Impact of subsidy policies on the financial status of trauma centers

Lin Lin and Pratik J. Parikh ()
Additional contact information
Lin Lin: University of Louisville
Pratik J. Parikh: University of Louisville

Health Care Management Science, 2025, vol. 28, issue 2, No 2, 160-177

Abstract: Abstract Trauma centers (TCs) play a crucial role in improving patient safety of severely injured individuals, but require substantial financial resources to operate effectively. TCs in low-insured areas are particularly at risk of being confronted with financial deficits, and a threat of closure, due to the inability to recover costs from uncompensated care. While some states in the US provide financial subsidies to support these centers, the diversity of state subsidy policies and their impacts on TC financial viability are poorly understood. To address this, we introduce a generalized subsidy distribution formula that incorporates key components from various state policies. Based on that, we further propose a TC Financial Evaluation Model that employs Monte Carlo simulation to assess the effects of different subsidy policies along three proposed metrics. Utilizing realistic data from multiple US states and national insurance statistics, we conduct a comprehensive experimental study. Our findings suggest that the financial performance of TCs could be affected by the total subsidy amount, the Uninsured level within the Trauma Service Area (TSA), and the specific subsidy distribution policy employed. This research provides trauma decision-makers a quantitative tool to evaluate, compare, and design subsidy policies tailored to their unique demographic and economic contexts, potentially leading to a more standardized approach to mitigate existing policy disparities across states.

Keywords: Trauma centers; Subsidy; Policies; Simulation; Insurance (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10729-025-09701-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:hcarem:v:28:y:2025:i:2:d:10.1007_s10729-025-09701-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10729

DOI: 10.1007/s10729-025-09701-1

Access Statistics for this article

Health Care Management Science is currently edited by Yasar Ozcan

More articles in Health Care Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().