I was going through the MD Buyline database and found that endoscopy technology costs have been increasing at a rate of 3 to 4% per year. Add this to the 1.5% increase in labor costs and it becomes apparent that you need to keep a close eye on your GI lab budget.
The good news is reimbursement has been tracking closely with the increasing costs. In 2007, CMS reimbursed $538 (APC 0143) per colonoscopy. Now it is $636, a 15% increase. But, when I ran the costs and reimbursement levels in a ROI calculator, the margins were just about the same. So, what can a hospital do differently to increase their margins? As in most healthcare cases, it boils down to cutting costs and increasing volume.
Each year, there are approximately 14 million colonoscopies performed in the U.S. and about half are for screening. The aging population and the improved outcomes from screening (screening decreases colon cancer by 17%-54%) should continue to increase utilization.
Additionally, there is a wide range of negotiable costs that include both capital and consumables. Discounting for capital can vary by 10%; consumables, 10 to 30%. With these numbers, your margins increase $30 per procedure. Although that doesn’t sound like a lot, over three years, that’s $230,000.