Last revised 10/26/2013

Transplant hepatology:
finanacial program organization

James Trotter, MD Baylor 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

MD/institutional equinimity

institutional support

MD productivity

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 dont provide sufficient support for hepatology.

Lack of adequate hepatology support

A) Most programs dont understand hepatology value (benefit/cost).

B) Hospitals will pay MDs 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 discontentment
institutional support

MD productivity

Institutional discontentment
MD productivity

institutional support

MD/institutional equinimity
5) Hepatology funding/support is one of the most important means of building and stabilizing a liver transplant program.

MD/institutional equinimity

institutional support

MD productivity

Hepatology program support

How much of the following is fair/required: hepatology salary? hepatology support staff FTEs? hepatology workload/RVUs?

GENERAL HEPATOLOGY

POST-TRANSPLANT HEPATOLOGY

PRE-TRANSPLANT HEPATOLOGY

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

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

Service distribution
11 hepatology MD FTE

general hepatology service

pre-transplant hepatology clinic

post-transplant hepatology clinic

19 clinical 24 admin

clinical and administrative staff 6 clinical 6 clinical 6 admin 6 admin

Cost administrative and clinical

$9.1 million per year

Cost administrative and clinical

overhead (31 %)

$9.1 million per year

MD salary (49 %)

staff salary (20 %)

Support staff total

administrative clinical

Support staff per hepatologist

3.5 staff per hepatologist
administrative clinical

Hepatology - salary
starting salary $2X0,000 RVU > 3000/year + $42.65/RVU RVU 3000 4000 5000 6000 7000 salary $2X0,000 + $2X0,000 $2X0,000 + $42,650 $2X0,000 + $83,300 $2X0,000 + $127,950 $2X0,000 + $170,600

Cost administrative and clinical

overhead (31 %)

cost of practice = $9.1 M

MD salary (49 %)

staff salary (20 %)

Revenue

$9.1 million per year

$3.1 million hepatology revenue

Funding yearly revenue

total 44,725 total work RVUs 22,623 encounters 9508 office 13,115 hospital $5.36 M gross charges per hepatologist 4066 2057 (42 %) (58 %) $487k

$3.06 M cash collections (57 %)

$278k

Total revenue is $3.1 M

Revenue - supplement
$6.1 million per year deficit 22,643 encounters per year
=

$269.40 extra per encounter

Revenue - supplement

$6.0 M hospital supplement

$9.1 million per year

$3.1 M hepatology revenue

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

MD/institutional equinimity

institutional support

MD productivity

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 - revenue
total

44,725 RVUs
22,623 encounters RVU/encounter RVU/encounter range

per hepatologist 4066 2057 1.98 1.6 for non-procedural 2.0 procedural (poor

biller) 2.4 procedural (good