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AAST 2011 Plenary Papers

Play or pay

a financial model for trauma care in a regional trauma system

Zarzaur, Ben L. MD, MPH; Croce, Martin A. MD; Fabian, Timothy C. MD

Author Information
The Journal of Trauma and Acute Care Surgery: January 2012 - Volume 72 - Issue 1 - p 78-85
doi: 10.1097/TA.0b013e31823dca49
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Compared with treatment at a nontrauma center, treatment at a trauma center is lifesaving and cost-effective.14 However, a substantial financial commitment from trauma centers is needed to maintain readiness to provide this lifesaving and cost-effective care.5 Declining reimbursement for trauma related care, particularly for urban safety-net hospitals, has resulted in closure of some centers and uneven access to trauma centers across the country.610

Organization of trauma centers into an inclusive trauma system is recognized as a way to reduce mortality after injury.11 But, financial barriers are perceived to be a significant impediment to encouraging participation of hospitals in inclusive trauma systems. In a survey of expert panels assembled in all 50 states to address trauma system formation, all of the panels indicated that financial barriers were the single most significant barrier to growth of an inclusive trauma system in their state.10 In this difficult economic environment, some states have developed trauma funds as part of their statewide trauma systems to financially support participating hospitals.10 Because state trauma systems stop at state borders, but patients do not, the growth of a trauma system in one state could threaten the viability of a trauma center in a bordering state by decreasing volume or changing the payer mix of patients received from the state with an inclusive trauma system.

In 2008, the State Legislature of Mississippi passed House Bill 1405 (HB 1405) to prompt development of their statewide inclusive trauma system.12 This law significantly modified the legislative authority of the Mississippi Department of Health to administer the trauma system in Mississippi. It put in place a novel “Play or Pay” (PoP) provision requiring each hospital in Mississippi to participate in the Mississippi trauma system or pay a fee that could reach nearly $1,500,000.12,13 Provisions in the law stipulated that Level I trauma centers in contiguous states could participate in the Mississippi trauma system and receive funds from the Mississippi trauma fund. The passage and implementation of HB 1405 set up a natural experiment to study the effect of PoP on the development of the trauma system in Mississippi and the impact of rapid change in the Mississippi trauma system on a bordering state's Level I trauma center.


Study Setting

In 1998, the Mississippi Legislature amended the Emergency Medical Services Act of 1974 to create a statewide inclusive trauma system. The statute outlined key components of the system, authorized the creation of the Mississippi Trauma Advisory Committee as a permanent advisory body to recommend changes in the state's trauma plan, and established a Trauma Care System Fund (TCSF). Based on the Mississippi Trauma Advisory Committee's recommendations in 2002, the Mississippi Board of Health adopted regulations outlining criteria for designation of trauma centers as Levels I to IV.12,13 At this point, participation in the Mississippi trauma system was voluntary for all in-state hospitals. Monies in the TCSF were used for administration of the system and to reimburse hospitals and certain qualifying providers for uncompensated trauma care.

In 2008, passage of HB 1405 further modified the Emergency Medical Services Act of 1974.12 The resulting regulations mandated that every hospital in Mississippi participate in the Mississippi trauma system at a level commensurate with available hospital resources.13 Funding and rules for distribution of the TCSF were also modified. A facility that chooses not to participate in the trauma system or which does not participate at a level equal to the expected level is assessed a fee that could equal up to nearly $1,500,000 (Table 1). Funds from these fees are deposited in the TCSF. Additional funds for the TCSF were created from assessments on all moving violations, license tags, speeding, and reckless driving violations.

Table 1:
Current Fees Associated With the Mississippi PoP Trauma System Policy

After administrative costs are subtracted from the total available funds in the TCSF, $10,000 is distributed to each Level IV trauma center in the state. The remaining monies are distributed based on the following principles. Fifteen percent of the funds go to licensed ambulance services that care for injured patients, 60% is distributed to Level I to III centers for uncompensated care, and 25% goes to hospitals to distribute to physicians involved in the direct care of injured patients. Level I trauma centers designated by the State of Mississippi in contiguous states may also receive funds from the TCSF if they meet Mississippi trauma center designation requirements. The designation process for trauma centers closely follows recommendations of the American College of Surgeons Committee on Trauma. The new law and regulations went into effect on September 1, 2008.

