Financial Impact of Emergency Hand Trauma on the Health Care System

BackgroundThe US has a crisis of insufficient emergency coverage for hand trauma. One of the problems is the perceived financial loss associated with caring for this population. We evaluated the financial impact of treating emergency hand trauma patients on an academic medical practice and health care system.Study DesignWe examined billing records for 2,632 hand patients seen in the emergency department in 2005 at the University of Michigan. Financial data were separated into inpatient professional and facility revenues and costs. Professional net revenue was calculated by applying actual collection rates to procedural charges. Facility revenue was calculated by applying actual collection rates to the following downstream charge categories: inpatient/operating room (including nursing, anesthesia, and pharmacy), clinic facility, radiology, and occupational therapy.ResultsThe payer mix for this analysis was 60.7% private insurance, 15.3% Medicare, 4.2% uninsured, 8.3% Medicaid, and 11.5% other. The net professional revenue and total costs for physician salary, malpractice, and benefits allocated to hand patients were $698,578 and $574,880, respectively, for a net profit margin of $123,698 (18%). Net health system facility revenue and total costs were $2,420,899 and $2,389,901, respectively, for a net profit margin of $30,998 (1%).ConclusionsHand trauma at this academic medical center is fiscally advantageous for the surgical department and marginally advantageous for the health care system. Providing access to hand trauma patients may be fiscally advantageous in certain settings when the proportion of nonreimbursed care can be controlled.