THE PROBLEMLee Memorial Health System’s Level II trauma center exists as the only one serving the west coast of the state of Florida. The area served by this center includes five counties, and since its inception in 1993 has experienced considerable growth in the number of trauma victims treated. It currently handles over 2000 trauma cases every year. All members of personnel at Lee Memorial are highly trained in the specialized areas of trauma care, making it an institution known for clinical excellence (Lee Memorial, 2006).Lee Memorial is one of the many trauma centers operating in the red because of the high costs associated with keeping such centers at all times optimally prepared for emergencies (Henline, 2006). Preparedness is a very costly aspect of trauma centers’ budgets, as such medical professionals as general, neuro-, orthopedic and plastic surgeons, as well as radiologists, cardiologists, anesthesiologists, and other specialists must be kept on staff at all times in the event of an emergency.
Trauma centers are involved in the provision of medical assistance while transporting trauma patients to and from their centers, and are also involved in accident prevention outreach programs. In addition to staffing expenses, trauma centers place funds into providing for the continued availability of spare resources, such as ICU beds, operating rooms, and other medical equipment (Taheri & Butz, 2002).Though trauma patients are billed like regular patients, their hidden costs are considerable (Taheri & Butz, 2002). One problem lies in the fact that though trauma patients consume a large quantity of resources used by the trauma care centers of a given hospital, the resources are generally of the same type as used by regular non-trauma patients.
These patients are therefore billed in a like manner, though they indirectly incur high levels of additional costs via the need for designated trauma centers to be constantly prepared for emergencies. It is also quite often the case that patients of trauma centers are generally of a lower insurance tier than other patients. This is, as yet, an unexplained phenomenon (2002), but it has been shown that an average of 11% of Floridians treated in trauma centers are without health insurance (Lee Memorial, 2006).A study carried out by Paul Taheri and David Butz (2002) on ten of Florida’s trauma centers demonstrates in detail the nature of their unbillable costs. These are costs that cannot be tied to any one patient, but are inevitably incurred in efforts to keep the center constantly prepared. The costs categories include start-up, on-call coverage for physicians, re-designation, prevention outreach, and miscellaneous.
Start-up CostsThough these are one-time investments, they are generally very large and involves a lengthy process during which the trauma center matures into a self-sustaining entity. Not only does it take years (approximately a decade) for these centers to optimize their operations, but it also takes that long or longer for their finances to show the substantial levels of growth necessary for the continued operation of the center. Start-up costs, therefore, though they vary from center to center, are always considerable (Taheri & Butz, 2002).Physician On-call CostsThe fact that on-call costs are not included in the salaries of many physicians is a recent phenomenon. It is also a very significant one where trauma centers are concerned.
Physicians have now begun to form looser ties to the hospital facilities for which they provide care. In order to maintain an appropriate level of expertise on hand for their trauma centers, hospitals have had to pay additional fees to those physicians who remain on call. Florida trauma centers that pay stipends to on-call personnel report a yearly expenditure of up to $2.18 million, which to general surgeons, neuro-surgeons, and orthopedic surgeons. These specialty areas are the most active personnel in the even of an emergency, and their fees reflect this. Other specialists cost approximately an additional $2.7 million, bringing the total to above $4 million annually for the payment of on-call salaries alone. It is important to note that these expenses are specifically linked to the trauma care aspect of the hospitals’ facility, and would not exist were the hospitals not designated trauma centers (Taheri & Butz, 2002).
Re-designation CostsThe re-designation of a Florida medical facility as a trauma center occurs once every three years, yet the effort that goes into qualification keeps the center continually busy and incurs continual costs. The American College of Surgeons Committee on Trauma (ACS COT) has set certain clinical standards that must be met by any center that wishes to be re-designated. Though Florida also has a separate designation committee, the requirements are very similar. Requirements include reports on every trauma patient that uses the facility, the nature of their trauma, treatment administered, and the outcome of the case. Efficiency is very important, as these centers are compared to others across the country, and the outcome of this comparison determines whether they can continue to be trauma centers (Taheri & Butz, 2002).In order to facilitate the proper recording of all the information required, software specifically tailored for the system has to be purchased, upgraded, and maintained.
Personnel has to be trained in the proper use of the software, and their expertise has also to be continually upgraded to keep up with the changing demands of the Committee as well as the changing face of software. The hospitals also have to form and maintain their own committees for peer review, and these internal organizations also incur costs. Personnel, office space/equipment, and other costs of re-designation have been reported to be as high as $456,000 with a median value of $124,000. This figure is assessed annually (Taheri & Butz, 2002).Prevention Outreach CostsIt is a requirement that all trauma centers provide programs that teach the public how to prevent, minimize, and respond to traumatic emergencies. They are also required to provide like coaching/instruction to facilities that provide a lower tier of care.
In addition, they prepare for mass casualties in the event of local, regional, or national disasters. This preparedness includes plans regarding evacuation, information transfer, and triage. The Florida survey found that outreach costs reportedly amounted to up to $215,000 with a median value of $56,500. This value was determined to be a modest estimate, considering that many of the data items of the survey were left incomplete by respondents. Other personnel costs were simply left out or were accounted for in other sections of the report (Taheri & Butz, 2002).
