Overcoming a perfect storm: an academic cardiology section's story of survival.
Increasingly, academic institutions are grappling with financial pressures that threaten the academic mission. The author presents an actual case history in which a section of cardiology in an academic health center was confronted with huge projected deficits that had to be eliminated within the fiscal year. The section used eight principles to shift from deficit to profitability (i.e., having revenue exceed costs). These principles included confronting the brutal facts, managing costs and revenue cycles, setting expectations for faculty, and quality improvement. The section accomplished deficit reduction through reducing faculty salaries (nearly $2 million) and nonfaculty salaries ($1.3 million) and reducing operational costs while maintaining revenues by increasing individual faculty productivity and reducing accounts receivable. In the face of these reductions, clinical revenues were maintained, but research revenue and productivity fell (but research is being fostered now that clinical services are profitable again). These principles can be used to stabilize the financial position of clinical practices in academic settings that are facing financial challenges.
Calvin
James E
JE
Rush University Medical Center, Chicago, Illinois, USA. James_Calvin@rush.edu
D000046:Academic Medical Centers / Q000191:economics*; D000067:Accounts Payable and Receivable; D016507:Cardiology Service, Hospital / Q000191:economics*; D003363:Cost Control; D017598:Efficiency, Organizational; D017048:Health Care Costs; D006801:Humans; D007349:Insurance, Health, Reimbursement / Q000191:economics; D009936:Organizational Innovation; D009937:Organizational Objectives; D011785:Quality Assurance, Health Care; D012456:Salaries and Fringe Benefits