The Financial Implications of Traumatic Brain Injury TBI

The Financial Implications of Traumatic Brain Injury (TBI) Centers for Hospitals Society of Neurological Surgeons Madison, Wisconsin May 19, 2008

TBI – Hospital Impact • • Hospital Background Neurosciences Service Line Traumatic Brain Injury Hospital Demographics Strategic Considerations Investments Conclusions

University Hospital of Cincinnati (UH-C) • 650 Bed Tertiary Referral Hospital • Academic Medical Center and primary teaching hospital in region • Only Level 1 trauma center within 60 miles • Regional Safety Net Hospital • 30, 000 admissions per year • Part of Health Alliance of Greater Cinn. – Drake Hospital - LTACH

Neuroscience Service Line • “Quadrant 1” in terms of Contribution and Operating Margin • Nationally – 4% of total admissions • UH-C – 9% of total admissions • Center of Excellence Contribution Margin per Admission

Traumatic Brain Injury • Neuro-trauma surgical cases very lucrative • Head trauma 83% of total neuro-trauma cases nationally • UH-C – 600 cases per year Contribution Margin per Admission

TBI – UH-C Mix • 50% of the cases are mild • Closed-head injuries higher margins than Penetrating Brain injuries (low # of PBI) • UH-C – 600 cases/year 362 149 152 23 6 days 14 days 9 days – 61% of Market – Next – 13%, 7% then 4% • Drake helps lower LOS in severe cases Contribution Margin per Admission # of cases LOS

Payor Mix UH-C TBI Overall 14% 18% 26% 42% 17% 36% 23% 24%

Unique Qualities UH-C • Teaching Hospital • Tertiary Referral Center • Only Level 1 Trauma Center • 20 Bed NSICU • Regional AHC: – Total Size – Payor Mix 14% 26% 36% 24%

Strategic Considerations • Is Neurosciences a COE for the hospital? • Does the hospital have a good-sized trauma business? • What is the competition like in the region, and what are the likely competitive responses? • What is the likelihood of establishing a strong referral network of providers? • Should always be hospital-based, not ambulatory

Investments Needed • Infrastructure of a Trauma Center – 24/7 tertiary capabilities, equipment, call coverage, etc. • Engaged and competent Neurosciences staff, surgeons in particular • Dedicated Neurosciences ICU helpful (expertise) • Program support costs, physician extenders, program administrators, marketing and referral network

Conclusions • Neuro Critical Care is a growing field and critical to a Neurosurgery Service • Requires collaboration and good planning between hospital, physicians and referral partners • Regional competition, payor mix and expertise all critical considerations • Bottom line - TBI can be a major source of revenue for tertiary hospitals • Can help differentiate hospital and aid in payor contract negotiations