Miscellaneous CostsRespondents to the survey were given leave to report any unidentified costs that they could describe and quantify. Such costs included aero-medical transportation as well as numerous other costs that were valued at up to $3.9 million for some facilities. The median value is taken at $811,000. This, together with the costs previously listed, has brought the total unreimbursed (because not chargeable) cost of operating trauma centers to a median level of $2.7 million, though it may actually be as high as $8.5 million (Taheri & Butz, 2002).
Lee Memorial Reports that its unreimbursed cost is $5.5 million, after state assistance (Henline, 2006). THE SOLUTIONIn order to redress the overwhelming nature of these costs on Florida’s trauma centers, and especially Lee Memorial, which stands as the only center serving five counties, two opportunities have been identified. It has been noted that 50% of all trauma events occur as a result of traffic accidents. In fact, Lee Memorial reports that “More than 87% of admissions to the LMHS Trauma Center in Fiscal Year 2004 were due to ‘blunt force trauma’ primarily related to auto accidents or falls” (2006). The automobile accidents are often caused by careless driving—and such activities include speeding, disobedience to traffic laws, and driving while intoxicated. Certain measures can therefore be taken to ensure that those who participate in such dangerous acts be required to fund the processes that reverse the disasters that result from them.
In the past, Florida legislators have attempted to raise money for the trauma centers. Two notable ways in which this has been attempted is through an addition of 0.5% to Florida general sales tax, and through a $65 increase on traffic fines for going through red light or driving while intoxicated. The former measure was rejected by voters, while the latter one has not been successful in producing anything close to the kind of revenue needed by the trauma centers. It is therefore perhaps wise not to depend on just one method of revenue collection.
Rather, planners should try to accumulate the funds necessary by seeking a number of opportunities. It is therefore being proposed that the revenue for Lee Memorial Health System’s Level II trauma center be raised through a combination of the following efforts:· An across-the-board increase fines for traffic violations, especially speeding, driving while intoxicated, non-use of seatbelts/car seats, and running red lights.· Increased taxation on alcohol sale and consumption Traffic ViolationsThe Florida Department of Highway Safety and Motor Vehicles has reported 4,766,325 as the total number of traffic citations issued in the year 2005, an overall 9% growth over a two year period (Dickinson, 2006). In that same year, violations for driving under the influence of alcohol amounted to 67,450 cases, an increase of 3% over two years. Citations for non-use of seatbelts totaled 285,203, and for non-use of child restraining devices the number amounted to 13,937. For speeding and careless driving, the number of citations in 2005 totaled 1,457,530. The number of persons caught running red lights was 105,525.
Both represented significant increases over the previous year (2006).These acts have resulted in many serious injuries and deaths. Increasing the fines for these infractions will have a two-fold effect: it will act as a deterrent to drivers and cause them to display more responsibility in their driving, thereby leading to fewer accidents. It will also help to raise much of the revenue necessary to keep the Lee Memorial and other trauma centers running in a time when disasters are sure to occur.Research into the matter has revealed that the minimum fee charged to a DUI offender is $250, as reported by the Florida Department of Highway Safety and Motor Vehicles (2006). This amount increases with the severity of the act and the number of times the offender was previously convicted for the same violation. The gravity of this infraction does warrant an increase in minimum fees of approximately $50.
If this modest fee were to be awarded, using last years figures, an amount of $3,372,500 could be raised for Florida’s Trauma Centers. Along similar lines, a $50 increase in fines for violation of seatbelt laws could raise as much as $14,957,000 throughout the state of Florida. Increases in fines for speeding and other careless driving could produce $72,876,500.
Fines for running red lights could raise $5,276,250. Higher and lower levels of increase in fines and the corresponding revenue increase are shown below: InfractionAmount of Increase$100$50$25$15Driving while Intoxicated$6,745,000$3,372,500$1,686,250$1,011,750Seatbelt Violation$29,914,000$14,957,000$7,476,000$4,487,100Speeding/Careless Driving$145,753,000$72,876,500$36,438,250$21,862,950Running Red Light$10,552,500$5,276,250$2,638,125$1,582,875Totals$192,964,500$96,482,250$48,241,125$28,944,675The number of trauma centers in Florida is 21 (Orlando Regional, 2006). The revenue gained from these fines would no doubt need to be shared among these. As a Level II trauma center, Lee Memorial could not expect to be awarded a large part of this revenue. However, an optimistic outlook would see Lee Memorial being granted ½1 of this sum, which translates to a little over 4.76%. Lee Memorial’s possible share is represented in the following table: Lee Memorial’s Share InfractionAmount of Increase$100$50$25$15Driving while Intoxicated$321,062$160,531$80,265.
70$1,040,676.42Running Red Light$502,299$251,149.5$125,574.75$75,344.85Totals$9,185,110.20$4,592,555.