The Presley Memorial Trauma Center (PMTC) is located in Memphis, TN, ∼10 miles from Mississippi border. The nearest Level I trauma center in the Mississippi trauma system is in Jackson, MS, ∼200 miles south of Memphis. The PMTC serves as the primary destination for significantly injured patients in the Memphis metropolitan area and a referral source for injured patients treated in hospitals in western Tennessee, northern Mississippi, and eastern Arkansas.

Study Population

The PMTC trauma registry (NTRACS, Digital Innovations, Forrest Hill, MD) was used for this study. The registry has detailed demographic, injury, procedure, complication, and financial data. The study population was limited to patients admitted between January 1, 2006, and December 31, 2009. Patients also had to have a home address in either Tennessee or Mississippi. Patients who were burned, victims of drowning, bites or stings, overexertion, poisoning, and suffocation were excluded.

Information regarding the Mississippi trauma system was obtained from the Mississippi Department of Health Web site ( Details regarding hospital trauma center designation and participation as well as data from the distributions from the TCSF are available on the Web site. Information was downloaded and collated into a database for further analysis.

Statistical Analysis

Two time periods were defined for the purposes of this study based on the date of implementation of the Mississippi PoP policy. The time from January 1, 2006, to August 31, 2008, was defined as the PRE period. The time from September 1, 2008, to December 31, 2009, was defined as the POST period. Three comparisons were made between the PRE and POST time points. First, we examined all patients admitted who had a home address in either Tennessee or Mississippi (Entire Cohort). Next, we compared patients with a home address in Mississippi only (Mississippi Cohort). Finally, we compared patients with a home address in Tennessee (Tennessee Cohort) to determine whether there were any regional trends in the data that could explain any differences seen in the Mississippi cohort. For all cohorts, two different reimbursement ratios (REIMBRs) were calculated, a charge REIMBR (CHARGE-REIMBR) and a cost REIMBR (COST-REIMBR). To calculate the CHARGE-REIMBR, the reimbursement received was divided by total hospital charges. The COST-REIMBR was calculated by dividing the reimbursement received by hospital cost. Hospital costs were calculated by multiplying hospital charges by the cost to charge ratio for the PMTC. For the Mississippi cohort, a further analysis was performed. The adjusted cost REIMBR (ADJ-COST-REIMBR) was adjusted for reimbursement received from the TCSF. A REIMBR >1 indicates a profit and a REIMBR <1 indicates a loss. For all analyses, categorical variables are reported as percent of the category from which they were derived. Continuous variables are reported as either the median and interquartile range for non-normally distributed variables or the mean ± SD. Categorical variables were compared using χ2 test and continuous variables were compared using Wilcoxon rank-sum test or Student's t test, and a p < 0.05 was considered significant. SAS version 9.2 (Cary, NC) was used for all analyses. The University of Tennessee Health Science Center Institutional Review Board approved this study.


Mississippi Trauma System

In 2006, there were 107 licensed hospitals in Mississippi and 70 (65%) participated in the Mississippi trauma system (Fig. 1). Most participating hospitals were designated as Level IV trauma centers (84.3%). Only 8.5% participated as Level III centers and 5.7% participated as Level II centers (Fig. 2). The University of Mississippi Medical Center in Jackson was the single in-state Level I trauma center in 2006. In 2006, the PMTC was the only out-of-state Level I trauma center participating in the Mississippi trauma system.

Figure 1:
Percent of hospitals in Mississippi participating in the Mississippi trauma system. *p < 0.05 vs. 2006.
Figure 2:
Distribution of in-state hospitals participating in the Mississippi trauma system in 2006 and 2009.

By the end of 2009, 16 months after the PoP law took effect, there were 106 licensed hospitals in Mississippi. Compared with 2006, the number of licensed hospitals participating in the Mississippi trauma system significantly increased to 84 (79.2%; p = 0.0317) (Fig. 1). The distribution of trauma center levels also changed. Level IV centers still made up the majority of designated trauma centers in Mississippi (81%). There was an increase in Level III (11%) and Level II (7.1%) trauma centers compared with 2006 (Fig. 2). The University of South Alabama joined the Mississippi trauma system as an out-of-state Level I trauma center. The University of Mississippi Medical Center in Jackson remained as the only in-state Level I trauma center.

