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

Abstract

Managed care and governmental policies have restructured hospital reimbursement. We examined reimbursement trends in trauma care to assess the impact of this market driven change on an urban academic health center. Patients injured between January 1997 and December 1999 were analyzed for Injury Severity Score (ISS), length of hospital stay, hospital cost, payer, and reimbursement. Between 1997 and 1999, the volume of patients with an ISS less than 9 increased and length of stay decreased. In addition, overall cost, payment, and profit margin increased. Commercially insured patients accounted for this margin increase, because the margins of managed care and government insured patients experienced double-digit decreases. Patients with ISS of 9 or greater also experienced a volume increase and a reduction in length of stay; however, costs within this group increased greater than payments, thereby reducing profit margin. Whereas commercially insured patients maintained their margin, managed care and government insured patients did not (double- and triple-digit decreases). Managed care and current governmental policies have a negative impact on urban academic health center reimbursement. Commercial insurers subsidize not only the uninsured but also the government insured and managed care patients as well. National awareness of this issue and policy action are paramount to urban academic health centers and may also benefit commercial insurers.