Trauma services: a profit center?

Abstract

Background: Previous studies have demonstrated inadequate reimbursement for severely injured patients with a resultant negative economic impact for the trauma service and hospital. The purpose of this study was to assess the total cost of care for all injured patients discharged from the trauma service in fiscal year 1997, and to determine the proportion of costs for the most severely injured on total cost. In addition, we assessed the total service costs and the revenue for treatment of the most severely ill. The final result was the determination of the profit (loss) margin for the entire service. Study Design: All patients discharged from our Level I Trauma Center in fiscal year 1997 were included (n = 696). The population was then stratified into 2 subgroups using the Injury Severity Score (ISS). Patient grouping was facilitated by integration of the trauma registry with the hospital cost accounting system. The population was sub-divided into 2 distinct groups. Group A represented all patients with an ISS > 15 (n = 192). Group B contained all patients with an ISS < 15 (n = 504). Length of stay and mortality of each group was recorded. Cost of care was determined by the hospital cost accounting system TSI (Transition System Incorporated, Boston, MA), which is designed to generate cost center data on a cost per patient basis. Total costs were determined for the entire population and Groups A and B. The proportion of costs consumed by each group was then calculated. Reimbursement was determined by calculating expected payments for each patient. These calculations are based on previously agreed upon allowances from each insurer and are reconciled at the end of each fiscal year to ensure accuracy. Results: The average length of stay for the population and Groups A and B were 7.5, 9.8, and 6.7 days respectively. Mortality in each group was 9.7%, 19.3%, and 6%. Over 92% of the population sustained blunt mechanism injury and only 8% were penetrating. When controlled for length of stay, the profit margin for Group A is $1,242/day and for Group B is $519/day. Comparison of mean cost/patient between Group A and Group B was $35,727 versus $17,623, respectively. Conclusion: Trauma centers can be profitable. Group A is responsible for 44% of the total service cost while accounting for only 28% of the discharges. Moreover, this group is responsible for 57% of the profit, and yields the greatest return. The ability to care for the sickest patients, while enormously costly, is essential to the economic viability of the trauma center and its future growth.