Emergency department admissions are more profitable than non-emergency department admissions

Abstract

Study objective: We compare the contribution margin per case per hospital day of emergency department (ED) admissions with non-ED admissions in a single hospital, a 600-bed, academic, tertiary referral, Level I trauma center with an annual ED census of 100,000.

Methods: This was a retrospective comparison of the contribution margin per case per day for ED and non-ED inpatient admissions for fiscal years 2003, 2004, and 2005 (October 1 through September 30). Contribution margin is defined as net revenue minus total direct costs; it is then expressed per case per hospital day. Service lines are a set of linked patient care services. Observation admissions and outpatient services are not included. Resident expenses (eg, salary and benefits) and revenue (ie, Medicare payment of indirect medical expenses and direct medical expenses) are not included. Overhead expenses are not included (eg, building maintenance, utilities, information services support, administrative services).

Results: For fiscal year 2003 through fiscal year 2005, there were 51,213 ED and 57,004 non-ED inpatient admissions. Median contribution margin per day for ED admissions was higher than for non-ED admissions: ED admissions $769 (interquartile range $265 to $1,493) and non-ED admissions $595 (interquartile range $178 to $1,274). Median contribution margin per day varied by site of admissions, by diagnosis-related group, by service line, and by insurance type.

Conclusion: In summary, ED admissions in our institution generate a higher contribution margin per day than non-ED admissions.