those outside the academic medical center
environment. ARDs typically have both
multiple sources of financial support or
subsidies and overhead costs/fees related
to their affiliation with hospitals/health
systems and medical schools. Sources of
support besides patient clinical revenue
and contracts include institutional support for teaching, administration and
research, and extramural research dollars. Expenses besides salaries and benefits include medical school taxes (Dean’s
Tax, and allocated expenses by the health
system, hospital and/or group practice).
Since ARDs may be part of a multispe-cialty practice plan, allocated expenses for
billing and malpractice insurance costs
may be outside the control of the radiology department. This results in various
revenue sources and expenses that are not
available to or incurred by private practice radiology departments.
One study on cost accounting in the
business of radiology determined that
the probability of future revenue streams
would remain flat. 10 This fact is reiterated
by another paper that described a probable decline in radiology revenue due to
future long term reductions in imaging
utilization. 11 Thus, obtaining financial
information on operating costs in radiology departments is crucial. Another article
provided detailed information on the costs
of teaching, research and clinical activities
in a Midwest radiology department as a
model for cost identification. 12 Moreover,
other reports have described the use of performance, financial, and quality indicators
in academic radiology departments. 13-15
The results of the present study sug-
gest that there is variation in depart-
mental subsidies and overhead costs
that varied by region and hospital size.
Although the number of significant pro-
portional differences when evaluated by
region and hospital size was relatively
small, several trends were discovered.
ARDs affiliated with hospitals smaller
than 200 beds tended not to receive hos-
pital based funding. This may be related
to the amount of income available at
smaller institutions and may put these
ARDs at a significant revenue disadvan-
tage. However, expense variables when
compared by affiliated hospital size did
not provide any significant results. This
may be related to similar cost structures
that occur regardless of institution size or
sample size restrictions.
A greater number of proportional
differences were discovered when ARD
expenses and subsidies were evaluated
by geographic region. A greater number of ARDs in the Northeast pay higher
malpractice rates than some regions but
proportionally pay lower Dean’s Tax
and a larger number receive funding for
teaching from their affiliated hospitals.
A greater proportion of ARDs in the
Midwest pay high Dean’s Tax rates, but
a larger number receive higher levels of
funding from their medical schools for
teaching when compared to those ARDs
in the Northeast. These differences may
be related to a number of factors including state and local tax structures and
regional accounting requirements.
The goal of evaluating CODB is
to compare sources of revenue and
expenses with those institutions in a
particular geographic area or institution
of similar size. The value of the information provided by this survey would best
serve academic departments of radiology
by allowing them to evaluate where they
stand in relation to other departments in
similar circumstances. After evaluation,
they may choose to analyze their situation and devise methods for improving/
identifying sources and rates of income
or compare their situation to those presented here to re-evaluate/reduce institutional expenditure rates.
The questionnaire used for this study
focused on streams of revenue that ARDs
receive and their costs. However, some
authors suggest that in this age of managed care and managed education, cost
based models of activity are obsolete
and analyses should be based on return
on investment (ROI) or revenue only. 3, 16
In general, the responding ARDs did not
indicate that ROI methods were utilized
in the responses collected.
The results of this study were limited
by the number of responses received.
Thus, the results presented may not be
indicative of the total membership of
SCARD. Although response rates of 30%
are considered to be acceptable for online
surveys, a higher response rate in this
case would have allowed a more detailed
analysis to occur. 17
The results of this study and the questions in it were designed to be used as a
model for initial data collection and analysis by ARDs for their own CODB analysis. Individual ARDs may be able to utilize
the questionnaire and the survey data as a
foundation for a more individualized and
relevant CODB self analysis
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2001;218( 1): 25–6.
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Ensuring Quality through Appropriate Use
of Diagnostic Imaging [Internet]. AHIP;
2008 Jul page 1–12. Available at: http://www.
ahip.org/about/. Accessed August 15, 2013.