The impact of managed care and current governmental policies on an urban academic health care center

Business Modeling of Orthopaedic Trauma in the Emergency Department: An Untapped Revenue Stream

INTRODUCTION

Emergency departments (EDs) and emergency medicine and orthopaedic residencies can be faced with financial challenges while caring for patients. Procedures performed by residents are a potentially viable source of revenue that may make orthopaedic coverage of the ED a financially viable service line.

METHODS

A custom text-mining program was created and validated, which allowed evaluation of all orthopaedic resident notes. Procedures performed in the ED were quantified, allowing for the calculation of professional fee billing data. The patients with distal radius fractures were followed after fracture reduction through final outpatient clinic follow-up to identify additional professional fee billing.

RESULTS

Over a 1-year period, more than $445,000 in uncaptured professional fees charged was identified in the 12 most common Current Procedural Terminology codes for splint application and fracture reduction in the ED. More than $395,000 of outpatient professional revenue was received for patients who had reduction of distal radius fractures in the ED.

CONCLUSION

A notable, previously unrecognized and uncaptured source of revenue was identified and quantified. Professional fee billing for distal radius fracture reduction in the ED did not have a negative effect on outpatient professional fee revenue received for these patients.

Orthopaedic traumatology: the hospital side of the ledger, defining the financial relationship between physicians and hospitals

OBJECTIVE

The purpose of the study was to determine the financial relationship between facility and professional revenue for care delivered by two orthopaedic surgeons in a Level I trauma center for patients with multiple orthopaedic injuries.

DESIGN

Retrospective review of medical and financial records.

SETTING

Level 1 trauma center.

PATIENTS

Adult patients admitted with major multiple orthopaedic trauma were included if they had a significant pelvis/acetabulum injury associated with at least 2 extremity fractures, or if they had 3 or 4 extremities requiring surgical care. All patients had limited injury to other body systems, and all had completed their care related to the injury within the study period. We identified 68 patients who met the inclusion criteria. The mean Injury Severity Score was 22.6 (range, 9 to 57) and the mean New Injury Severity Score was 35.9 (range, 27 to 57).

OUTCOME MEASURES

The trauma center has an integrated economy. The surgeons are employed by the hospital, and the information systems for facility and professional services are shared through a unified business structure. Inpatient hospital charges related to the initial trauma admission and subsequent hospital-based outpatient care were abstracted from the Trendstar billing system. All medical and financial records were reviewed to exclude inpatient hospital charges related to the delivery of care by nonorthopaedic services. Orthopaedic professional fees were abstracted from the Epic billing system used for physician services.

RESULTS

The average facility charge was US$96,000, (range, $20,400 to $334,000, SD = $62,000) and the average orthopaedic professional charge was $24,900 (range, $5,200 to $60,300, SD = $14,000). The total facility charge for the study patients was $5,854,602 and the total orthopaedic professional charge was $1,516,568. The average orthopaedic trauma charge multiplier, the dollars of facility charge created by a single dollar of orthopaedic professional charge, was 3.86, (range, 1.35 to 15.2, SD = 3.0). When differences between collection rates were considered, the net revenue multiplier, the dollars collected by the hospital for facility services generated for each dollar collected by the orthopaedic surgeon, was 7.81.

CONCLUSIONS

The majority of the charges and the net revenue related to the care of trauma patients fall on the hospital side of the ledger. The significant multiplier for orthopaedic care delivered in the inpatient setting increases the value of the orthopaedic traumatology service above and beyond the value of the labor component as reflected by the professional fee. Understanding the value of the multiplier in different clinical situations frames the interdependent relationship between physicians and hospitals. Changes in malpractice coverage, declining professional reimbursement and reported difficulties in securing on-call coverage contribute to an emerging crisis in trauma care. The relationship between facility revenue and professional activity provides a firm basis to negotiate institutional support for orthopaedic traumatology.

Discharge Rounds in the 80-Hour Workweek: Importance of the Trauma Nurse Practitioner

BACKGROUND

Daily multidisciplinary discharge rounds have been shown to decrease length of stay (LOS), increase patient volumes, and virtually eliminates "bypass" (inability to accept admissions). Originally, these were attended by senior house staff from each trauma team. Implementation of the 80-hour workweek precluded house staff participation, raising concerns that these rounds would loss their benefits. Certified nurse practitioners (CRNPs) were added to the trauma teams to assist in patient care and represent the team on discharge rounds, replacing the fellows. We hypothesized that this would offset any potential negative effects.

