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Study Suggests ACA-Related Insurance Expansion Could Increase Revenue for Trauma Centers by More Than One Billion Dollars

Posted May 5, 2017

Understanding the potential impact of the Affordable Care Act (ACA) on trauma center financial performance is important for trauma surgeons, administrators, hospitals, and policy makers who must navigate the emerging policies and debates regarding continued health policy reform. The passage of the ACA in 2010 resulted in changes in insurance coverage that significantly impacted payer mix and thus financial margins for trauma care.

In spite of these changes, which are still ongoing, there are no existing estimates of the ACA’s potential impact on health insurance coverage for trauma patients, nor national-level changes in payer mix and subsequent reimbursement for trauma centers. A recent study from researchers at the Center for Surgery and Public Health (CSPH) at Brigham and Women’s Hospital estimates that nearly 60 percent of previously uninsured trauma patients would be eligible for private insurance coverage post-ACA, potentially increasing the national reimbursement for trauma centers by over one billion dollars, and nearly doubling the proportion of hospitals with a positive margin for trauma care. The results are published in the May 2017 issue of The Journal of Trauma and Acute Care Surgery.

“At this critical juncture in health reform, it’s important to understand how health policies in general, and increased insurance coverage in particular, are affecting trauma centers and their ability to care for the patients they serve,” explained John W. Scott, MD, MPH, a fourth-year surgery resident at Brigham and Women’s Hospital, previous fellow at CSPH and first author of the study. “Our research suggests that the expanded insurance coverage resulting from the ACA could deliver significant financial benefits for trauma centers, especially those that care for the highest proportion of uninsured and minority patients.”

The researchers used the Nationwide Inpatient Sample (NIS) during 2010—the last year prior to most major ACA coverage expansion policies—and analyzed all uninsured trauma patients aged 18-64. They calculated national and facility-level reimbursements and trauma-related contribution margins using NIS-supplied cost-to-charge ratios and published reimbursement rates for each payer type. Using US Census data, they developed a prediction model to determine the proportion of pre-ACA uninsured trauma patients that would be expected to gain private insurance, Medicaid, or remain uninsured after full implementation of the ACA. Finally, they estimated the impact of these coverage changes on national and facility-level trauma reimbursement for this population.

Their model predicted that 57.9 percent of previously uninsured 18-64 year old trauma patients would be eligible to gain private coverage, 19.7 percent would be eligible for Medicaid, and 22.4 percent would not be eligible for either. Assuming 75 percent enrollment, this corresponds with 43.4 percent of the previously uninsured gaining private coverage, 14.6 percent gaining Medicaid, and 41.8 percent remaining uninsured. Due to the corresponding changes in payer-mix, they estimated that trauma centers could receive over one billion dollars in increased revenue for providing the same care, corresponding to a more than 9 percent absolute increase in profit margin nationally. At the facility level, they estimated that the proportion of hospitals delivering margin-positive trauma care – a critical determinant of financial sustainability – would nearly double from less than 35 percent to over 65 percent.

“This study is an important step toward understanding how insurance coverage expansion, like what we’ve experienced through the ACA, is affecting the financial solvency of trauma centers,” said Adil Haider, MD, MPH, Kessler Director of CSPH at BWH, and senior author of the publication. “Future research must assess the impact of insurance coverage expansion not just on trauma centers and their patients’ access to care, but also on the clinical outcomes of those patients.”

There was no funding received for this work; funding sources for each author are disclosed in the full publication.

This paper is scheduled as a plenary oral presentation at the AAST 75th Annual Meeting of AAST and Clinical Congress of Acute Care Surgery to be held in Waikoloa, HI, September 14-17, 2016.

Source: BWH

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