Emergency department utilization and its impact on health care reform

by James P. Davison, DO

Emergency department utilization and its impact on health care reform legislation has been a hot topic of conversation in healthcare journals and the blogosphere. It is a tenet of the currant legislation that ER visits and cost growth will go down, contributing to a decreased health cost growth curve.

Opponents state the newly insured will flock to the nation’s emergency rooms. Proponents point to and are betting on funding contained in the bill, $11 billion dollars to double the population severed by Community Health Clinics and $250 million dollars to increase the number of primary care providers, as evidence reform will keep the newly insured out of the emergency room and decrease unnecessary visits. Some feel that being only 3% of the overall health cost in U.S., ER expenses and small fluctuations in ER visits will not affect the overall financial stability of the bill.

The following historical perspective shows that the bills proponents have made a “Bad Bet” and will cost the patients and their providers more than they realize.

The phenomenon of increasing ER utilization and unnecessary ER visits is not limited to the US, but of international scope. All Organisation for Economic Co-operation and Development (OECD) countries are experiencing it and most, except for the US, have taken steps to alleviate the consequences of unbridled ER utilization. A country’s primary care physician density does not protect it from the forces causing the increased utilization. Countries with many more PCPs/1000 than the US and those with fewer all are affected by increasing ER visits. The number of visits declared “unnecessary” remains strikingly similar from country to country, 30-40% of the total visits. Comparing apples and oranges you say?

ER visits in the US have been increasing since the 1950’s. In 1990 there were 90 million ER visits contributing 1.9% of the total US health expenditures. In 2008 there were 124 million visits and a doubling of the percentage of total US costs to 3.7%, about $84 billion. The rate of growth in ER visits is also increasing. From 1990 to 2000 ER visits increased 15%. From 1998 to 2008 visits increased 24%. The year 2008 saw the largest single yearly increase in ER visits on record.

All of this growth occurred during a dramatic rise in the number of primary care physicians. In 1990 there were a total of 210,600 PCPs with 143,100 office-based. Those numbers rose 56% and 66% respectively to 328,800 total and 237,900 office-based PCPs. Primary care physician density, PCPs/1000 population, increased over 40%. The US population grew 25% over the same time period. For various reasons, it is doubtful that the above large increases in PCPs or their density can be maintained, even if they were able to bend the ER growth curve.

As the number of PCPs was increasing, Federal and state legislation increased the population severed by community health centers from 6 million in 1991 to 20 million by 2008, all without changing ER utilization by those on Medicaid or the uninsured. The number of Urgent Care Centers more than doubled to over 8000 sites with total visits now exceeding 124,000,000 visits per year. The year 2000 saw the onset of the retail clinic industry growing to over 1200 locations and a rapid growth in the work-site clinic industry by private and governmental employers.

None of the above areas of health care delivery have been able to bend the ER cost curve downward and as mentioned before it has increased. At 3% of the total health care costs, how important can it be?

ER expenses for the US in 2010 will be approximately $94 billion and estimates place $18 billion of that as “unnecessary”. With 32 million more people insured, millions of baby boomers becoming 65 every year, life expectancy increasing, and multiple other ER cost drivers, a 1-2 % yearly increase in the ER cost growth curve is not only likely, but almost certain.

What would this mean? At a 6% annual growth rate, the total ER bill for the US will climb from $94 billion in 2010 to $170 billion in 2020 for a decade total of $1.323 trillion. A 1% rise in the growth rate to 7% will increase the total to $186 billion in 2020 and $1.399 trillion for the decade or $76 billion above the historical growth rate. If the growth rate continues at 7% instead of 6% the difference grows to a total of $ 372 billion for the decade 2021-2030. Likewise, a 1% decrease in the ER growth curve over the next 20 years would save about $448 billion dollars.

Who will pay for the extra $448 billion over the next 20 years? The usual suspects; the patients, employers and private insurance companies, but the government will be responsible for the lion share of the increased costs. The primary care providers and other specialists will pay through decreased reimbursements to balance the increased ER costs. Ironically, it is these same groups who can and must begin to implement more active interventions to reduce the ER cost growth curve.

James Davison is an emergency physician and member of the Hillsborough County Indigent Health Care Plan Task Force in Florida.

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