METHODS

A senior trauma physician leads discharge rounds, focusing on each patient's plan of care. Rounds cover 90 inpatient beds and last approximately 60 minutes. CRNPs from each trauma team, orthopedics, and neurosurgery as well as the teams' discharge planner, hospital bed manager, unit nursing staff, and physical, occupational, and speech therapists participate in discharge rounds.

RESULTS

The results are stratified by time period: June 1998 to May 1999 is before discharge rounds, June 1999 to May 2001 is during the house staff period, and June 2001 to May 2004 is when CRNPs replaced fellows and residents. During the 5-year period, 1999 to 2004, daily discharge rounds maintained their efficacy. We have increased admissions, whereas LOS has remained the same. Admissions of greater than 24 hours have increased, whereas average injury severity score has statistically remained the same. Bypass has virtually been eliminated.

CONCLUSIONS

Adding CRNPs to discharge rounds has allowed us to have the continued benefits of decreased LOS and increased patient volume. Bypass remains rare. CRNPs can effectively replace some house staff functions.

Pediatric trauma care: a profitable enterprise?

PURPOSE

We set out to examine whether pediatric trauma care resulted in a financial burden.

METHODS

We reviewed financial data for children with an International Classification of Diseases, Ninth Edition, injury diagnosis code over 2 years at an urban level I pediatric trauma center. We divided inpatients into length of stay categories, and profit or loss was calculated for each payor/length of stay category. These figures were then used to estimate revenue for each hospital based upon their patients payor/length of stay distribution that was obtained from the KID database. Our payor-based outpatient revenue figures were also applied to the other hospital-calculated outpatient visits to obtain an estimate of their outpatient revenues.

RESULTS

We treated 49,437 injured children with a revenue balance of more than $8 million. Commercial insurance resulted in a positive revenue stream. Losses increased as length of stay increased for patients with Medicaid or self-pay. Outpatient encounters resulted in 59% of the revenue. Extrapolating our data, 84% of pediatric trauma centers in 27 states generate an average of $800,000 revenue.

CONCLUSIONS

Pediatric trauma care is a profitable enterprise. Inadequate reimbursement remains for Medicaid and self-pay patients, which could result in financial losses should this proportion of the patient mix be more than 55%.

Trauma/Critical Care Surgeon: A Specialist Gasping for Air

BACKGROUND

In the last 10 years, trauma/critical care has become less attractive because of the decreasing surgical caseload, the nocturnal work hours, and the economics of the practice. Nevertheless, during the same period, the number of verified trauma centers has significantly increased. This study assesses the economic drive behind this dichotomy.

METHODS

Over a 1-year period, we collected financial data on 1,907 trauma patients for both Level I trauma centers and trauma/critical care surgeons. Financial data, including payor source, cost, reimbursement, margin, and reimbursement-to-charge and reimbursement-to-direct cost ratios, were calculated.

RESULTS

For commercial- and government-insured patients, the reimbursement-to-direct cost ratio was 2-and 35-fold greater, respectively, for the trauma centers than for the trauma/critical care surgeons. For uninsured patients, the addition of local government funds allowed the trauma center to cover direct cost with no margin. In contrast, even with the addition of supplemental salary dollars from the institution, for every dollar in direct cost generated by the trauma/critical care surgeons in caring for uninsured patients, they recovered 55 cents, or a loss of 45 cents per direct cost dollar spent.

CONCLUSION

The economic dichotomy that exists between trauma centers and trauma/critical surgeons is significant. It drives institutional growth and, at the same time, discourages surgeons from entering the subspecialty. As physician reimbursement decreases and the number of uninsured patients increases, this economic dichotomy will amplify. Over the next decade, without a significant adjustment, the subspecialty is in danger of extinction.

The financial burden of emergency department congestion and hospital crowding for chest pain patients awaiting admission

STUDY OBJECTIVE

We determined the additional cost of an extended emergency department (ED) length of stay for chest pain patients awaiting non-ICU, monitored (telemetry) beds.

METHODS

This was a prospective cohort study of all ED chest pain patients aged 24 years or older and admitted to a telemetry bed in an urban university hospital during a 12-month period. Structured ED data collection included demographics, chest pain presentation, medical history, and laboratory test and ECG results. Hospital course was monitored daily, followed by a 30-day telephone follow-up. Risk severity scores (Goldman, Acute Cardiac Ischemia-Time-Insensitive Predictive Instrument, and Charlson) were calculated. Hospital charges, real costs, and revenues were obtained at discharge and 2 years later. The main outcome measure was risk-adjusted additional cost to the hospital of a delayed ED admission. Clinical outcome was a secondary measure.

