of cross-subsidies from commercial payers and supplemental payments they receive from Medicaid disproportionate share (DSH) and upper-payment-limit (UPL) programs, which compensate them for about 25 percent of their unreimbursed care. Without these payment streams, she said, “These providers would have minus 10 percent margins. They would be completely unviable as organizations.”
In a brief analysis of emergency department (ED) and trauma care financing and profitability, Fagnani said she examined data from the University HealthSystem Consortium (UHC), which shares about 30 members in common with NAPH. She was very surprised to learn that trauma patients tend to have a higher commercial payment mix (33 percent) than regular ED cases (26 percent). However, she said, this depends heavily on provider location. Areas that receive more penetrating trauma (e.g., knife and gunshot wounds related to violence) compared to blunt trauma (mostly caused by motor vehicle crashes or falls) have a very variable payer mix that ranges from 7 to 62 percent commercial payment. Regarding ED visits, she said that commercial payment ranged from 5 to 51 percent. Not surprisingly, she said, there were significant profit margins on the commercial patients and significant losses on treating patients covered by Medicare and Medicaid and, in particular, the uninsured.
Fagnani said that the hospitals she represents would clearly stand to benefit from regionalization, because “payer class would not be a consideration if you are regionalizing based on patient need.” But then, she added, there are also issues regarding these major trauma centers and whether they have the capacity to handle more of the higher-level trauma and emergency cases.
She said that her members are focusing on these issues and making improvements on ED throughput. Many have been participating in a study by the Commonwealth Fund on that topic. She added, “There are clearly things [that are] within the control of these systems [in] addressing their capacity issues, but then there are other things that aren’t in their control, such as discharge issues with uninsured patients needing long-term care and the availability of on-call specialists—all the kinds of things that the IOM study pointed out” in 2006.
Jane Englebright, chief nursing officer and vice president of the Clinical Services Group at the Hospital Corporation of America (HCA), described HCA as an investor-owned heath care company with 163 hospitals, 109 surgery centers, and almost 400 physician practices. Most of the hospitals are community hospitals, although they have one regional burn center, three Level I trauma centers, and three critical access hospitals. By