Does Fracture Care Make Money for the Hospital? An Analysis of Hospital Revenues and Costs for Treatment of Common Fractures

Objectives: To determine the relative profitability for a hospital of treatment of common fractures within a state-regulated reimbursement system. Design: Retrospective cohort. Setting: Regional trauma referral center with state-regulated hospital reimbursement system. Methods: We reviewed hospital medical and financial records of 1228 patients admitted from 2008 through 2012 with a principle diagnosis of acute traumatic fracture requiring surgical treatment. Patients whose principle diagnosis fit into 1 of 6 common anatomic categories were included. Sixty-five pelvic, 275 acetabular, 277 hip, 255 femoral shaft, 148 tibial shaft, and 208 ankle fractures were identified. Patients with a different principle diagnosis were excluded. Net revenue, total cost of inpatient care, and direct margin for each patient's acute inpatient hospital course were recorded. Main Outcome Measurement: Direct margins, costs. Results: Per patient, the overall mean net revenue was $39,813, overall mean cost of inpatient care was $21,231, and overall mean direct margin (profitability) was $18,582. Mean direct variable expense was $14,898 per patient, and mean direct fixed expense was $6333 per patient. Factors most influencing cost included length of stay, supplies, and operating room use. Of 1228 patients, 46 (3.7%) had a negative direct margin (net loss to hospital). The most profitable diagnosis was pelvic fracture (mean direct margin, $21,767). Conclusions: The state-regulated reimbursement system allows analysis of hospital profitability in the context of a normalized revenue stream that should approximate the overall fiscal realities of other states. Providing orthopaedic trauma care can be economically feasible and profitable for a hospital. Level of Evidence: Economic Level IV. See Instructions for Authors for a complete description of levels of evidence.