CASE STUDY: TAVR Halo Effect at a Community Hospital
For hospitals to fully understand the financial performance of a transcatheter aortic valve replacement (TAVR) program, they need a complete picture of the monetary flows—screening through intervention—associated with the program. While the revenues and costs generated by the TAVR procedure itself may be obvious, monitoring the revenue of the ancillary services provided in the treatment and follow up care are also an important component of the TAVR program. These ancillary services should be included in the program’s financial analysis. A benefit of including them is that their often-positive margins create a “halo effect” that can significantly improve the program’s overall return. Consistent tracking is the key to capturing the halo effect. This case study describes how Bronson Methodist Hospital in Kalamazoo, Michigan, tracks revenue from services linked to its TAVR program in order to document the program’s halo effect. At Bronson, TAVR procedures themselves initially produced a slight negative contribution margin, but from the outset, a group of associated tests and procedures have contributed solidly positive margins to the TAVR program. Specifically, the halo effect comes from tests performed during the TAVR screening workup and from non-TAVR procedures that some screened patients subsequently receive. The hospital has developed systems to track these additional services quarterly.
TAVR at Bronson Since performing its first TAVR procedure in November 2012, Bronson has seen the program grow steadily each year (see chart). Carmela Pulling, MA, BSN, RN, has been the TAVR program coordinator since the inception of the program and says that in the beginning it was challenging for Bronson, a community hospital, to obtain TAVR patient referrals. Unlike
Annual TAVR Procedures 50 45
40 30 20 10 0
28
30
2013
2014
6
2012 (Nov.-Dec.)
2015
“ In order to understand the full financial impact, it is imperative to consider the ‘halo’ or indirect revenues that are attributable to a program.” –R ebecca East, CPA, MBA, FHFMA, senior VP and chief financial officer, Bronson Healthcare Group