Are ER services really the cost villains?

Maligned over the last decade as places to avoid because of the price of the care they delivered, a study by the RAND Corporation goes a long way toward improving the image of hospital emergency rooms (ERs). The ER price tag was too high for the insurance companies that paid the bills, so many of them tried to discourage ER use by designing policies with high coinsurance and copayments to make patients think twice before going to one.

The RAND study found that emergency rooms, however, have a vital role in the emerging health care delivery system and can even become partners in delivering appropriate care. A key finding of the study: doctors are actually sending patients to emergency rooms — a notion that contradicts the current inaccurate narrative that mostly uninsured patients are flooding ERs.

Dr. Arthur Kellermann, an ER doctor and a senior RAND researcher told me in a phone interview that “doctors said ‘the ER is my overflow valve. It’s where I send complicated patients. It’s becoming my diagnostic center.’” Today’s primary care docs may have little choice, Kellermann explained, because they are seeing more and more patients and have less time to spend with them and do complicated workups.

RAND researchers found that hospital emergency rooms have become a gateway for hospital admissions and are actually helping to reduce the number of preventable admissions. That could, of course, save money.

Kellermann said it’s a “fact-resistant idea that emergency rooms are inappropriate sites of care.” Researchers also discovered that people use them because they have no other options. They don’t use them instead of seeking care from “nine to five” doctor’s offices, a notion that has also become part of the national narrative about emergency rooms.

Hospitals seeking new ER patients are responding to demands for convenient health care by advertising, sometimes on billboards, how many minutes prospective patients have to wait. In many parts of the country, they are targeting upscale suburbanites who are more likely to have insurance and can boost the hospital’s bottom line. Emergency room care is still some of the most expensive care around.

Even though it’s costly care, ER services are not the cost villains that politicians and others have portrayed them to be. Kellermann told me that ERs account for between 3 and 6 percent of total health care spending compared to 31 percent for inpatient hospital stays. “The average cost of an ER visit is $900. It’s 10 times that for the average hospital stay,” he pointed out.

What’s the bottom line for patients in all this? If ERs are to play a greater role as partners in a redesigned health care system, will insurance companies redesign their policies to be less punitive and lower the financial barriers to using the ER? That policy seems to contradict the hospitals’ push to bring more patients through the ER entrance. And what about those busy doctors sending more patients to ERs for their highly skilled diagnostics and test equipment?

But then again, logic is not the coin of the realm in America’s increasingly for-profit health care system.

Trudy Lieberman is a journalist and an adjunct associate professor of public health, Hunter College. She blogs regularly on the Prepared Patient Forum.

View 7 Comments >