Are emergency departments really the most expensive place of all?

Are emergency departments really the most expensive place of all?

Guest Editorial Are emergency departments really the most expensive place of all? A u t h o r : R o b e r t M. W i l l i a m s , MD, DrPH, A n n Arbor...

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Guest Editorial Are emergency departments really the most expensive place of all? A u t h o r : R o b e r t M. W i l l i a m s , MD, DrPH, A n n Arbor, M i c h i g a n

h e costs of hospital ED services h a v e b e c o m e a major c o n c e r n a m o n g p o l i c y m a k e r s . In a n a d d r e s s to C o n g r e s s a n d t h e n a t i o n on S e p t e m b e r 22, 1993, P r e s i d e n t Clinton o u t l i n e d his proposal for comp r e h e n s i v e h e a l t h s y s t e m reform a n d referred to e m e r g e n c y d e p a r t m e n t s as "the m o s t e x p e n s i v e place of all. ''1 It is w i d e l y b e l i e v e d a n d a c c e p t e d : (1) t h a t a b o u t half of all ED visits are for m i n o r m e d i c a l problems, 2 (2) the cost of n o n u r g e n t ED services is a p p r o x i m a t e l y t h r e e t i m e s t h e cost of a p h y s i c i a n office visit, 3 a n d (3) d i v e r s i o n of n o n u r g e n t ED p a t i e n t s to private p h y s i c i a n offices could result in s a v i n g s of u p to $7 billion per year. 4 It is k n o w n t h a t ED visits are related to social a n d cultural p a t t e r n s t h a t m a y b e difficult to c h a n g e a n d t h a t m a n y d i s a d v a n t a g e d p a t i e n t s rely on hospital e m e r g e n c y departm e n t s as a p r i m a r y s o u r c e of a c c e s s to t h e health care system. T M In 1993 t h e G e n e r a l A c c o u n t i n g Office reported t h a t ED u s e i n c r e a s e d 19% d u r i n g the 1985-1990 period to 99.6 million visits in 1990.12 After a small d e c l i n e i n 1994, ED u s e i n c r e a s e d almost 5% in 1995.13 I n c r e a s i n g ED u s e c o u p l e d with t h e p e r c e p t i o n of h i g h cost h a s p r o m p t e d m a n a g e d care plans a n d s t a t e M e d i c a i d p r o g r a m s to i m p l e m e n t s t r a t e g i e s to d i s c o u r a g e t h e u s e of t h e e m e r g e n c y d e p a r t m e n t . 14 A key q u e s t i o n r e l a t e s to the a c c u r a c y of t h e assertion that emergency departmeh~s are indeed "the m o s t e x p e n s i v e place of all." A r e c e n t Z t u d y chall e n g e d s o m e widely held beliefs a b o u t t h e high costs of e m e r g e n c y s e r v i c e s . 15 A v e r a g e a n d m a r g i n a l n o n u r g e n t ED costs a m o n g six M i c h i g a n c o m m u n i t y hospitals w e r e f o u n d to b e m u c h lower t h a n previ-

T

Robert Williams is a former president of the American College of Emergency Physicians. He currently serves on the faculty at the University of Michigan School of Public Health and in the Department of Surgery, Division of Emergency Medicine. For reprints, write Robert M. Williams,MD, DrPH, School of Public Health, The University of Michigan, 1420 Washington Heights, Ann Arbor, MI 48109-2029; E-marl:[email protected]. J Emerg Nurs 1997;23:292-4. Copyright © 1997 by the Emergency Nurses Association. 0099-1767/97 $5.00 + 0 18/61/82629

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ously b e l i e v e d a n d similar te the costs i n private p h y s i c i a n s ' offices for e q u i v a l e n t services. T h e t e r m i n o l o g y of costs c a n b e c o n f u s i n g a n d is i n c o n s i s t e n t in t h e literature. Fixed c o s t s are d e f i n e d as t h o s e costs t h a t are n o t d e p e n d e n t o n volume, a n d variable costs .are t h o s e t h a t are d e p e n d e n t o n volume. Fixed a n d variable costs m a y b e either direct, s u c h as the costs for m e d i c a l a n d n u r s i n g staff, ancillary services a n d supplies, or indirect, s u c h as overh e a d a n d a d m i n i s t r a t i v e costs. Most ED costs are in t h e fixed category, w h i c h m e a n s t h a t t h e extra cost for o n e additional visit is small. T h e majority of ED costs relate to k e e p i n g t h e e m e r g e n c y d e p a r t m e n t o p e n a n d fully staffed on a 24 hour-per-day basis. For example, at 2 AM w h e n the e m e r g e n c y d e p a r t m e n t is u s u a l l y (but n o t always!) quiet, the true a d d i t i o n a l cost of t r e a t i n g a p a t i e n t w i t h a sore t h r o a t is e x t r e m e l y small.

Hospital emergency d e p a r t m e n t s are in f a c t c o s t effective and should be u s e d m o r e , n o t l e s s , for minor medical conditions.