By 2009, 18 new trauma centers joined the Mississippi trauma system, 17 of which were in state (3 Level III centers and 14 Level IV centers). Four trauma centers decreased their level of participation and four centers increased the level at which they were participating in the trauma system. Finally, one Level IV center that was active in 2006 had closed by 2009 for reasons not associated with trauma system participation. By the end of 2010, the TCSF had generated $24,703,787, the majority of which came from moving violations and motor vehicle tag fees (75.9%). The remainder came from all terrain vehicle and motorcycle fees (3.4%) and fees on nonparticipating or underparticipating hospitals (20.7%).

Entire Cohort

Between January 1, 2006, and December 31, 2009, 13,164 patients with a home address in Mississippi or Tennessee were admitted to the PMTC after injury. Of those, 2,815 (21.4%) were from Mississippi and 10,349 (78.6%) were from Tennessee. For the entire cohort, 8,834 were in the PRE group and 4,330 were in the POST group. There were no clinically significant differences between the PRE and the POST group regarding gender, race, injury type, or injury severity. Patients in the POST group were slightly older with a median age of 38 years compared with a median age of 36.2 years in the PRE group. Mortality was 6.8% in the PRE group compared with 6.7% in the POST group (Table 2). There were significantly more patients received in transfer in the POST time period compared with the PRE time period (19.2% vs. 14.8%, p < 0.0001). There were no differences in insurance type, CHARGE-REIMBR, or COST- REIMBR PRE versus POST (Table 2). Further, there were no differences in the number of admissions by month and year for any cohort (Fig. 3).

Table 2:
Characteristics of Patients Admitted to the PMTC From 2006 to 2009
Figure 3:
Admissions by month to the PMTC from 2006 to 2009. Solid line, Entire Cohort; dotted line, Tennessee Cohort; and dashed line, Mississippi Cohort.

Mississippi and Tennessee Cohorts

In the PRE time period, significantly fewer Mississippi residents transferred from a referring facility compared with the POST time frame (30.0% vs. 36.8%, p = 0.0010). There was no change in the percent of patients transported via helicopter PRE (40.6%) compared with POST (39.4%). There was a significant difference in the distribution of insurance type among the Mississippi residents. There was a reduction in commercial insurance and increase in the percent of patients with government or no insurance (Table 2). There was also a significant decrease in the CHARGE-REIMBR and COST-REIMBR (Table 2).

For Tennessee residents, there was a significant increase in the number of patients seen in transfer from a referring facility PRE (10.8%) compared with POST (14.0%, p < 0.0001). There was no difference in the number of patients transported via helicopter. There was no difference in the type of insurance, CHARGE-REIMBR, or COST-REIMBR in the Tennessee cohort (Table 2).

Regarding payments from the Mississippi TCSF to the PMTC, there was an increase in payments from 2008 to 2009 compared with 2006 to 2007 (Fig. 4). In 2006, the PMTC received $674,778 and in 2009 the PMTC received $1,475,127. In the year the HB1405 became effective, 2008, the PMTC received $2,165,624 (Fig. 4). After adjusting for payments received from the TCSF, the ADJ-REIMBR significantly increased in the POST period for patients from Mississippi (Table 2).

Figure 4:
Amount of money distributed to the PMTC from the Mississippi Trauma Care System Fund by year.


For trauma centers to maintain readiness to optimally care for injured patients, Taheri et al.5 estimated that it costs each center nearly $2.7 million per year. Many of these costs are not recouped by the trauma center through payments from insurance companies and government-sponsored health insurance programs resulting in ongoing losses forcing some centers to close.69 These financial pressures may lead to underdevelopment of a trauma system. In the Mississippi Trauma Care Task Force's Final Report in 2007, the members wrote: “Underfunding jeopardizes the entire trauma system and if consistent, ongoing funding is not obtained, the current system is subject to collapse.”14 Mississippi addressed this concern with a novel approach.

Although financial incentives are not likely the only factor considered by hospitals when deciding to participate, and at what level, in the trauma system, financial considerations did appear to motivate Mississippi hospitals during the study period. The most obvious evidence is that there was an increase in trauma centers in previously underserved areas of Mississippi, particularly in the southern region of the state. In addition, four hospitals in the state increased their level of participation in the Mississippi trauma system based on the findings by the Mississippi Department of Health regarding hospital capability to participate as higher level centers. At the same time, four centers downgraded their level of participation after expectations were lowered by the Mississippi Department of Health's evaluation of hospital resources.

