academic mission of U.S. medical schools. The study was prompted by an awareness that recent market-driven changes in health care organization and financing threaten the structure of medical school financing that has evolved over the last half-century. A total of 60 medical schools (48%) participated in the study. The results, projected for all 126 U.S. medical schools, indicate that faculty practice plans in 1992-93 provided an estimated $2.4 billion in support for medical school academic programs. (1992-93 was the latest year for which complete financial data were available.) This amount represents 28 cents of every faculty-practice-plan dollar collected that year. The primary way in which faculty practice plans support academic programs is by underwriting clinical faculty time spent in academic activities, but direct transfers of funds, from the practice plan to the school and departments, also play a major role. The major beneficiary of faculty-practice-plan support is research, defined broadly to include a range of scholarly activities, at an estimated level of $816 million for all U.S. schools. This is followed by undergraduate medical education, at $702 million, graduate medical education, at $594 million, and other, largely undifferentiated academic support at $244 million. In addition to faculty practice plan revenues, teaching by volunteer faculty contributed another $545 million in imputed-dollar support of academic programs, bringing the total level of support to nearly $3 billion. Volunteer faculty teaching was divided nearly evenly between undergraduate and graduate medical education. Hospitals may also provide clinical revenues in support of the academic mission by applying hospital funds to academic programs and by absorbing academic-program expenses that are not otherwise reimbursed. However, unravelling the complex web of subsidies and cross-subsidies that characterizes medical school-hospital relationships proved to be beyond the capability of the present investigation. There is considerable evidence that changes in health care organization and financing will make it unlikely that the current level of support from practice plans and volunteer faculty can be sustained and that in some cases it is already diminishing. The restructuring of medical school financing to absorb the impact of this decline of support, which comes on top of reductions in indirect cost recoveries and pressures to lower state appropriations, constitutes one of the major challenges medical schools will face in the years ahead.

The impact of managed care on clinical research: a preliminary investigation.

Rapid growth in managed care enrollment is likely to affect clinical research at the nation's academic medical centers (AMCs). Our site visit interviews indicate that managed care has not markedly reduced coverage for research-related care. However, market competition in some areas has limited AMCs' ability to subsidize research activities with clinical revenues. As they gain market share, managed care organizations will have a growing influence on research priorities. Therefore, it is important for the academic community to work with managed care leaders to identify areas for collaboration and an agenda for moving forward in the future.

The 33rd Rovenstine Lecture. What I have learned from 9 years and 9,000 papers.

The 33rd Rovenstine Lecture. What I have learned from 9 years and 9,000 papers.

Deployment of academic subspecialists in the emerging era of primary care

While the next generation of physicians promises to provide an expanding pool of highly qualified primary care internists, academic departments of internal medicine are currently confronting the apparent conflict of a maldistribution of subspecialists to generalists with growing pressures to deliver comprehensive care. The dilemma is compounded by the rigid compartmentalization and segregation of subspecialty sections and by the widespread assumption that subspecialists can provide only consultative rather than primary care. One solution is to reorganize narrowly focused and fragmented subspecialty clinics into multi-specialty group practices or firms. Subspecialists can deliver comprehensive care to patients whose predominant medical problems lie within their areas of expertise in a multispecialty firm setting that provides immediate access to subspecialists in other fields, as well as general internists, and encourages the liberal use of informal consultations. Since it is unlikely that nonacademic managed care ambulatory practices will ever be able to generate sufficient excess clinical revenues to subsidize the academic missions of an internal medicine department, and since trainees must be exposed to realistic clinic practice settings, education and clinical research should be fully integrated into the organization of an academic multispecialty practice plan. The mandate for primary care can be exploited to actually facilitate the academic enterprise by promoting the cross-fertilization of ideas among the various disciplines.

Survey of clinic fees and clinic revenue–summary report, 1993–94

Figure 4 shows the mean unadjusted revenue-per-student by program type. Advanced Education General Dentistry programs had the highest revenue-per-student this year and in two of the three previous years. Oral and Maxillofacial Surgery programs generated the second highest mean amount of clinic revenue-per-student, followed by General Practice Residencies, Orthodontic programs, and Prosthodontic programs. Pediatric Dentistry, Endodontics, and Periodontics programs also had similar mean revenues-per-student. The smallest revenues-per-student were generated by D.D.S./D.M.D. and dental hygiene programs. These data should be interpreted with care. A review of the information for each program shows that there are significant variations in these data from school to school. These variations could be caused by different accounting procedures as well as differences in program size and location. Consequently, these data are best viewed in general terms.