Contrary to popular perception, I b e l i e v e t h a t hospital e m e r g e n c y d e p a r t m e n t s are in fact cost effective a n d should b e u s e d more, n o t less, for m i n o r m e d i c a l conditions. The p r o b l e m is t h a t a l t h o u g h the a c t u a l costs of p r o v i d i n g services m a y b e e q u i v a l e n t to t h e costs in a p r i v a t e p h y s i c i a n ' s office, t h e c h a r g e s t h a t p a t i e n t s a n d their i n s u r a n c e c o m p a n i e s face are m u c h higher. In t h e M i c h i g a n study, for example, the a v e r a g e cost of a n o n u r g e n t ED visit w a s a b o u t $62, b u t t h e a v e r a g e c h a r g e w a s $124. rs M u c h of t h e m e d i a a t t e n t i o n r e l a t e d to t h e M i c h i g a n s t u d y dealt w i t h t h e r e l a t i o n s h i p b e t w e e n

Williams/JOURNALOF EMERGENCY NURSING

ED c h a r g e s a n d costs. O n e r e a s o n t h a t t h e c h a r g e s a r e t w i c e t h e c o s t s is t h a t a b o u t half of all ED c h a r g e s g o u n c o l l e c t e d . ~s, 17 To p u t it a n o t h e r way, for e a c h n o n u r g e n t v i s i t to t h e e m e r g e n c y d e p a r t m e n t b y a

T h e a v e r a g e c o s t of a n o n u r g e n t ED visit w a s a b o u t $62, b u t t h e a v e r a g e c h a r g e w a s $124.

p a t i e n t w h o a c t u a l l y p a y s t h e c h a r g e of a b o u t $125, t h e r e is one v i s i t b y a p a t i e n t w h o p a y s n o t h i n g for t h e s e r v i c e s r e n d e r e d . It is unfair for p a t i e n t s to p a y t w i c e t h e a c t u a l c o s t s of t h e s e r v i c e s r e c e i v e d , a n d it s e e m s r e a s o n a b l e to p r e v e n t t h e s e h i g h c o s t s b y disc o u r a g i n g t h e u s e of t h e e m e r g e n c y d e p a r t m e n t - - f o r e x a m p l e , t h r o u g h c o p a y m e n t s a n d d e d u c t i b l e s . Yet, from t h e v a n t a g e p o i n t of t h e h e a l t h c a r e d e l i v e r y syst e m , t h e d i v e r s i o n of i n s u r e d p a t i e n t s a w a y from emergency departments compounds the financing p r o b l e m b y r e d u c i n g t h e pool of p a t i e n t s w h o c a n p a y for their care, a n d m a y l e a d to t h e closure of m a n y emergency departments. Without an adequate and equitable financing mechanism, many Americans could b e left w i t h o u t a c c e s s to e m e r g e n c y services.

For e a c h n o n u r g e n t visit to the emergency department by a patient who actually p a y s t h e c h a r g e of a b o u t $125, t h e r e is o n e visit b y a patient who pays nothing for t h e s e r v i c e s r e n d e r e d .

A n i s s u e of vital i m p o r t a n c e to e m e r g e n c y m e d i c i n e is w h a t will h a p p e n to i n d i g e n t a n d u n c o m p e n s a t e d c a r e as m a n a g e d c a r e p l a n s i n c r e a s e m a r k e t p e n e t r a t i o n , r e d u c i n g t h e ability of h o s p i t a l s to shift costs. W h o will p a y for t h e s e federally m a n d a t e d serv i c e s in t h e e m e r g e n c y d e p a r t m e n t ? is To m a i n t a i n financial viability, I b e l i e v e t h a t e m e r g e n c y d e p a r t m e n t s m u s t b e c o m e m o r e cost-efficient. E m e r g e n c y n u r s e s p l a y a vital role in a c h i e v i n g

this goal of efficiency. For p a t i e n t s w i t h m i n o r or n o n u r g e n t c o n d i t i o n s , t h e fixed c o s t s of p r o v i d i n g p h y s i c i a n a n d n u r s e staffing h a v e b e e n f o u n d to a c c o u n t for a b o u t 92% of t h e total costs. 19 T h e s e d a t a s u g g e s t t h a t b e t t e r c o s t - e f f i c i e n c y for p a t i e n t s w i t h m i n o r p r o b l e m s c a n b e s t b e a c h i e v e d t h r o u g h altern a t i v e staffing p a t t e r n s , s u c h a s t h e u s e of n u r s e p r a c t i t i o n e r s , or t h e u s e of "fast tracks" t h a t p r o v i d e s e r v i c e s in less costly s e t t i n g s .

T h e d i v e r s i o n of i n s u r e d p a t i e n t s a w a y from emergency departments compounds the financing problem by reducing the p o o l of p a t i e n t s w h o c a n p a y for their care, a n d m a y l e a d to t h e c l o s u r e of m a n y emergency departments.