10$2,296,277.55$1,377,766.53Even the smallest of these amounts would go a long way in redressing the excess cost over revenue experienced by Lee Memorial Health System’s trauma center. However, it is not to be assumed that all the money from these fines will be collected, nor is it likely that the trauma centers will be allocated 100% of the money that comes in to the Florida Department of Highway Safety and Motor Vehicles. Further measures should be taken to ensure that Lee Memorial Health System will be able to meet the demands for its care in the coming months and years. In pursuit of this, an increase in taxes/licensing fees on alcohol sale and consumption and the revenue it could provide shall be considered next.Alcohol Sale and UseAs of March 2005, the Florida excise on beer was $0.
48 to the gallon, while taxes on wine and spirits were $2.25 and $6.50 per gallon respectively (Department of Revenue, 2002; Powers, 2005).
The state of Florida has recently repealed a law mandating a surcharge on alcohol consumed on the seller’s premises, claiming that the enforcement of the law cost more than the revenue that it afforded (DBPR, 2006). This problem could be remedied if the general tax on alcohol were to be increased by a small percentage. Though it has proved difficult to find out how much alcohol has been consumed in Florida, it was found that $1.13 billion was collected in revenue from taxes, license fees, and fines on alcohol and tobacco in 2005 (DBPR, 2006; OPPAGA, 2006). Evidence exists to indicate that revenue from alcohol and tobacco can be divided into a 56:44 ratio; that is, 56% of this revenue comes from alcohol and 44% from tobacco (Department of Revenue, 2002). An across-the-board increase of 1% on these substances would amount to an approximately $11.
3 million increase in revenue from taxes and fees. A ½ % increase would give $5.65 million. Adjusting this amount to reflect the portion to be had from alcohol sales and consumption would give the following results: Total RevenueAmount of IncreaseCurrent Rate+ ½ %+ 1%+ 2%Alcohol & Tobacco$1.13 billion$5.
65 million$11.3 million$22.6 millionAlcohol Alone$632,800,000$3,164,000$6,328,000$12,656,000Of this amount, the portion that could reasonably be expected to go to Lee Memorial would be again about one part in twenty-one or 4.
76%. The sum is represented in the following table. Lee Memorial’s Share Total RevenueAmount of Increase+ ½ %+ 1%+ 2%Alcohol & Tobacco$268,940$537,880$1,613,640Alcohol Alone$150,606.40$301,212.80$602,425.
60It is to be noted that each 1% represents only one cent on every dollar, and that the amount proposed would be in addition to what the state already collects for taxes. Therefore, the state would not be relinquishing any of its already budgeted resources. The citizens would merely each be contributing a small amount to the maintenance of Florida’s trauma centers.
Considering the fact Lee Memorial finds itself short of about $5.5 million per year (Henline, 2006), it is recommended that at least a $50 increase on fines for traffic infractions be adopted, along with 2% increase in alcohol taxes. This would provide $4,592,555.10 and $602,425.60 respectively, giving a total of $5,194,980.70. This amount would go a far way in effacing the financial problems faced by the Lee Memorial Health System.
Works CitedDepartment of Business Professional Regulation (DBPR). “Notice: Surcharge Repeal.” DBPR Division of Alcoholic Beverages and Tobacco. 2006. http://www.state.fl.us/dbpr/abt/index.
shtmlDepartment of Revenue. Washington State Tax Structure Study. DOR. 2002.
http://dor.wa.gov/content/statistics/WAtaxstudy/search=’revenue%20from%20tob acco%20from%20alcohol%20floridaDickinson, Fred. O. Uniform Traffic Citation Statistics: Violations and Dispositions. Florida Department of Highway Safety and Motor Vehicles, 2006.
pdfFlorida Department of Highway Safety and Motor Vehicles. Uniform Traffic Citation Statistics: Statewide 5-Year Violation Comparison. FDHSMV Division of Driver Licenses, 2006. http://www.hsmv.state.fl.us/reports/2005UTCStats/search=%22florida%20statisti cs%20f or%20traffic%20citations%20speeding%202004%202005%22Henline, Jamie.
Experts: Cuts Would Collapse Trauma Center. Bonita Daily News. E.
W. Scripps, 2006. http://www.bonitanews.
com/news/2006/jul/23/Lee Memorial Health System. Level II Trauma Center. LMHS, 2006, http://www.leememorial.org/trauma/index.aspOPPAGA.
Florida Government Accountability Report. Florida Office of Program Policy Analysis and Government Accountability. 2006. http://www.
us/profiles/4015/print.aspOrlando Regional Hospitals. “Fast Facts.
” Orlando Regional Health Care. ORH. 2006. http://www.orhs.org/trauma/facts.cfmPowers, Marc.
“Alcohol Tax Supporters Waging Longshot Fight.” The Daily Dunklin Democrat. 2005.
http://www.dddnews.com/story/1091339.htmlTaheri, Paul ; David Butz.
Trauma Cost Methodology Study. Florida Department of Health. 2002.;