Support for biomedical research and its impact on radiology.

Research in medical imaging has experienced substantial growth during the past decade. Still, research is a small fraction of the budget of the typical academic radiology program. Few radiology faculty participate in hypothesis-driven research projects. Funding of research will be more difficult to secure in the future, since clinical subsidies will diminish or disappear, support from industry is decreasing, and funds from private foundations and philanthropists are not likely to increase. Support from the NIH will probably remain about level in constant dollars. In response to these constraints, radiology will have to be both more creative and more opportunistic to tap the limited remaining resources of research support. An excellent compilation of some major resources was recently published by Williams and Holden (9). Efforts of the Conjoint Committee will continue to be critical for continuing support of the LDRR, encouraging the allocation of intramural and extramural resources of the NCI to medical imaging, guiding the development of the American Academy of Radiologic Research, providing research training opportunities for physicians and scientists in radiology, and leading the research effort in medical imaging in general (10). Within individual institutions and departments, imaging research must continue to be acknowledged as a priority despite increasing pressures to generate clinical revenue. Enhanced efforts are warranted to nurture the research interests of younger faculty and selected residents and fellows, including pairing them with research mentors and providing them with opportunities to develop skills in areas such as research design, statistical analysis, and evaluative techniques. The long-term well-being of radiology and its important contributions to patient care are dependent on its continued investment in research and development.

Financial support for research in radiology: a survey of original investigations published in the AJR and Radiology.

This study was done to determine how often the original research published in AJR and Radiology is formally funded by external sources of explicit intramural institutional research grants and to explore the association of financial support with the subspecialty field; type of research (clinical vs basic); number of coauthors; number of departments, nonradiology departments, and institutions participating per paper; country of origin; and citation impact of investigations. All 736 original articles published in AJR and Radiology in 1990 were surveyed. The following information was abstracted: the presence or absence of specific funding, as determined from the footnote acknowledgments given by the authors (for the 560 papers from the United States, financial support was further classified according to the funding agency listed first); the subspecialty field of research, as determined from the indexing of the paper in the table of contents; the type of research (clinical, basic, combined clinical and basic); the number of coauthors; the number of departments, nonradiology departments, and institutions participating; the first author's department (radiology, medicine, surgery, medical physics); the first author's institution (university-affiliated medical institution, medical institution not affiliated with a university, National Institutes of Health center); and the country of the first author's institution. Research impact was assessed by using citation counts. Only 17% of the surveyed studies were formally funded. The 95 funded studies from the United States were federally sponsored (63%), funded by private industry (11%), supported by nonprofit foundations (16%), or funded from explicit intramural institutional monies (11%). Funding was significantly related to the subspecialty field (p = .00007), the type of research (p < .000001), and the category of the first author's department (p < .000001). When papers on contrast media research were excluded from the analysis, the association of funding to the field of research became statistically insignificant (p = .21). Financial support was not significantly related to the category of the first author's institution (p = .71) or to whether the research was done in the United States (p = .71). A statistically significant positive association was found between funding and the number of coauthors (p = .013), the number of departments (p = .049), nonradiology departments (p = .004), and institutions participating per paper (p = .018). Funded papers were cited more extensively than nonfunded papers (p = .015). Only a small percentage of radiology research attracts formal, especially extramural, financial support. This should be a cause for concern. As the informal funding of investigations from redirected clinical revenues is diminishing, action will be required to procure funds to support the radiology research necessary for the vitality of the specialty.

Maximizing Clinical Revenues of Psychiatric Consultation-Liaison Services: An Economic Commentary

Clinical revenues rarely suffice to support an academic psychiatric consultation-liaison (C-L) service. Nonetheless, the revenue provides a major source of financial support. The authors describe ten steps that can help maximize the financial return from the C-L service's clinical efforts. The steps range from establishing a reasonable fee schedule and creating an efficient charge document, through educating residents and faculty physicians about documentation requirements, to billing quickly and insisting on meaningful monthly reports from the faculty practice plan. A number of "magic phrases" (proper and key wording for reimbursement) are described in detail that can markedly reduce documentation requirements.