Tag Archives: finance

Abstracts, Trauma Center

Best of AAST 2022 #8: Financial Vulnerability Of Trauma Centers

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Here’s another abstract on trauma center / system finance. Trauma centers are part of the safety net in the healthcare systems of many countries. The way they are funded varies tremendously. In the US, health insurance pays most of the bill for patient care. Unfortunately, not all patients are covered, so there is financial risk to the center based on how many underpaying patients present for care.

The group at Scripps Mercy in San Diego performed a financial health analysis of all ACS-verified trauma centers in the US. They applied a Financial Vulnerability Score metric (FVS), although I could not locate anything on this via an internet search. They analyzed the RAND Hospital Financial Database, which is based on information obtained from the CMS Healthcare Cost Report Information System. Using this data they calculated the FVS for each center. They sub-grouped the hospitals into high, medium, and low vulnerability and compared them.

Here are the factoids:

  • A total of 617 trauma centers were identified and analyzed: 194 Level I, 278 Level II, and 145 Level III
  • Level III trauma centers made up 59% of the high financial risk centers
  • The majority of Level I and II centers were in the middle or low risk categories
  • Characteristics of high risk centers were lower number of beds, negative operating margin, and less cash on hand
  • Low risk centers had greater asset to liability ratios, lower outpatient shares, and 3x less uncompensated care
  • The largest proportion of HFR hospitals were in New England and East North Central regions
  • Non-teaching centers had significantly higher financial risk than teaching hospitals (46% vs 29%)

The authors concluded that about 25% of Level I and II trauma centers are at high financial risk and that factors such as payor mix and outpatient status should be targeted to reduce this risk.

Bottom line: This is a fascinating abstract but leaves a lot to the imagination. The databases used have not been used in previous papers, and the information contained in them is proprietary. The FVS is also new and I have not been able to obtain any details.

Nevertheless, if the data and analysis are sound it may provide some new information to trauma centers and perhaps some insight on what factors to address to lessen their financial vulnerability. This is a lot of ifs. Hopefully the authors will enlighten us during the presentation so we can appreciate the real world value of the analysis.

Here are my questions and comments for the authors/presenter:

  • Please explain both the dataset used and the new FVS metric. Most readers and listeners are unfamiliar. We need to see how the data and analysis apply to trauma center financials and how the FVS has been validated.
  • How can the vulnerability factors be addressed? Payor mix is based on patient coverage and their socioeconomic status. It would seem to be difficult to manipulate by the trauma center. Outpatient vs inpatient status is also difficult to change and not fall afoul of CMS rules. What were other factors that were identified that could help centers reduce their financial vulnerability?

This could be an interesting abstract, but there was not enough room in the abstract to reveal all the details. Hopefully all will become obvious during the presentation.

Reference: FINANCIAL VULNERABILITY OF TRAUMA CENTERS: A NATIONAL ANALYSIS, Plenary paper #41, AAST 2022.

General

In-House Trauma Attendings: A New Financial Benefit for Hospitals?

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Many trauma hospitals provide in-house trauma attendings to improve the timeliness of care and to provide housestaff supervision. In many centers, this is required in order to meet the surgeon response requirements for trauma activations. Frequently, this involves some expense for the hospital if they provide an on-call stipend. A study in the Journal of Trauma examined the financial impact housing the surgeons in the hospital at an urban Level I trauma center.

Bellevue Hospital in New York City implemented an in-house attending policy in October of 2007. The study looked at the year prior to and the year after implementation. It focused primarily on the number of operative cases performed during nights and on weekends. The biggest changed noted was a four-fold increase in the number of cholecystectomies performed and 1.2 day decrease in the length of stay for those patients.

Using several financial approximations, they concluded that the hospital received an increased revenue of $854K, while the in-house attending program cost the hospital $750K during the year. The study raises a number of questions, though. The average length of stay, even after in-house attending presence, was 5 days! It would seem that additional savings could be accrued by working on LOS for these patients, as well as other surgical groups. There were other procedures that were done at night that were not analyzed, so there are probably more benefits to be accrued.

The downside of the in-house attendings performing these acute care surgery cases was that their availability for incoming trauma patients was reduced. There were also questions about the possibility of errors when performing surgery at 4AM.

Bottom line: This study shows evidence that there is a financial benefit to having an in-house surgeon. This will be important to hospital administrators who must grapple with the cost of moving to this type of coverage. However, higher quality financial research of this type is also needed.

Reference: In-house trauma attendings: A new financial benefit for hospitals. Pachter, Simon et al. J Trauma 2010;68(5) 1032-1037.

