Purpose: The U.S. has a crisis of insufficient emergency coverage for hand trauma. One of the problems is the perceived financial loss in taking care of hand trauma patients in the emergency department. The purpose of this financial analysis is to evaluate the financial impact of treating emergency hand trauma patients for an academic medical practice and for a health care system.

Methods: We examine the billing records of hand patients (N = 2,632) seen in the emergency department at the University of Michigan Health System for the 2005 fiscal billing year. We focused our analysis on 220 primary diagnosis ICD-9 codes involving the hand and wrist. The financial data were separated into inpatient professional revenues and costs (related to physician practice) and inpatient facility revenues and costs (related to the University of Michigan Health System). Professional net revenue was calculated by applying historical collection rates to procedural charges. Facility revenue was calculated by applying historical collection rates to the following downstream charge categories: inpatient/OR, clinic facility, radiology and occupational therapy.

Results: The payor mix for this analysis was 85% private insurance, 7% Medicare, 6% uninsured and 2% Medicaid. The net professional revenue and total cost for physician salary, malpractice and benefits allocated to hand patients was $930,052 and $563,034, respectively, for a net profit margin of $367,018. Net health system facility revenue and total costs were $3,758,272 and $3,272,974, respectively, for a net profit margin of $485,299.

Conclusions: Our data suggest that hand trauma is fiscally advantageous for both the surgical department and healthcare system for this academic medical center. The perceived negative margin in caring for hand trauma patients is not supported by this analysis. Providing access to hand trauma patients may be fiscally advantageous in certain settings when the proportion of non-reimbursed care can be controlled.