RESULTS

Of the 817 patients with chest pain presenting to the ED during the study period, there were 904 hospitalizations. Of these, 825 patients waited more than 3 hours for their bed (91%). There were 21 patient visits with a final diagnosis of acute myocardial infarction. ED length of stay was not associated with total hospital length of stay (r =0.01), hospital costs, or hospital or professional charges, revenues, or collection rates. The annual opportunity cost in lost hospital revenue for chest pain patients was 168,300 US dollars (204 US dollars per patient waiting >3 hours for a hospital bed).

CONCLUSION

Extended ED length of stay demonstrated no association with total hospital costs or revenues or total hospital length of stay but imposed substantial ED opportunity costs, with decreased potential revenue. Interventions that reduce ED delays in hospital admissions have the potential to significantly increase hospital revenues.

Psychiatric Diagnoses of 901 Inpatients Seen by Consultation-Liaison Psychiatrists at an Academic Medical Center in a Managed Care Environment

The authors reviewed the diagnoses from all inpatient psychiatric consultations conducted by faculty psychiatrists during calendar year 2001 (N = 901) at an academic medical center In about 25% of the consultations, multiple psychiatric diagnoses were made. The most frequent diagnosis groups were mood (40.7%), cognitive (32.0%), and substance use disorders (18.6%). Among 671 consultations in which only one diagnosis was made, the rates of these diagnosis groups were 35.4%, 20.1%, and 10.2%, respectively. The findings were compared with the findings of 19 previous studies published over the past 27 years. Mood, cognitive, and substance use disorders remain major foci of consultation-liaison practice in the managed care era, although the rate of cognitive disorder diagnoses has increased. No evidence was found of a change over time in referral rates.

Daily multidisciplinary rounds shorten length of stay for trauma patients

PURPOSE

Efficient patient care depends on close communication between the trauma team, other surgical providers, nursing, physical therapy, and discharge planners. Communication is hampered by the number of services involved, the workload of each service, and the institution's training mission. We hypothesized that daily multidisciplinary "discharge rounds" would improve patient flow and increase readiness.

METHODS

A senior trauma center physician leads discharge rounds, focusing on each patient's plan of care, including surgeries, diagnostic tests, and anticipated date of discharge or transfer. Present at rounds are the fellows leading each trauma team; an orthopedic surgeon; the hospital bed manager; the unit's discharge planner; the unit nursing staff; and physical, occupational, and speech therapists.

RESULTS

Discharge rounds cover 90 inpatient trauma service beds in approximately 60 minutes each day. Discharge rounds have had a dramatic effect on patient flow. While maintaining the daily census, we have seen a 36% increase in patient volume and a 15% decrease in length of stay. "Bypass" status-inability to accept admissions-has been virtually eliminated. This effect has been sustained.

CONCLUSION

By providing a forum for clear communications among all providers, discharge rounds have streamlined the care of complex trauma patients. As health care resources become ever more constrained, this sort of multidisciplinary effort is a viable option for senior physicians to directly impact hospital performance.

Tertiary care centers: A strategy for fiscal survival

BACKGROUND

Managed care organizations use a variety of payment strategies to contract for high-end tertiary services with academic healthcare centers. We assessed the financial outcome of these strategies and attempted to identify those that maintain a balance between cost and reimbursement.

METHODS

Patients admitted with an Injury Severity Score > or =16, hospital charges > or =$100,000, and a managed care organization as the payer were evaluated.

RESULTS

A fixed reimbursement contract decreased reimbursement by 28% and negatively impacted the margin by 215%. The addition of a stop-loss provision to a fixed reimbursement contract is the best strategy to share the risk between payer and provider. If the fixed reimbursement strategy continued, the negative impact to the margin would have been $36,984 per patient.

CONCLUSIONS

Fixed reimbursement strategies shift all the risk to the academic healthcare center. If volume, severity of illness, or cost is not controlled, they negatively affect the financial outcomes. The addition of a stop loss at $100,000 of charges paid at 40% of the entire claim most equitably distributes risk between the academic healthcare center and the managed care organization. It also excludes the negative impact of increasing severity of illness and volume and should induce cost control.