In the five years since the passage of the Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or, colloquially, “Obamacare,” the calculus for trauma center economics and growth has been upended, and not necessarily in the best interests of trauma patients or the healthcare community.
By 2016, over 18 million persons have acquired some form ofhealthcare coverage, many through expansion of Medicaid in their state. The holdouts, numbering 19 with Montana choosing to convert to Medicaid expansion in 2015, located mostly in Republican governed states, have a 5-times higher potential for lacking a fully developed trauma system. Of the 30 Medicaid expansion states, 19 have either regional or localized trauma center access (62 percent), whereas of 19 states opting out of Medicaid expansion, only two states have a near fully implemented trauma system with few areas where trauma center access is limited (11 percent).
That there is a relationship between financial viability and trauma center status has been accepted for decades, but debates have emerged about arising competition and billing practices with the addition of more funded patients.
Follow the money
Since the first regional trauma systems began in the late 1970’s in California and Texas, the ongoing concern until recently was that trauma centers were not financially viable. They were instead valued mostly for their role in physician education and research, and as hospitals of last resort for charity care. Some areas developed regional trauma systems through the efforts of charismatic and dedicated trauma surgeons, more often at trauma centers with air medical resources. By 1995, there were only five recognized statewide trauma systems in the US despite regional and national efforts to legislate systems in most states.
Part of the problem with trauma system development was that by the 21st century, only four states with trauma system legislation (Illinoi, Pennsylvania, Texas and Washington) had any substantial trauma center funding; often derived from traffic fines. Without funding, and accompanied by high levels of un- and, under-insured patients, trauma centers were subject to closures or downgrading to a lower level of resources.
Between 1990 and 2005, the number of trauma centers fell sharply from 1,125 to 786, according to a 2011 Health Affairs study co-authored by Dr. Renee Hsia, professor and director of health policy studies at the University of California at San Francisco’s Emergency Medicine Department. The number of trauma center closures and downgrades was the most commonly asked question about trauma centers by the media and government until passage and implementation of PPACA.
Another factor squeezing dollars out of the trauma system is the high cost of air medical transport. With most services privately owned, they’ve been extremely quick to bill their liftoff services by $25,000 – or more – and loaded on milage fees. These bills for the immediate care and transport of the injured patient often eat up every dollar of auto liability insurance, which usually is capped at $25,000 at best. Hospitals are further hampered because they cannot bill until after patient discharge, so they are at the end of a long line of EMS, flight services, physicians and other independent providers.
Another area where academic Level I trauma centers are disadvantaged is the high percentage of patients arriving from interhospital transfers who then undergo long lengths of stay. These patients are the most expensive, and least likely, to be fully reimbursed by private insurance unless the trauma center is on an excellent payor rich pathway. Research has shown a self-pay patient is more likely to be transferred to a high level trauma center than a similarly injured patient who has insurance.
Read the complete report in the Feb/March 2016 issue of Homeland Security Today.