Prenatal Care Models in a Resident Clinic: An Analysis of Cost

Abstract

Objectives: The objectives of this analysis were threefold. First, we sought to apply basic cost accounting and analysis to a resident clinic setting. Second, we sought to create a model for cost accounting that could be applied to obstetric care. Third, a secondary analysis was generated in order to determine which model of modern prenatal care is most lucrative in the setting of a resident clinic.

Methods: The methods applied can best be described as a basic cost accounting. Background information on the logistics of our resident clinic will be helpful in understanding the methods of this study. This study analyzed costs and revenue from the Aultman Hospital affiliate, My Community Health Clinic, which operates solely as an outpatient, resident-staffed, clinic.

The cost of providing prenatal care in our resident clinic is extrapolated from a fixed budget for resources and the estimated time, in hours, spent providing prenatal care. By using the amount of time available to provide prenatal care and applying the cost budgeted to provide each hour of prenatal care we are able to calculate the revenue generated by prenatal care in the resident clinic. To simplify our calculation of revenue, we equated reimbursement with revenue. Furthermore, we used Medicaid reimbursement for our revenue equivalent.

Three models of prenatal care were analyzed: traditional prenatal care, low-visit prenatal care, and group prenatal care. For each model of prenatal care, the time spent for each visit and the number of hours available for prenatal care each year were used to calculate the number of patients that could be seen each year for that particular model.  After figuring out patient care hours, cost of running the clinic per hour, and reimbursement per patient care hour, the revenue for the clinic can be extracted for each prenatal care model.  Our secondary objective was to determine if increasing the number of patients seen with the group prenatal care model would significantly change yearly revenue or decrease the current revenue deficit that our clinic suffers from. In order to analyze potential change in revenue, the same calculations used for 6 patient group were then applied to a theoretical 8 patient group and 10 patient group for the 2 hours of allotted group care. The change in revenue for larger groups was then added to the revenue for 2 hours of traditional prenatal care added to the 2-hour group sessions. This allowed for increased revenue and decreased cost to revenue deficit.

Results: For traditional care model $558,720 in revenue is possible for one year. The traditional prenatal care model ultimately yielded a negative value of $222, 597.70 or a 28% deficit on an annual basis. For the low visit model and group prenatal care (when combined with traditional care) a 31% deficit resulted for both of these models.

The secondary analysis revealed that increasing patient group size to 10 patients would cut our yearly deficit in half, resulting in a 14% deficit. Increased group size therefore has the potential to increase revenue by 17%.

Conclusions: Understanding health care costs in a resident clinic can be achieved with a basic cost analysis. Each year the highlighted resident clinic operates at a deficit in order to provide prenatal care. Without decreasing our fixed costs, opportunity for increased revenue lies with increasing patient volume, especially while utilizing group prenatal care.