Revenue Generation

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Revenue Generation

• Richard Wolfe, MD
• Beth Israel Deaconess Medical Center

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If you want to know what God thinks of money,
just look at the people he gave it to.
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Revenue GenerationGoals and Means

• Alignment of Goals
• Personal goals
• Leadership goals
• Departmental goals
• Institutional goals
• What means are needed to achieve your goals?

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Why generate revenue?
Faculty Development

• Protected time
• Seed money and bridging money for research
• Additional training
• Infrastructure
• Building new areas for practice, research, and
  education
• Reserves for the future

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Individual Gain Versus Group Gain
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The Future of Academic Health Care
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Life Expectancy and Expenditure per Capita
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Cost of Care Percentage of GDP
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The Economic Future of Emergency MedicineWill ED
utilization and clinical revenue change?

• Risk contracts
• Effect of co-pays
• Patient behavior during hard times
• Reimbursement for professional services
• EMRs and patient per hour speeds

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Economics of Academics

• Hospital and medical school funds flow
• Federal funding of research
• Industrial funding of research
• Professional societies
• Development

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Although prepared for martyrdom, I preferred
that it be postponed.
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Know Your InstitutionWho controls the money?

• Clinical income?
• Consultations?
• Indirect reimbursement for grants?
• Societal and industrial grant revenue?
• Moonlighting?

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Practice PlansMushroom Management

• Kept in the dark
• Fed bullshit
• When grown big, canned
• Loss of transparency ? Loss of trust
• Personal goals predominate over departmental
  goals

Revenue generation is other people
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Practice PlansThe Philosopher King or Queen

• Trustworthy and equitable leader
• Inspires a shared vision in those they lead
• Can produce remarkable revenue growth
• Depends on the skills of the leader rather than
  the system

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Practice PlansThe Secret Life of the Bees

• Staff specialized into academic or clinical
• Academic track receives lion share of development
• Loss of shared incentives
• Revenue generation depends on limited number of
  members in the group

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Practice PlansPartnership with the Faculty

• Shared vision established as a group
• Complete financial transparency
• Mutual trust
• Taxation with representation
• Eat what you kill after taxes

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Revenue Generation Golden Rules

• One should treat others as one would like others
  to treat oneself
• The one with the gold, makes the rule
• You cant make up negative margins with volume
• Lost indirect revenue sinks departments
• What do you call academic activities that cannot
  lead to revenue generation?

Hobbies
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Sources of Revenue

• Areas that you control financially
• Incentives based on performance
• Negotiations with your leadership

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Principles of Departmental Taxation

• Equity tax everything!
• Incentives size matters
• Transparency maintain trust
• Representation

Taxation with representation ain't so hot
either. Gerald Barzan
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No Margin, No Mission

• Sister Irene Krause
• Daughters of Charity

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Sources of Revenue
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Classic Sources of Revenue
Administrative
Grants
Education
Clinical
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Revenue GenerationClinical Every penny counts

• Easiest and most lucrative source
• Clinical revenue vs. cost of a provider
• Quality of documentation
• Coding, billing, and revenue cycle
• Knowing who the customer is ?volume growth

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Revenue GenerationClinical Diversifying
Clinical Income

• Observation units
• Emergency department contracts
• Urgent care
• Ultrasound

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Revenue GenerationClinical Subspecialization

• Toxicology
• Hyperbarics
• Sports Medicine
• Urgent Care
• Hospitalists
• Intensivists

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Funds Flow Institution vs. Faculty
Research
Clinical
Education
Administration
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Institutional Funds FlowAdministrative Stipends

• Leadership
• Residency and medical school
• Quality improvement
• EMS
• Hospital committees and positions

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Revenue GenerationInstitutional Funds Flow

• Office space
• Lab space
• Administrative assistants
• Seed money and bridging for research
• Academic titles and affiliations

There ain't no such thing as a free lunch
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Revenue GenerationAdministrative Consulting

• Quality improvement
• Patient flow
• Patient satisfaction
• Revenue enhancement

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Dirty Money Industry

• Hand outs
• Speaker panels
• Meeting sponsorship
• Research Grants

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Institute of Medicine

• A conflict of interest is a set of circumstances
  that creates a risk that professional judgment or
  actions regarding a primary interest will be
  unduly influenced by a secondary interest.

http//iom.edu/CMS/3740/47464/65721.aspx
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Potential Impact of Conflict of Interest in
Practice

• Education introduction of commercial bias
• Research misrepresentation, suppression of data
• Practice compromises professional judgment,
  erodes public trust

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Development Sources

• Development office
• Grateful and ungrateful patients
• Board and trustees
• Alumni

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Revenue GenerationEMS

• Hospital support
• Medical direction
• Municipal
• Private companies
• Fire departments
• Small community EMS
• CME
• Government contracts and positions

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Revenue GenerationEducation Residency

• Building an Education Fund
• for the Residency Program
• Medicare reimbursement for teaching
• Indirects for funded outside rotations
• Residency and research
• Extramural funding for international trainees

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Revenue GenerationEducation

• Speaker reimbursement
• CME courses
• Regional, national, international
• Online education

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Revenue GenerationConsulting and Education

• Clinical simulation
• Residency development
• International activities
• Jump starting academic emergency departments
• Designing training programs
• Train the trainers

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Revenue GenerationResearch

• Value of grant salary vs. clinical salary
• Wet space versus dry space
• Share of the indirect costs
• Federal versus Industry
• Clinical operations and
• future funding

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Revenue GenerationPatents and Royalties

• Know who owns the IP rights and the rules
• Royalties are usually shared between the
  researcher, the department, and the institution
• Creating corporations

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International Consulting
American Medicine Simply the most expensive
way to enjoy health care.
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Emergency Medicine. Thriving through the work
aversion of others