E m e r g e n c y n u r s e s also p l a y a n i m p o r t a n t role in r e d u c i n g c o s t s a m o n g m o r e s e r i o u s l y ill a n d injured p a t i e n t s . Ancillary s e r v i c e s m a k e u p a m u c h h i g h e r p r o p o r t i o n of t h e total c o s t s of ED s e r v i c e s for u r g e n t visits. 19 E m e r g e n c y n u r s e s c a n w o r k w i t h e m e r g e n c y p h y s i c i a n s to e n s u r e t h e e x p e d i t i o u s a n d a p p r o p r i a t e o r d e r i n g a n d i n t e r p r e t i n g of l a b o r a t o r y a n d i m a g i n g t e s t s . A v o i d i n g u n n e c e s s a r y or d u p l i c a t e t e s t i n g in the emergency department could substantially r e d u c e t h e total c o s t s of u r g e n t visits. Will R o g e r s o n c e said, "the p r o b l e m is t h a t t h e future is n o t w h a t it u s e d to be." M a n y e m e r g e n c y physicians, administrators, and emergency nurses are p e s s i m i s t i c a b o u t their future. On t h e contrary, I a m h i g h l y o p t i m i s t i c a b o u t t h e future of e m e r g e n c y m e d i c i n e ! We are truly on t h e forefront of m o s t of t h e i m p o r t a n t i s s u e s f a c i n g s o c i e t y , s u c h a s AIDS, domestic violence, drug abuse, and traumatic injuries. E m e r g e n c y d e p a r t m e n t s a r e u n i q u e l y s i t u a t e d to p l a y a n i n c r e a s i n g l y i m p o r t a n t role in our nation's health care system. T h e c o n t i n u o u s availability of h i g h - q u a l i t y e m e r g e n c y s e r v i c e s is a n a b s o l u t e e s s e n t i a l of a n y i m a g i n able health care system. As emergency departments b e c o m e p a r t of i n c r e a s i n g l y c o m p l e x h e a l t h c a r e syst e m s , however, e m e r g e n c y n u r s e s f a c e a g r e a t e r c h a p l e n g e - - a n d o p p o r t u n i t y - - i n e n s u r i n g t h e s u c c e s s of

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e m e r g e n c y d e p a r t m e n t s . By b e i n g loyal a n d c o m m i t t e d to t h e p r i n c i p l e of a l w a y s d o i n g w h a t is b e s t for our p a t i e n t s , w e c a n w o r k t o g e t h e r to a c h i e v e h i g h - q u a l ity, c o m p a s s i o n a t e , a n d c o s t - e f f i c i e n t ED care.

References 1. Clinton W. Televised address to the Joint Session of Congress and the nation. September 23, 1993. 2. McCaig LE National Hospital Ambulatory Medical Care Survey: 1992 emergency department summary--advance data from vital and health statistics; no 245. Hyattsville, MD: National Center for Health Statistics, 1994. 3. Shalala D. Most emergency cases aren't. The Washington Post 1994 Mar 3. 4. Baker LC, Baker LS. Excess cost of emergency department visits for non-urgent care. Health Aft 1994;13:162-71. 5. Ullman R, Block JA; Stratmann WC. An emergency room's patients: their characteristics and use of hospital services. Med Care 1975;13:1011-20. 6. Dutton DB. Patterns of ambulatory health care in five different delivery systems. Med Care 1979;17:221. 7. Neighbors HW. Ambulatory medical care among adult black Americans: the hospital emergency room. JAMA 1986;78:275-82. 8. Bohland J. Neighborhood variations in the use of hospital emergency rooms for primary care. Soc Sci Med 1984; 19:1217-26. 9. Solon JA, Rigg RD. Patterns of medical care among users of hospital emergency units. Med Care 1972;10:60-72.

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10; Hayward RA, Shapiro MF, Freeman HE, Corey CR. Inequities in health services among insured Americans. N Engl J Med 1988;318:1507-12. 11. White-Means SI, Thornton MC. Nonemergency visits to hospital emergency rooms: a comparison of blacks and whites. Milbank Memorial Fund Quarterly 1989; 67:35-57. 12. General Accounting Office. Report to the chairman, Subcommittee on Health for Families and the Uninsured, Committee on Finance, US Sen at e- - em er g en cy departments: unevenly affected by growth and change in patient use (publication no GAO/HRD-93-4). Washington, DC: Government Printing Office, 1993. 13. American Hospital Association: AHA hospital statistics. Chicago: AHA, 1997. 14. Winslow R. Emergency-room visits fall as HMOs target overuse. Wall Street Journal 1996 Mar 7:B2. 15. Williams RM. The costs of visits to emergency departments. N Engl J Med 1996;334:642-6. 16. Saywell RM Jr, Nyhuis AW, Cordell WH, et al. An analysis of reimbursement for outpatient medical care in an urban hospital emergency department. Am J Emerg Med 1992;10:8-13. 17. Mitchell TA, Remmel RJ. Levels of uncompensated care delivered by emergency physicians in Florida. Ann Emerg Med 1992;21:1208-15. 18. Emergency Medical Treatment and Active Labor Act, PL 99-272, 42 USC §1395 dd (1985) (renamed 1989). 19. Williams RM. Distribution of emergency department costs. Ann Emerg Med 1996;28:671-6.