OBJECTIVES: To examine hospital, trauma system, and reimbursement factors that offset the financial burdens of trauma care delivery and to assess how proposed Medicaid and Medicare budget cuts may affect the ability of hospitals to alleviate financial pressures related to trauma care delivery. DESIGN AND SETTING: In-depth interviews and data collection for trauma centers in 12 metropolitan areas with populations of 1 million or more. PARTICIPANTS: Seventy trauma centers in these large urban communities that indicated a continuing commitment to providing trauma services for the foreseeable future. MAIN OUTCOME MEASURES: Hospital, trauma system, and reimbursement characteristics that distinguish hospitals that are better able to alleviate the financial burdens of indigent trauma care and a financial analysis that assesses payment adequacy for different payers and overall financial outcomes. DATA SOURCES: Data from a variety of sources were obtained to measure the factors that affect the operation and financing of trauma centers: published and unpublished hospital data from the American Hospital Association; trauma center level, length of operation, and the availability of alternative centers from a recently published study; Health Care Financing Administration data on Medicare and Medicaid program characteristics; automobile insurance requirements; and patient discharge data. Most data are reflective of 1992. RESULTS: Public hospitals, teaching hospitals, and institutions receiving supplemental indigent care payments appear to be best able to mitigate the financial burdens of uncompensated trauma care, especially those with moderate indigent care loads. A detailed financial analysis found that private hospitals with trauma centers were near break-even in 1992 for trauma care delivery and public hospitals experienced financial losses. Proposals to reduce Medicaid and Medicare would create substantial reductions in hospital payments for hospital-wide patient care and trauma patients specifically. CONCLUSION: Proposed Medicaid and Medicare payment cuts are likely to eliminate the delicate financial balance that many urban hospitals have achieved in providing trauma care. The erosion in funding from public programs may portend a new wave of trauma center closures as hospitals seek to deal with reduced reimbursement by eliminating unprofitable services.
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