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Comment & Response
August 31, 2016

Economic Impact of Surgical Complications on Hospitals—Reply

Author Affiliations
  • 1Department of Surgery, University of Michigan, Ann Arbor
  • 2Center for Healthcare Outcomes & Policy, University of Michigan, Ann Arbor
  • 3Michigan Surgical Quality Collaborative, University of Michigan, Ann Arbor
  • 4Surgical Innovation Editor, JAMA Surgery

Copyright 2016 American Medical Association. All Rights Reserved. Applicable FARS/DFARS Restrictions Apply to Government Use.

JAMA Surg. Published online August 31, 2016. doi:10.1001/jamasurg.2016.2309

In Reply The letters by Chidambaram et al and Rosenberg et al raise an important point regarding the evaluation of the contribution margin and the total profit margin in the context of hospital cost accounting. Eappen et al,1 in their seminal JAMA article from 2013, studied a 12-hospital system in Georgia demonstrating evidence of perverse financial incentives for hospitals when surgical complications occur. They chose to study the contribution margin, an important factor for the short-term financial well-being of hospitals, for all of the reasons that they have outlined in their study.1 In our study, we chose to primarily evaluate the total profit margin, including fixed costs, as it relates to long-term financial solvency for hospitals. Moreover, this is an important perspective for hospitals at or near full operating room capacity, such as many large academic health systems.

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