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  • Title: One respiratory care department's contribution to the 'bottom line'.
    Author: LeBouef LL.
    Journal: Respir Care; 1994 Jul; 39(7):740-5. PubMed ID: 10146054.
    Abstract:
    BACKGROUND: Although many hospital departments that were revenue producers have become cost centers and revenues above expenditures have shrunk, some departments continue to contribute. METHODS: I analyzed the financial statements of our 240-bed, not-for-profit hospital to determine the Respiratory Care Department's actual contribution to the hospital's 'bottom line' (ie, revenue above expenditures). The Respiratory Care Department's financial statement, the Hospital's profit and loss statement, and the financial statements for all 54 hospital departments were reviewed. RESULTS: Analysis revealed that the Respiratory Care Department's revenue dollar contributed $0.095 to the hospital bottom line for each revenue dollar generated. Analysis also demonstrated that the break-even contribution margin for revenue departments was 76.77%. Departments with contribution margins greater than 76.77% were revenue contributors and those departments with less than 76.77% were cost centers. CONCLUSIONS: The Respiratory Care Department was the hospital's largest revenue contributor, generating 42.8% of the hospital's revenue above expenditures. In today's health-care environment, it is sound fiscal reasoning to control cost and to strengthen those departments and services that are responsible for the financial viability of the institution. The results of this study show that our Respiratory Care Department has assumed the leadership role in the economic viability of our hospital and is its most cost-efficient contributor to health care.
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