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Article |

An Analysis of Revenues and Expenses in a Hospital-Based Ambulatory Pediatric Practice

Jay E. Berkelhamer, MD; Kenneth J. Rojek, MBA
Am J Dis Child. 1988;142(5):551-554. doi:10.1001/archpedi.1988.02150050089040.
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• We developed a method for analyzing revenues and expenses in a hospital-based ambulatory pediatric practice. Results of an analysis of the Children's Medical Group (CMG) at the University of Chicago Medical Center demonstrate how changes in collection rates, practice expenses, and hospital underwriting contribute to the financial outcome of the practice. In this analysis, certain programmatic goals of the CMG are achieved at a level of just under 12000 patient visits per year. At this activity level, pediatric residency program needs are met and income to the CMG physicians is maximized. An ethical problem from the physician's perspective is created by seeking profit maximization. To accomplish this end, the CMG physicians would have to restrict their personal services to only the better-paying patients. This study serves to underscore the importance of hospital-based physicians and hospital administrators structuring fiscal incentives for physicians that mutually meet the institutional goals for the hospital and its physicians.

(AJDC 1988;142:551-554)


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The American Medical Association is accredited by the Accreditation Council for Continuing Medical Education to provide continuing medical education for physicians. The AMA designates this journal-based CME activity for a maximum of 1 AMA PRA Category 1 CreditTM per course. Physicians should claim only the credit commensurate with the extent of their participation in the activity. Physicians who complete the CME course and score at least 80% correct on the quiz are eligible for AMA PRA Category 1 CreditTM.
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