Sunday, September 9, 2007

Restructuring Profit Centers

For the past three decades, hospital administrators have operated on the assumption that the operating room is the hospital's profit center. After all, surgical needs help to bring people into the hospital and thereby generate income. A busy surgery department should generate strong billing.

However, recent changes in healthcare administration are forcing an about-face by management. Large hospitals like San Francisco's California Pacific Medical Center are switching from the "operating room as profit center" philosophy to an approach whereby a combination of preventive care and outpatient treatment is rewarded for keeping patients out of the operating room.

This approach could have a severe impact on the income of a surgeon and all those services which support surgical endeavors.

Next: Delegating Authority

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