Financial Impacts of Receiving Combat Casualties during a Large-Scale Combat Operation on Civilian Hospitals in the NDMS Pilot Study

Objective Overseas large-scale combat operations (LSCOs) could require domestic hospitals to treat large numbers of combat casualties. Our goal was to evaluate the financial impact on hospitals of treating combat casualties during an LSCO. Methods Using a discrete event simulation model, we explored how 5 civilian hospitals in Omaha, Nebraska, would fare after accepting combat casualties during a National Disaster Medical System (NDMS) activation. We compared changes in financial measures (government payments, hospital revenues) and occupancy measures (civilian patient displacement) under different scenarios for combat casualty reimbursement rates as fractions (75%-125%) of Medicare rates. Results Combat casualties replaced 100% of civilian patients at 3 of 5 hospitals, displacing a total of 10,905 civilian patients [95% CI: 10551-11248]. Combat casualty reimbursement at 125% of Medicare rates resulted in government payments of $462 million and net income gains for civilian hospitals of approximately 23 times pre-activation baselines. Combat casualty reimbursement below 125% of Medicare rates led to net income losses. Conclusions Large influxes of combat casualties could result in rapid, profound displacement of civilian patients and revenue loss at NDMS-participating facilities, potentially affecting hospitals’ ability and willingness to treat them. Policymakers need to identify appropriate reimbursement rates for combat casualties.