The increase in appropriate levels of participation in the Mississippi trauma system by hospitals does have a potential unintended consequence. As the number of hospitals participating in the system goes up, the amount of fees paid into the TCSF from underparticipating and nonparticipating hospitals goes down. At the end of 2010, only 20% of more than $24 million in the TCSF was generated by fees on under- or nonparticipating hospitals. The majority of funds within the TCSF come from other sources such as fees on moving violations, motor vehicle tags, all terrain vehicle registrations, and motorcycle registrations. If the trend continues and most hospitals in Mississippi participate in the trauma system at an appropriate level, income for the TCSF must be diversified to remain sustainable.

Another key element of the PoP policy is that out-of-state Level I trauma centers can participate in the Mississippi trauma system and receive payments from the Mississippi TCSF. This created a truly regional system that crossed state lines giving the Mississippi Department of Health oversight of hospitals outside of Mississippi. From the standpoint of an out-of-state trauma center, participation in the Mississippi trauma system could be advantageous or could result in negative consequences. During the study period, there was an increase in the number Mississippi residents transferred from a referring facility to the PMTC. Injury severity of Mississippi residents did not change. One explanation is that the increase in trauma centers in Mississippi may have resulted in an increase in the number of patients seen at a lower level trauma center before transfer to the PMTC. Because longer transport times are associated with increased mortality, one might expect that there would be an increase in mortality during the same time period.15 However, mortality remained the same in both time periods. Further, when comparing the Tennessee cohort with the Mississippi cohort, there is no statistically significant difference in mortality in the PRE period or in the POST period. In fact, the patients who were residents of Mississippi had higher injury severity scores and were transferred from a referring facility more often compared with patients from Tennessee in both PRE and POST. This might explain the slightly higher, but not statistically significant, mortality observed for patients from Mississippi. Interestingly, there was an increase in the number of patients seen in transfer who were residents of Tennessee PRE versus POST. Thus, the observed increase in the number of transferred Mississippi residents could be the result of a regional phenomenon that was unmeasured in this study.

The change in payer mix PRE versus POST for Mississippi residents treated at the PMTC does not appear to be secondary to a regional trend, however. The PMTC noted an increase in government insurance and self-pay and a decrease in commercially insured Mississippi residents PRE versus POST. No difference in payer mix was noted among Tennessee residents. There was a significant decrease in COST-REIMBR for Mississippi residents. In the PRE period, the COST-REIMBR was >1 indicating a modest profit. However, in the POST period, the COST-REIMBR dropped <1 indicating a loss for the hospital. There was no similar decrease for patients from Tennessee.

As with the difference in transferred patients, it is difficult to determine the exact reason for the change in payer mix for patients from Mississippi. However, this finding does illustrate a potential downside for higher level trauma centers in states bordering a state with a rapidly developing trauma system. It is possible that newly participating trauma centers within the trauma system could be selectively keeping patients with better payer sources and transferring those with financially less appealing funding sources to higher level centers in the system. Thakur et al. showed a similar trend at a Level I trauma center in Rhode Island. In their study, patients with minor orthopedic injuries were transferred in off hours and the transferred patients had a disadvantageous payer mix.16 However, MS's policy of inclusion of bordering states' Level I trauma centers in their system does mitigate some of the negative financial impact development of the Mississippi trauma system had on the PMTC. During the entire study period, the PMTC received more than $5 million from the Mississippi TCSF. The net effect on the PMTC after adding in the monies received from the TCSF was a significant increase in the ADJ-REIMBR indicating a modest net profit for the PMTC. In light of this modest profit, it is important to consider the value added services the PMTC offers to residents of Mississippi. Outreach activities in the form of injury prevention and physician and staff training are important value added services the PMTC offers to Mississippi residents and hospitals. The PMTC is the closest Level I trauma center to residents of northern Mississippi providing access to higher levels of care than would otherwise be available for the residents of northern Mississippi. Further, the PMTC is a regional transfer center for complex neurosurgical and orthopedic trauma that cannot be addressed even at Level II centers in Mississippi. Without these services, residents of northern Mississippi would have to travel nearly 200 miles to the next closest in-state Level I trauma center.

