An academic health center cost analysis of screening mammography: creating a financially viable service.

Overview

abstract

BACKGROUND: The current study sought to determine the institutional financial impact of a screening mammography (SM) program in the context of an integrated cancer center. METHODS: Using administrative databases, 10,048 women were identified as receiving screening mammograms in fiscal year 1999 and the first one-half of fiscal year 2000. The utilization of breast care resources was followed for an average of 1208 days. The University of Michigan cost accounting system was then used to determine overall margin (revenues-total costs) and contribution margin (revenues-actual costs) of the SM program, as well as other breast care services. RESULTS: The percentage of variable costs to total costs for the SM program was 24%. The overall facility losses in the breast care line were $1.7 million with a positive contribution margin of $2.0 million. The annual yield of nonscreening/diagnostic mammographic procedures was 0.9%. All types of radiologic activity failed to cover their total costs, but did provide a positive contribution margin. Overall margins for surgery procedures were approximately even, and adjuvant medical and radiotherapy services were net positive. Modeling helped to identify overhead limits necessary to achieve margin targets associated with increased activity. CONCLUSIONS: The current study showed that SM programs are unlikely to succeed financially without careful selection of those screened to increase the yield of diagnostic and therapeutic procedures. Based on favorable contribution margins, SM programs were viable when viewed as incremental business.