Financial Stability of Level I Trauma Centers Within Safety-Net Hospitals

Abstract

Level I trauma centers often exist within safety-net hospitals (SNHs), facilities servicing high proportions of low-income and uninsured patients. Given the current health care funding environment, trauma centers within SNHs may be at particular risk. Using California as a model, we hypothesized that SNHs with trauma centers vary in terms of financial stability. We performed a retrospective cohort study using data from publicly available financial disclosure reports from California's Office of Statewide Health Planning and Development. Safety-net hospitals were identified from the California Association of Public Hospitals and Health Systems. The primary outcomes metric for financial performance was operating margin. California hospitals with Level I trauma centers were analyzed (11 SNH sites, 2 non SNH). The SNHs did not behave uniformly, and were clustered into county-owned SNHs (36%, n= 4) and nonprofit-owned SNHs (64%, n= 7). Mean operating margins for county SNHs, nonprofit SNHs, and non SNHs were -16.5%, 8.4%, and 9.5%, respectively (p<0.001). From 2010 to 2015, operating margins improved for all hospitals, partly due to increases in the percent of insured patients and changes in payer mix. Nonprofit SNHs had a payer mix similar to that of non SNHs; county SNHs had the highest proportions of MediCal (California Medicaid) (45% vs 36% vs 12%, respectively, p < 0.001) and uninsured patients (17% vs 5% vs 0%, respectively, p < 0.001) compared with nonprofit SNHs and non SNHs, respectively. The majority (85%) of Level I trauma centers are within SNHs, whose financial stability is highly variable. A group of SNHs rely on infusions of government funds and are therefore susceptible to changes in policy. These findings suggest deliberate funding efforts are critical to protect the health of the US academic trauma system.