Financial burdens of trauma centers

Trauma centers grew into existence out of the realization that traumatic injury is a disease process unto itself requiring specialized and experienced multidisciplinary treatment and specialized resources, yet at this day in age, due to the financial burden that trauma centers create for a hospital, there is a scarcity of this essential life-saving center. 69 million people had to travel farther to reach a trauma center in 2007 than in 2001 in the US. For nearly 16 million people, the added distance increased travel times by 30 minutes or longer. Financial problems arose from a combination of treating many uninsured patients who could not pay and having to maintain high-level, life-saving capabilities on round-the-clock alert. In 1990, there were 1,125 trauma centers around the nation. Fifteen years later, 339 had closed, or about 30 percent. That compares to 66 closures between 1981 and 1991.

Trauma care has deep roots in Chicago; the city is considered the home of the country’s firstdedicated trauma center, which opened at Cook County Hospital in the mid-1960s. Gary Merlotti, a trauma director at Mt. Sinai Hospital, helped set up the city’s network. He said at the time, health professionals considered trauma centers “good business” and thought trauma centers would attract prestige, patients, and dollars. The phenomenon was called “trauma creep.” It only took six months for hospitals to realize that “trauma creep” does not really happen. They began to lose money and they began to lose interest in providing trauma care.

By 1988 the University of Chicago pulled out of the trauma care network, citing losses of $2 million a year. The University of Chicago’s departure was part of a cascade of hospitals pulling out: Weiss on the North Side; Loyola on the West Side (although it’s still a trauma center, it is not part of Chicago’s trauma network); and Michael Reese Hospital on the South Side. That meant the only center left to serve Chicago’s South Side was at Advocate Christ Hospital in southwest suburban Oak Lawn. The network was regionalized in such a way that Advocate Christ and the centrally-located centers (Mt. Sinai, Stroger, and Northwestern Memorial Hospitals) agreed to divvy up the stream of South Side trauma patients. Merlotti said the current system works well, but he still wishes the University of Chicago would reenter the trauma center network. He said it is the South Side hospital that is best equipped to take on the financial burden of trauma care. The four hospitals still serving the South Side all said they could take additional trauma patients, but the protestors in front of the University of Chicago are not necessarily arguing for more trauma care, just a more rational distribution. Who cares if there is care available if it takes too long to get to?

Reese hospital officials said the withdrawal of the University of Chicago's trauma center placed a severe financial drain on its hospital and it lost $400,000 in the first three months after the University of Chicago Hospitals withdrew. When the Michael Reese hospital closed in 1989, the county responded by conducting a study that found it would be far too expensive and suggested raising acceptable ambulance transport times to 40 minutes from the current 30 minutes. 

One of the reasons that trauma centers are so expensive is that they are required to treat patients who do not have health insurance. In the mostly African-American low-income sector in question, this translates into an ugly correspondence between race and money. Research shows that the average lifetime patient cost at a trauma care center is 30,000 dollars more than at a non-trauma center. And, it so happens that the centers tend to serve poor, minority communities. In 1990 it was determined it will cost $10 million to put the trauma network back into shape and raising taxes was recommended to help finance the effort. In addition to pushing for bigger state and federal subsidies, increasing user fees such as motor vehicle fines and alcohol taxes were also suggested, but this plan only hoped to raise $2 million. What about the other 8 million? A different city report proposed assessing surcharges on traffic tickets, license plates and drunken-driving fines to pay for higher trauma-care costs. 

The Chicago Medical Center recently reassessed this issue and believes if they currently operated a trauma center it would create approximately $15 million in annual losses. The hospital predicts it would pay for the care of uninsured trauma victims and only get partial government reimbursement for the treatment of Medicare and Medicaid patients. The University of Chicago Medical Center is in better business shape than Advocate Christ or Mount Sinai Hospital, a private medical center on the West Side that has a Level 1 trauma center and currently operates with a financial loss. The University of Chicago Medical Center reported $1.1 billion in 2011 operating revenue. A university report released in June touts that $237 million, or 21 percent, of this operating revenue was redirected to the surrounding community. In addition to the aforementioned life-saving services, money was spent on the treatment of thousands of South Side residents who are uninsured or on Medicare or Medicaid.