Multivariable Cost Frontiers - Qualitative Financial Analyses using Operational Metrics from the Implementation of a Surgery Fellowship.

OBJECTIVE: We expand the application of cost frontiers and introduce a novel approach using qualitative multivariable financial analyses. SUMMARY BACKGROUND DATA: With the creation of a 5+2 year fellowship program in July 2016, the Division of Vascular Surgery at the University of Vermont Medical Center altered the underlying operational structure of its inpatient services. METHODS: Using WiseOR (Palo Alto, CA), a web-based OR management data system, we extracted the operating room metrics before and after August 1, 2016 service for each 4-week period spanning from September 2015 to July 2017. The cost per minute modeled after Childers et al.'s inpatient OR cost guidelines was multiplied by the after-hours utilization to determine variable cost. Zones with corresponding cutoffs were used to graphically represent cost efficiency trends. RESULTS: Caseload/FTE for attending surgeons increased from 11.54 cases per month to 13.02 cases per month (p = 0.0771). Monthly variable costs/FTE increased from $540.2 to $1873 (p=0.0138). Monthly revenue/FTE increased from $61505 to $70277 (p=0.2639). Adjusted monthly revenue/FTE increased from $60965 to $68403 (p=0.3374). Average monthly percent of adjusted revenue/FTE lost to variable costs increased from 0.85% to 2.77% (p=0.0078). Adjusted monthly revenue/case/FTE remained the same from $5309 to $5319 (p=0.9889). CONCLUSIONS: In summary, we demonstrate that multi-variable cost (or performance) frontiers can track a net increase in profitability associated with fellowship implementation despite diminishing returns at higher caseloads.