The financial impact of ambulance diversion on inpatient hospital revenues and profits

Objectives: The objective was to study the association between ambulance diversion and weekly inpatient hospital revenues and profits. Methods: This was a retrospective review of administrative data from one academic medical center from July 1, 2003, to December 31, 2006. Given the high amount of daily variability, inpatient hospital revenues and profits were collapsed by week and evaluated in four categories: no diversion, mild diversion (from >0 and <10 hours), moderate diversion (>10 and <20 hours), and high diversion (>20 hours). Revenues and profits for two categories of patients admitted to the hospital were calculated: 1) patients admitted from the emergency department (ED; i.e., those arriving by ambulance and by other means) and 2) electively admitted patients. Results: A total of 166,460 ED patients were included in the analysis. Inpatient hospital revenues were included from 85,111 patients, 28,665 of which were admissions from the ED (33.7%). For patients admitted from the ED, the average weekly revenues during periods of high diversion were $265K higher than periods of no diversion. For patients admitted on an elective basis, revenues were significantly higher when comparing periods of mild divert to high diversion (an additional $415K weekly). The overall increase in profitability was significant for periods of severe divert compared to no divert ($119K per week). Conclusions: Periods of greater diversion are associated with higher inpatient revenues and profits for ED, electively admitted patients, and the overall inpatient hospital population. Therefore, no financial disincentive exists from an inpatient perspective for the boarding of admitted patients in the ED and increasing periods of diversion. Efforts to decrease ambulance diversion must therefore be based on other rationales, like patient safety, quality of care, and improving access to care, or new models of reimbursement that reward hospitals for reducing ambulance diversion.