Financial Effect of a Hospital Outpatient Senior Clinic on an Academic Medical Center

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Abstract
OBJECTIVES: To estimate the billed charges generated for the university hospital (UH) by patients seen in a UH outpatient senior clinic over a 6‐month period. To estimate the average billed charges per geriatric patient generated for the UH over the same 6‐month period. DESIGN: Retrospective analysis. SETTING: Hospital‐based outpatient senior clinic at a university medical center. PARTICIPANTS: Outpatients aged 65 and older. MEASUREMENTS: The total inpatient, outpatient, and professional fee charges generated for the UH by the senior health center (SHC) patients were estimated for a 6‐month period, with the use of billing data from the professional and hospital billing systems. To estimate the multiplier effect and average charges per SHC patient per year, our analysis focused on professional charges generated directly in the SHC and professional fees and hospital charges generated by secondary referral (inpatient and outpatient). RESULTS: One thousand nine hundred ninety‐eight patients were seen in the SHC during the 6‐month period. For every $1 billed in professional charges in the SHC, $17 was billed elsewhere in the hospital system. Geriatric medicine professional charges generated by the 1,998 SHC patients over the 6‐month period totaled $546,691. The 6‐month charges by the rest of the hospital system for the same 1,998 patients included hospital inpatient charges of $4,684,195 for all departments; hospital outpatient charges (ancillary plus technical, including facility fees for the SHC) of $3,027,212; and professional fees of $1,606,287 for other departments, thereby producing a multiplier factor of 17. The average overall charges per geriatric patient per 6 months totaled $4,937, which included hospital inpatient, hospital outpatient, and professional fees. The UH generated an average of $3,860 in hospital charges per SHC patient per 6 months. The average hospital charges generated per established SHC patient per 6 months were $2,936. The average hospital charges for a new SHC patient were $7,187 per 6 months. The average professional charges were $1,078 per patient per 6 months. CONCLUSIONS: This study provides a reasonable estimate of the substantial multiplier, or “flow‐through,” effect of a senior clinic on its parent medical center. Although senior clinics may be a cost center when viewed in isolation, these clinics are actually revenue generators when viewed from the perspective of the entire health system.