General

Financial Impact Of Solid Organ Injury Management

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The shift in management of adult solid organ injury from primarily operative to mostly nonoperative began in the late 1980s. For the last decade or so, we’ve been refining this management, figuring out failure criteria, the role of interventional radiology, and developing practice guidelines. We know we’ve been able to reduce the number of people that undergo operative management, with an acceptably low failure rate. But is there a financial impact as well?

Surgeons at the MedStar Hospital Center in Washington DC tapped into a huge hospital discharge database from 1994 to 2010. They focused on patients with admitting diagnoses of spleen or liver injury. They looked at relative costs compared to 1994 practice patterns (still quite a bit of operative management), hospital length of stay, and mortality risk.

Here are the factoids:

  • Nearly 30,000 spleen injury records and 15,000 liver injury records were reviewed
  • Nonop management of spleen injury increased from 38% to 67%, and for liver injury from 62% to 81%
  • In-hospital cost of care decreased by over $8,000 for each patient over the study period
  • Hospital length of stay decreased by about 2 days for each patient
  • Mortality in high risk patients dropped significantly (from 64% to 18% for liver, 30% to 20% for spleen)
  • Mortality in low risk patients remained unchanged (2-3%)

Bottom line: Yes, this study suffers from the usual pitfalls of massaging any large multi-institutional database. But what impresses me is that significant changes have been identified, despite huge variations in how nonoperative management is delivered at so many hospitals. As I have mentioned before, at my hospital we were able to show that just adhering to a standardized solid organ injury protocol squeezes yet another $1000 in costs out of each patient treated, on average. Time to adopt a protocol and adhere to it. Your hospital administrators will love you even more!

Related posts:

Reference: The impact of solid organ injury management on the US healthcare system. J Trauma 77(2):310-314, 2014.

General

Financial Triage (Wallet Biopsy) and Transfer to Trauma Centers

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A significant amount of volume coming in to Level I and Level II trauma centers is transferred from other hospitals. Occasionally, concerns are raised that some hospitals “cherry pick” the patients, retaining those who are insured and transferring those who are not. If this is true, it has the potential to undermine the entire trauma transfer system by delaying and impeding patient care and by financially damaging the higher level trauma centers. A few single state or single health care system studies have been performed, and some of them have suggested that the uninsured were more likely to be transferred to high level trauma centers.

The group at Parkland looked at a national sample using the National Trauma Databank, and compared the insurance status of patients transferred to Level I and II centers to those retained at Level III and IV centers. Overall, most patients (83%) were insured. At first glance, transferred patients were significantly more likely to be uninsured (18% vs 14%). However, they were also more seriously injured and more likely to have multiple injuries. When adjusted for these differences, the transferred patients were no more likely to be uninsured than the others.

Bottom line: There does not appear to be any concerted effort nationally to inappropriately transfer uninsured injured patients to high level trauma centers. The perception arises because the uninsured have a tendency toward higher risk behaviors that may result in serious injury.

However, it is possible that cherry picking may occur on occasion at the local level. If you are a trauma director experiencing this phenomenon, the best course of action is to speak directly to the director at the referring hospital. Politely discuss your perceptions and offer to see if there is anything you can do to help with their triage process. Frequently, letting them know you are aware of the pattern causes them to improve their transfer decision making.

Reference: Financial triage in transfer of trauma patients: a myth or a reality. Am J Surg 198(3):e35-e38, 2009.

General

In-House Trauma Attendings: A New Financial Benefit for Hospitals?

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Many trauma hospitals provide in-house trauma attendings to improve the timeliness of care and to provide housestaff supervision. Frequently, this involves some expense for the hospital. A recent study in the Journal of Trauma examined the financial impact of in-house attendings in an urban Level I trauma center.

Bellevue Hospital in New York City implemented an in-house attending policy in October of 2007. The study looked at the year prior to and the year after implementation. It focused primarily on the number of operative cases performed during nights and on weekends. The biggest changed noted was a four-fold increase in the number of cholecystectomies performed and 1.2 day decrease in the length of stay for those patients.

Using several financial approximations, they concluded that the hospital received an increased revenue of $854K, while the in-house attending program cost the hospital $750K during the year. The study raises a number of questions, though. The average length of stay, even after in-house attending presence, was 5.24 days! It would seem that additional savings could be accrued by working on LOS for these patients, as well as other surgical groups. There were other procedures that were done at night that were not analyzed, so there are probably more benefits to be accrued.

The downside of the in-house attendings performing these acute care surgery cases was that their availability for incoming trauma patients was reduced. There were also questions about the possibility of errors when performing surgery at 4AM.

This study shows evidence that there is a financial benefit to having an in-house surgeon. This will be important to hospital administrators who must grapple with the cost of moving to this type of coverage. However, higher quality financial research of this type is also needed.

Reference: In-house trauma attendings: A new financial benefit for hospitals. Pachter, Simon et al. J Trauma 2010;68(5) 1032-1037.