Comprehensive breast reconstruction in an academic surgical practice: an evaluation of the financial impact

Abstract

Background: This study assessed the financial implications of providing all forms of breast reconstruction at a single academic institution with insurance as the primary mode of reimbursement.

Methods: Billing records of 152 patients who underwent postmastectomy breast reconstruction offered at the University of Michigan for the 2012 fiscal year were reviewed. Professional and facility revenue, cost, and earnings for the first stage of reconstruction were calculated by applying actual collections and charges. Similar financial data were compiled for a subset of 49 patients who went on to complete reconstruction.

Results: The professional revenue and expenses allocated to breast reconstruction were $647,437 and $591,184, respectively (8.7 percent margin). Health care system facility revenue and costs were $2,762,797 and $2,773,131, respectively (-0.4 percent margin). Physician reimbursement by surgical time was highest for delayed tissue expander placement ($3505 per operating room hour). Abdominal free flap reconstructions resulted in greater professional revenue for the first stage of reconstruction ($7801 versus $2961) and for completed reconstructions ($14,943 versus $7703) relative to implant reconstructions. The facility also did better fiscally after the first stage of abdominally based reconstruction compared with implant reconstructions (10 percent versus -10.4 percent margin).

Conclusions: Postmastectomy breast reconstruction for this academic surgical practice remains fiscally profitable. Implant-based reconstruction compared with abdominal flap reconstruction produces greater revenue per operative hour but ultimately generates less total revenue and results in financial losses for the facility. Abdominally based perforator flap reconstruction reimbursed through standard insurance plans can be financially advantageous for the academic surgical practice and health care system.

Figure 1

Distribution of breast reconstruction types

Figure 2

Professional revenue generated per operating room hour for the first stage of reconstruction