There are certain limitations associated with this analysis which should be addressed. This is a single-institution's experience within the Mississippi trauma system. Because we do not have data from other centers within the system, it is unknown if the PMTC's experience is an outlier or if it is consistent with the experience of other centers. In addition, lack of data from the entire Mississippi trauma system makes it difficult to determine why there was a change in payer mix over the study time frame in patients from Mississippi. There are also issues inherent in the calculation of the REIMBR. Although the REIMBR has been used to evaluate trauma center profitability in the past,17 differences in estimation of hospital charges over time can make comparisons over time subject to bias.

With these limitations in mind, this study found that implementation of a PoP policy was effective and increased access to trauma centers for Mississippi residents. Rapid change in the Mississippi trauma system had a real financial impact on the PMTC with a reduction in income for treating Mississippi residents. However, funds received from the TCSF offset the financial issues associated with this rapid change. Development of trauma systems that are regional and blind to state lines is critical to further advancement of the care of critically injured patients in the United States. An important lesson can be learned from Mississippi regarding building a truly regional trauma system. Allowing a provision in their law for states outside of Mississippi to fully participate in their trauma system points to the realization by the legislators in Mississippi that its responsibility to ensure optimal care of its state's injured citizens does not stop at the state line. Perhaps organizations invested in the care of injured patients, such as the American College of Surgeons Committee on Trauma, the American Association for the Surgery of Trauma, or other professional organizations, could use Mississippi's PoP policy as an example of how to achieve regionalization of emergency care. It is unlikely that Mississippi's PoP policy will be applicable to all areas of the United States. A regional approach paying attention to local needs may be more effective. Focusing on the themes of accountability, access to quality care and revenue sharing that is blind to state lines, and informing legislators on the local, state, and national level of the success in Mississippi could lead to similar implementation in other regions of the United States facing challenges in trauma system funding and participation.


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B.L.Z. designed this study; collected, analyzed, and interpreted data; wrote the paper; prepared figures and tables; and submitted the final manuscript. M.A.C. and T.C.F. interpreted data; provided critical review of the manuscript, its figures and tables; and approved the final manuscript.


The authors are attending physicians at the Presley Memorial Trauma Center.


Dr. David B. Hoyt (Chicago, Illinois): This paper is important for several reasons. First, it reviews and highlights the importance of a policy decision following implementation. It allows us to evaluate progress and the soundness of the decision retrospectively. Fundamentally, “pay or play” is a social contract with citizens and patients of the most important type. It legislates a responsibility to a safety net and allows hospitals to participate either directly or through financial support. This distributes the burden of unfunded care so that no one hospital gets a disproportionate share.

The results show that in Mississippi participation has increased and access has been preserved. The policy has had the desired effect. The study also shows that in an adjacent state that by being eligible for funding the Level I Presley Trauma Center is doing better financially and recovering some of their costs for taking care of Mississippi patients. The per-patient reimbursement is better despite more unfunded patients and fewer insured patients coming from Mississippi.

This is exactly what you would hope for from this kind of policy. Congratulations to the framers of the policy from Mississippi and to the authors for this important study. I have several questions:

First, what percent of the money actually comes from “paying hospitals,” so-called, versus licensing fees and the other sources of revenue that go into this large trauma center fund? Do you think this pay option will be financially sustainable over time? And will people erode it politically?

Secondly, what will you do as a trauma center if you start to see the insured to uninsured transfer ratio get worse? How will you as a non-Mississippi player work with the State of Mississippi?

Finally, this policy was tried in California when I practiced there but failed. Some of the Mississippi consultants who helped set up the Mississippi system were actually from the original California group. And they were successful in getting this policy in place in a new system. I think there is a lesson from this about persistence and the timing of policy development that has implications for the AAST and the COT.

So the question is, what should the AAST and COT and other trauma organizations take as excellent policy data now? And how can we use it effectively for advocacy at the state and federal level?

This is probably one of the best ideas I've heard that will come forth during considerations regarding refinancing of our health system so I think it's very important that we listen to these as a potential way to effectively advocate for future health care reform.

Dr. Richard J. Mullins (Portland, Oregon): Two question: what do you anticipate payers are going to do when they read your paper and learn that you're making a profit off taking care of their patients?

