The Business Case for Burn Centers

Peter H. Grossman, MD, for HealthLeaders Media, April 3, 2009

There is a common misconception among hospital administrators that burn centers are neither self-sustaining nor profitable. However, this is a world view at odds with my personal experience. If managed properly, plastic surgery-based burn centers can be new, highly profitable revenue sources that bring enhanced prestige to the hospitals with which they affiliate.

Hospital administrators and executives are often skeptical about the cost and sustainability of burn centers, and question how burn care will fit into the overall business structure of the organization. This hesitation to embrace burn care as a business solution rather than a cost center likely stems from a limited perspective on the true nature of burn care and an underestimation of the size and scope of the market.

True "burn care" is more than just the acute care and stabilization rendered by a general surgeon prior to transferring a patient to another facility for follow-up care. It constitutes a full range of services—from acute care and reconstruction to rehabilitation and psychological counseling. Fewer than 30% of the burn centers in this country are plastic surgery-based, even though this model has been proven effective. For example, the Grossman Burn Center in California has plastic and reconstructive surgeons, intensivists, internists, pediatricians, and a full range of service providers including dieticians, therapists, and counselors who treat the patient functionally, emotionally, and cosmetically.

Hospital administrators also need a better understanding of the "market" for burn care. While natural disasters and house fires make headlines, occupational burns are far more common and a perennial risk in just about every community. Auto mechanics, electricians, industrial plant workers, and machinists are among the professions that are at risk of burn injury. Additionally, almost one-third of the patients we see in our practice are children.

This underestimation of the demand for dedicated burn centers, coupled with misconceptions about their viability, has led to a severe lack of burn care resources throughout the country. Taking a regional approach to establishing new centers to treat underserved populations is one way the healthcare industry can address this shortage. Targeted population centers with easy access to interstate highways that serve rural and outlying areas, and that are in close proximity to high risk populations such as heavy industry and fire zones, are ideal places for hospitals to expand services and locate a dedicated burn center.

Establishing a burn center in an existing hospital is not the daunting proposition that many hospital executives perceive it to be, either—especially if they have the right partner. For little up-front investment, a hospital can covert existing ICU beds into a dedicated burn-care ward, without incurring the costs of a major build-out. A four- to eight-bed unit requires about 3,000 square feet, a continuous block of operating room time, and the right professional partner to recruit, train, and manage the on-site personnel.

Once up and running, better carve-out rates for burn care can usually be negotiated with insurers, as well. For instance, a dedicated burn center can yield as much as 200% of Medicare costs. Further, by capturing the full range of services required to affect a significant functional and cosmetic recovery, burn centers are actually accretive to revenues, not the cost center many providers perceive them to be.

With the healthcare conversation today being dominated by proposed public policy reforms that are aimed at improving the patient's access to care from an economic standpoint, we run the risk of paying too little attention to the need for better and greater numbers of healthcare delivery assets. The more the myths about the business of burn care and the markets served by burn centers are debunked, the greater the opportunities for providers will be.

Peter H. Grossman, MD, is a Board-certified plastic surgeon and president of Grossman Burn Centers. For more information, visit The Grossman Burn Center.
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