Improving hospital-based programs II.

III. Justify the Program's Existence

"The allied health administrator must be prepared to justify the institution's expense of sponsoring hospital-based educational programs."

--Dan Shock

Those comments were made by a radiography program administrator in an article published in Radiologic Technology in 1990, (20) and they still hold true today. Hospital-based radiography programs exist to educate and train highly qualified radiographers. Doing so without regard to the financial impact a program has on the sponsoring and affiliate organizations ultimately has spelled the demise of many certificate programs. To remain viable, hospital executives must have a clear understanding of the program's financial benefits.

Return on Investment

In business circles, executives weigh the financial impact of an investment based on a projected dollar return over time. This return is simply termed return on investment, or ROI, which is calculated along with intangible benefits in a business case to justify an investment. Executives may decide in favor of an investment if the business case projects an agreeable ROI.

Hospital-based radiography programs are an investment. The sponsoring and affiliate organizations invest time and money in supporting the program. Hospital-based educational programs exist because of the organization's support.

Cost Avoidance

Radiography programs do not necessarily exist just to generate a profit. However, when executives are encouraged to cut costs, such programs are at risk due to their fixed-cost nature. Unfortunately, many program directors have not given due diligence to justifying their programs financially. Financial justification for educational programs is based primarily on avoiding costs that would be incurred if the program did not exist. These costs include but are not limited to:

* Marketing and advertising dollars associated with recruiting technologists or graduates from other programs for vacant positions.

* Orientation expenses associated with a training period for new employees, generally 4 to 6 weeks.

* Temporary staffing costs incurred when the demand for technologists greatly exceeds supply.

* Costs associated with reduced overtime and higher-salary PRN use.

In and of themselves, avoided or reduced costs associated with hiring program graduates cannot justify a program's existence. Programs also must look for revenue streams and cost-sharing arrangements constantly to offset their fixed operating expenses.

Revenue Streams Tuition

Revenue sources alone should not be expected to offset the program's operating expenses, yet they are essential in justifying the program's existence. The most notable revenue source is student tuition. The amount of tuition charged per student should be balanced between keeping the program competitive with the market and offsetting a portion of the program's operating expenses.

CMS Reimbursement

Another potentially significant revenue stream is CMS (Centers for Medicare and Medicaid Services) reimbursement for medical education expenses. The Medicare Code of Federal Regulations, CFR Section 413.85, allows for payments to hospitals under Medicare Part A for the cost of allied health education programs that meet the Medicare definition of approved educational activities. (21) Medicare's share of the hospital's radiography program is determined as a percentage of program costs compared to inpatient and outpatient radiology charges. This reimbursement can offset much of the program's operating expenses and significantly justify the program's existence.

Charitable Sources

Programs also might wish to explore educational grants and charitable sources of funding. Equipment manufacturers and contrast media vendors routinely budget grant money for donations to nonprofit organizations for education and training purposes. Such funding can be very valuable in offsetting expenses associated with the educational process. However, to avoid conflicts of interest, pharmaceutical and equipment manufacturers must follow business practices that meet PhRMA (Pharmaceutical Research and Manufacturers of America) and NEMA (National Electrical Manufacturers Association) guidelines. (22, 23) It would behoove program directors to become familiar with these guidelines and any internal policies on corporate relations before applying for or accepting grants.

Cost Sharing

Interestingly, while the Preston and Comello study revealed that 70.6% of the 160 respondents indicated that their program had multiple clinical education sites, a staggering 75.8% of the 91 respondents who had multiple sites indicated that these sites did not support the program financially.' It is difficult to imagine how a program can yield a positive ROI when clinical sites do not provide financial support.

The nature of the corporate relationship between the program sponsor and affiliated clinical sites will determine the cost-sharing arrangement. If an enterprise-wide structure is developed in which clinical sites are affiliated with the program sponsor and the clinical sites are eligible for CMS reimbursement for program expenses, then those organizations can shoulder a greater portion of program-related expenses. Conversely, if clinical affiliates are not eligible for CMS reimbursement, more of the expenses should remain with the sponsoring entity because those costs will be captured when submitting expenses for CMS reimbursement.

Annual Financial Performance

Once the program has maximized its revenue stream, established a cost-sharing arrangement with affiliated clinical sites and determined what expenses are avoided as a result of hiring program graduates, program officials can determine the overall financial impact the program has on its affiliate organizations.

Determining the annual financial return for the program will depend on an agreed-upon benchmark for comparison, such as total program return relative to no educational affiliation or relative to a college affiliation. A more relevant benchmark would be to compare the hospital-based program with a college-based program affiliation because most hospitals align with some program, given recent and forecasted shortages of technologists. If this is the case, program officials should carve out expenses, such as clinical faculty salaries, that would be incurred if the hospital were affiliated with a college or university program. Thus, when an annual return is calculated, it will represent dollars saved as a result of sponsoring the program as opposed to affiliating with a college or university.

Once a financial return is calculated, program officials must communicate these results to executives in affiliated organizations. Ideally, this communication should be in the form of an annual report.

Intangibles

Hospital-based programs justify their existence in part through the fact that they are not restricted by university credit-hour limitations. This enables students to complete more clinical and didactic contact hours than in comparable associate-degree programs. However, care must be exercised because more clinical or classroom hours do not equate necessarily to greater skill or competency. Program officials must be mindful of accreditation standards involving clinical resources, educational validity of program activities and program assessment of student outcomes. Nonetheless, the additional clinical and class time can be a valuable asset if used conscientiously. This additional clinic time also benefits the organization by allowing it to "try out" students as potential employees. Thus, the program becomes a human resource filter for the organization.

The hospital-based program also justifies its existence through its unique advantage of having core faculty on hand at clinical sites. By having didactic faculty on site where clinical rotations are performed, faculty are better positioned to diagnose student deficiencies and implement correctives as needed. This observation is not meant to denigrate college-based programs, but to elevate this advantage of the hospital-based program.

Other intangible benefits of hospital-based programs include the following:

* Sponsoring and affiliating hospitals have greater influence over program structure, curriculum and operations.

* Program officials can assist imaging departments with the education and training needs of practicing technologists by conducting educational needs analyses and educational in-services.

* Hospital-based programs are well positioned to help affiliate hospitals establish training and education pathways for medical imaging modalities such as sonography, nuclear medicine and mammography.

* Program faculty can serve on department or organizational committees or assume other roles in medical imaging, provided such activities do not negatively affect their primary role as program faculty.

IV. Strategic Vision

"Vision without action is a dream. Action without vision is simply passing the time. Action with vision is making a positive difference."

--Joel Barker

As the hospital-based program evolves in structure and organization, establishes multiple clinical education sites and justifies its existence, program officials must begin to look at other ways the program can support its sponsoring and affiliate organizations and the communities they serve. Hospital-based radiography program officials cannot afford to be myopic regarding the purpose of their existence and must champion the educational needs in medical imaging beyond entry-level radiography training. The program must develop a strategic vision.