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.

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  • Mike

    “emergency rooms, however, have a vital role in the emerging health care
    delivery system and can even become partners in delivering appropriate

    So why are we still calling them emergency rooms, when their new accepted function is as (very expensive) general health care delivery system outlets?

    And will we still have actual emergency rooms somewhere, like for actual emergencies?

  • buzzkillerjsmith

    ERs are victims, not villains. Spend a little time in an ER and you will see.

  • Jess

    “If ERs are to play a greater role as partners in a redesigned health care system…”

    …then we shouldn’t call them ERs (or EDs) any more, but “extended primary care centers” or something similar, and as previously pointed out, EMTALA should not apply, since it was meant to guarantee free treatment in emergency cases only, not for routine primary healthcare needs.

    For what it’s worth, the UK is having the same problem with their ERs… and they’ve got free universal health care for all, so it’s not like overuse of their Accident & Emergency departments for decidedly non-emergent issues can be attributed to lack of access to affordable (free!) primary care.

    And even if the average ER visit is “just” $900, that’s a lot of money to be paying for what in many cases could have been taken care of in a $75 office visit.

  • bill10526

    Medical economics is not the same as grocery store economics. A community makes huge fiscal commitment in having a hospital. The money has to come from somewhere. England uses taxes. We in America used community rated insurance programs – the Blues. Some jackass tried to make a competitive insurance market. Companies competed all right – on their ability to underwrite, and as was to be expected, cost socialization was wrung out of the system, and the market for individual insurance collapsed in New York State.

    You can’t save much money by having a more accurate billing systems. The hospital’s capital and operating expenses have to be covered.

    It is the totality of medicare care that has to be reduced, especially in extending life for very old folks. Doctors actually cured the pancreatic cancer for a lady I knew. In doing so they burned her stomach lining, and she was in pain and required loads of treatment in the two or three years provided to her. This is a difficult problem because the woman was was a sweet lady.

    The not-really-E ER care that I observe consists of waiting lines to assembly line service at full utilization. I can’t see how care could be more efficient.

  • medicontheedge

    I think of my ED as a walk-in clinic that is capable of handling emergencies…. It makes it easier to deal with the “non-emergencies”, abuse and misuse.

  • WarmSocks

    “The average cost of an ER visit is $900″

    Really? I had the misfortune to be in ER twice this weekend. First time, the bill was $3567 for the hospital and $390 for the doctor (who missed what should have been an easy dx since I was sent there by urgent care with a tentative dx). Second time the bill was $4696 for the hospital and another $390 for the doctor who figured it out.

    If I’m ever in an ER again, it will be because I was unconscious and couldn’t refuse treatment.

  • William Plaster

    The area should be renamed as Emergency Room/Outpatient Clinic, albeit a very expensive clinic.

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