The financial impact of multidisciplinary cleft care: an analysis of hospital revenue to advance program development

Abstract

Background: The purpose of this study was to determine the financial impact of cleft care on the hospital and to evaluate trends in reimbursement over the past 6 years.

Methods: Medical and accounting records of 327 consecutive infants undergoing cleft repair between 2005 and 2011 were reviewed. Charges, payments, and direct cost data were analyzed to illustrate hospital revenue and margins.

Results: Hospital payments for all inpatient services (cleft and noncleft) during the first 24 months of life were $9,483,168. Mean hospital payment varied from $5525 (Medicaid) to $10,274 (managed care) for a cleft lip repair (p < 0.0001) and from $6573 (Medicaid) to $12,933 (managed care) for a cleft palate repair (p < 0.0001). Hospital charges for a definitive lip or palate repair to both Medicaid and managed care more than doubled between 2005 and 2011 (p < 0.0001). Overall, mean hospital margins were $3904 and $3520, respectively, for a cleft lip repair and cleft palate repair. Medicaid physician payments for cleft lip and palate were, respectively, $588 and $646. From 2005 to 2006, 2007 to 2008, and 2009 to 2010, 41 percent, 43 percent, and 63 percent of patients, respectively, were enrolled in Medicaid.

Conclusions: Cleft care generates substantial revenue for the hospital. For their mutual benefit, hospitals should join with their cleft teams to provide administrative support. Bolstered reimbursement figures, based on the overall value of cleft care to the hospital system, would better attract and retain skilled clinicians dedicated to cleft care. This may become particularly important if Medicaid enrollment continues to increase.