Modern Healthcare: In alleged healthcare ‘money grab,’ nation’s largest hospital chain cashes in on trauma centers
By Jay Hancock
June 14, 2021
After falling from a ladder and cutting his arm, Ed Knight said, he found himself at Richmond, Virginia’s Chippenham Hospital surrounded by nearly a dozen doctors, nurses and technicians — its crack “trauma team” charged with saving the most badly hurt victims of accidents and assaults.
But Knight’s wound, while requiring about 30 stitches, wasn’t life-threatening. Hospital records called it “mild.” The people in white coats quickly scattered, he remembered, and he went home about three hours later.
“Basically, it was just a gash on my arm,” said Knight, 71. “The emergency team that they assembled didn’t really do anything.”
Nevertheless, Chippenham, owned by for-profit chain HCA Healthcare, included a $17,000 trauma team “activation” fee on Knight’s bill, which totaled $52,238 and included three CT scans billed at $14,000. His care should have cost closer to $3,500 total, according to claims consultant WellRithms, which analyzed the charges for KHN.
HCA Healthcare’s activation fees run as high as $50,000 per patient and are sometimes 10 times greater than those at other hospitals, according to publicly posted price lists. Such charges have made trauma centers, once operated mainly by established teaching hospitals, a key part of the company’s growth and profit-generating strategy, corporate officials have said. HCA’s stock has doubled in three years. The biggest U.S. hospital operator along with the Department of Veterans Affairs, HCA has opened trauma centers in more than half its 179 hospitals and says it runs 1 of every 20 such facilities in the country.
And it’s not slowing down.
HCA “has basically taken a position that all of their hospitals should be trauma centers,” said Dr. Robert Winchell, describing conversations he had with HCA officials. Winchell is a trauma surgeon and former chairman of the trauma evaluation and planning committee at the American College of Surgeons.
Trauma patients are typically those severely injured in automobile accidents or falls or wounded by knives or guns.
State or local regulators confer the designation “trauma center,” often in concert with standards verified by the American College of Surgeons. The status allows a cascade of lucrative reimbursement, including activation fees billed on top of regular charges for medical care. Trauma centers are mostly exempt from 1970s-era certificate-of-need laws enacted to limit excessive hospital spending and expansion. The bills for all this — reaching into tens of thousands of dollars — go to private insurers, Medicare or Medicaid, or patients themselves.
“Once a hospital has a trauma designation, it can charge thousands of dollars in activation fees for the same care seen in the same emergency room,” said Stacie Sasso, executive director of the Health Services Coalition, made up of unions and employers fighting trauma center expansion by HCA and others in Nevada.
HCA’s expansion into trauma centers alarms health policy analysts who suggest its motive is more about chasing profit than improving patient care. Data collected by the state of Florida, analyzed by KHN, shows that regional trauma cases and expensive trauma bills rise sharply after HCA opens such centers, suggesting that many patients classified as trauma victims would have previously been treated less expensively in a regular emergency room.
Patients admitted to HCA and other for-profit hospitals in Florida with a trauma-team activation were far more likely to be only mildly or moderately injured than those at not-for-profit hospitals, researchers have found.
HCA is “cherry-picking patients,” said Ed Jimenez, CEO of the University of Florida Health Shands, which runs a Level I trauma center, the highest designation. “What you find is an elderly person who fell and broke their hip who could be perfectly well treated at their local hospital now becomes a trauma patient.”
HCA’s trauma center expansion makes superior care available to more patients, providing “lifesaving clinical services while treating all critically injured patients,” said company spokesperson Harlow Sumerford.
Richmond’s population “is booming,” said Chippenham spokesperson Jeffrey Caldwell. “This increase in demand requires that the regional healthcare system keep up.”