The date went by quickly but it looked like the death rate for people from Mississippi was 7 percent at Presley and for people from Tennessee it was 6 percent. Are you providing data to Mississippi officials that your trauma center is delivering quality care to their citizens?

Dr. John M. Porter (Jackson, Mississippi): First off I want to thank the folks from Memphis for being excellent partners to the citizens of Mississippi and providing trauma care to the citizens of northern Mississippi.

Second, the title is incorrect. The “pay or play system” is based on a formula using volume and acuity and is no longer based on uncompensated care. The previous system was based on uncompensated care but now it's based on volume and acuity.

So the amount of money that Memphis receives is based on the number of patients that they receive and the acuity of those patients but not on their insurance status. So it's not based on uncompensated care.

Right now only 15 percent of all the money collected that is distributed to trauma centers in Mississippi comes from the folks who have elected to “pay” instead of “play.” But, again, I thank them for being excellent partners, presenting excellent data. Thank you very much.

Dr. Ajai K. Malhotra (Richmond, Virginia): I know your focus is on how it affected your trauma center, but it's a little peculiar that the number of centers in Mississippi increased but still they were transferring more patients out to you guys. Do you know why that may have happened?

Dr. Ben L. Zarzaur (Memphis, Tennessee): I'd like to thank Dr. Hoyt and all the folks who gave comments.

Regarding Dr. Hoyt's comment about what percent of the money from the trauma care system fund comes from the “play or pay” policy, I think that was just answered, actually, by Dr. Porter. It's about twenty percent of the $24 million in the entire fund at the end of 2010.

The other part of that question was do you think it's sustainable. If it were dependent upon just the play or pay fees, obviously if it had the intended effect and no hospitals were under participating in the trauma system, the amount of money from the pay or play provision in the law would go to zero.

So the fact that that level is only around 15 to 20 percent of the entire fund which is $24 million makes you feel better that this is going to be a sustainable policy going forward.

Dr. Hoyt also asked what will we do if the payer mix were to get worse. I think that's something that you have to have a good relationship with the people within Mississippi, within the legislature, the people within the Department of Health, and the folks that are sending the patients to you from the trauma centers and develop a good relationship with those people so that you can combat that type of situation if it were to occur.

It's basically anyone's guess as to what is going to happen with payers going forward with the changes in health care that are coming down the pike, so it would be really hard to predict.

The other question is how should the AAST and the COT and other organizations use this type of information. I think the primary thing would be to educate legislators and the public at every opportunity about this particular policy and the success it has had in Mississippi.

And I think it dovetails nicely with the American College of Surgeons' Inspiring Quality campaign in the sense that there are several core principles of this model so, you know, every state is not going to be able to implement the “play or pay” policy as it was implemented in Mississippi but the principles remain the same.

With the adage that all politics are local, each place is going to have to find whatever solution may work for them. With that in mind the principles that the policy encourages accountability, it encourages revenue sharing in some way, and it's blind to state lines are probably the most important pieces of that policy.

Regarding Dr. Mullins' questions, what do you anticipate Mississipians are going to do, Dr. Fabian and I actually had that discussion. All the data are public, the exact amount of money that comes from Mississippi to the Presley Memorial Trauma Center is published as well as the amount of money that goes to every other hospital in the Mississippi trauma system.

Because our hospital is public, the financial data associated with the Presley Memorial Trauma Center are public knowledge. So all the data are freely available. That's how I had access to it, frankly.

So I'm sure the people in Mississippi are smarter than I am and they are going to figure that out. And, again, you need to have a good relationship with your legislators from that area in order to make this type of program sustainable.

You need to have a good relationship with the trauma centers so when the time comes they can go to bat for you in the legislature. The other thing that we do is also have a good relationship with our national partners.

Dr. Porter, I thank you for your comments and we are privileged to be a part of the Mississippi trauma system and want to continue participating in it because it is the right thing for the patients in Northern Mississippi.

And Dr. Malhotra, why was there an increase in transfers across the region? It not only happened in Mississippi but it also is occurring in Tennessee as well.

I don't have a good answer for why that is occurring. It is an interesting question and actually could be a potential further study to see what is going on there.


Trauma system funding; regional trauma system; regionalization of trauma; trauma center finance

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