Increasing hospital revenues through urgent care referrals

Not long ago, Tracy Hume, a freelance writer who lives in Greeley, Colorado, sent me an email posing this question: “Do ER-affiliated urgent care providers ever try to escalate patients to the ER when it is not medically necessary?”

It seems that over the July 4th weekend, Tracy’s teenage son was complaining of a headache, nausea and abdominal pain, and was vomiting. He doesn’t complain much, she said, so thinking that maybe he was seriously sick, she took him to an urgent care center that was part of her insurance plan’s network.

A clerk asked about his symptoms, but instead of letting him see a doctor at the center, she quickly referred him to the emergency room, across the street, that just happened to be part of the same hospital system as the urgent care center. The clerk told Hume that since her son was experiencing abdominal pain, he needed a CT scan. The urgent care center did not have the capability to do one.

Hume thought twice. The urgent care center co-pay was $75; at the ER it was $250. Plus, no one at the urgent care center had bothered to examine her son to see if he even needed a CT scan, an overused procedure, especially in the nation’s emergency rooms. In today’s ERs, patients are getting scans at rates five times higher than in the mid-1990s. Dr. Rita Redberg, a cardiologist at the University of California San Francisco Medical Center, has pointed out, “CT scans, once rare, are now routine. One in ten Americans undergoes a CT scan every year, and many get more than one.”

Never mind the wasted health care dollars! Think of all the unnecessary radiation that patients who don’t need CT scans are getting. Redberg says, “The rate of medical imaging using high doses of radiation, particularly CT scans, has increased more than sixfold between the 1980s and 2006.”

What’s causing this overdose of CT scanning? Doctors’ fears of malpractice claims are one factor, for sure, but there is also pressure on facilities to use them. Once hospitals have invested in CT scanners and other imaging equipment, they need to utilize them to recoup their costs and generate revenue.

Was this urgent care center sending some patients to its related hospital ER, clearly a place of high-priced care, to gin up revenue for the system’s bottom line? Hume told me that the two hospital systems in Greeley, a city of about 100,000 people, are aggressively competing for business, and each one has built “fancy, fully-equipped new emergency rooms” located on the affluent side of town within two miles of each other.

If cross-marketing of services works in banking and other industries, why wouldn’t it work in hospitals? Worried moms just might bite and take their kids across the street for a CT scan, especially if the required co-pay or co-insurance were not a drain on the pocketbook.

In a 2011 report for Kaiser Health News, Phil Galewitz wrote that hospitals are using “aggressive marketing of ERs to increase admissions and profits.” That’s also what’s behind all those new digital billboards — the ones advertising short ER wait times.

Hume’s experience with her son’s illness suggests that referring patients from urgent care centers might be a logical source of additional revenue for emergency rooms. She wrote, “I sometimes wonder if the hospital is using the urgent care center as a front just to shuttle people over to the ER and increase their ER utilization numbers. Which seems ridiculous, as overuse of ERs is purported to be one reason health care costs are escalating.” One reason for health reform was to help people access insurance so they would go to a doctor’s office instead of flocking to expensive emergency rooms.

Do marketing and the prospect of profits trump a much-touted principle of the Affordable Care Act? What’s a patient to do? Maybe this is one time shopping around for health care might really mean something.

Since this wasn’t an acute emergency, Hume had time to take her son to another urgent care center not affiliated with either hospital system. That center accepted her $75 co-pay, a physician’s assistant examined her son, asked him about his symptoms, felt his abdomen, diagnosed gastroenteritis and prescribed anti-nausea medication. He was fine in a couple of days. No CT scan, no unnecessary radiation, no expensive co-pay.

Trudy Lieberman is a journalist and an adjunct associate professor of public health, Hunter College, New York, NY. She blogs on the Prepared Patient blog.

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