Freestanding emergency departments, which provide emergency medical care but are physically separate from hospitals, charge many times more than other providers for the same care, according to a new analysis by UnitedHealth Group.
(Standard disclaimers apply: Yes, the nation’s biggest insurer has some skin in the game here on ER costs. But there’s also plenty of other evidence that ER costs are indeed very high.)
How it works: Freestanding ERs often don’t provide treatment for common emergencies like trauma, strokes and heart attacks, per my colleague Caitlin Owens.
Only 2.3% of visits to freestanding emergency departments are for actual emergency care.
The number of these facilities increased from 222 in 2008 to 566 in 2016.
In Texas, the average cost of treating common conditions at a freestanding emergency department is 22 times greater than treatment at a doctor’s office, and 19 times more than at an urgent care center.
If the location of care was changed to one of these cheaper alternatives, it’d save more than $3,000 per visit.
Freestanding emergency departments are disproportionately located in affluent areas that have access to other providers, and in Texas, less than one in four receive ambulances.
The bottom line: It is much, much cheaper to go see your family doctor if you have a fever — the most common diagnosis at Texas freestanding emergency departments.
Mayor Bill de Blasio announced Tuesday a plan to “guarantee health care to all New Yorkers.” Responding to what he described as Washington’s failure to achieve single-payer health insurance, the mayor laid out a “transformative” plan to provide free, comprehensive primary and specialized care to 600,000 New Yorkers, including 300,000 illegal immigrants. “We are saying the word ‘guarantee’ because we can make it happen,” he announced, pledging to put $100 million toward the new initiative.
If spending an additional $100 million is all it takes to pay the health costs of a half-million people, you may wonder why New York City Health + Hospitals (HHC) is going broke spending $8 billion annually to treat 1.1 million people. The answer: Mayor de Blasio is not really proposing anything new; nor is he planning to expand services or care to anyone currently ineligible. All of New York City’s uninsured—including illegal aliens—can go to city hospitals and receive treatment on demand. The mayor is trying to do what some of his predecessors attempted—shift patients away from the emergency room and into primary care, or clinics. In 1995, for instance, then-mayor Rudy Giuliani empaneled a group of experts to address the future of the city’s public hospitals. The panel concluded, in the words of a Newsday editorial, that “for patients, emphasis would be on primary care instead of hurried emergency-room sessions and days of hospitalization.”
The tendency of a segment of the population to avoid the health-care system until a critical moment, relying in effect on emergency rooms for primary care, has been the knottiest problem in public health for decades. Letting simple problems fester makes them more expensive to treat. Using ERs designed to handle resource-intensive trauma situations for basic medical problems is inefficient and wasteful. The city has spent lots of money trying to convince poor, often dysfunctional people to develop regular medical habits by signing up for Medicaid and getting a primary-care doctor.
De Blasio makes it sound as though illegal immigrants have not been able to get health care until now. But in 2009, Alan Aviles, then the city’s hospitals chief, spoke of “hundreds of millions of dollars in federal funds that cover the costs of serving uninsured patients including undocumented immigrants.” Aviles said that the city was renowned for its “significant innovations in expanding access to care for immigrants, including our financial assistance policies that provide deeply discounted fees for the uninsured, our comprehensive communications assistance for limited English proficiency patients, and our strictly enforced confidentiality policies that afford new immigrants a sense of security in accessing needed care.”
In 2013, Lincoln Hospital in the Bronx announced a new “Integrated Wellness Program” targeting seriously mentally ill people with chronic health problems—the same population that tends to be uninsured, to neglect their own care, and to wind up in the emergency room when their diabetes or cardiovascular disease catches up with them. “At Lincoln, we aim to establish best practices that combine physical and mental health—two services which have historically been treated separately,” said Milton Nuñez, then as now Lincoln’s director—words not much different from what Chirlane McCray said at Tuesday’s “revolutionary” press conference.
HHC director Mitchell Katz practically admitted that the mayor’s announcement of guaranteed health care for all is just fanfare, amounting to more “enabling services” for already-existing programs. Asked if uninsured people—largely illegal immigrants—can get primary care now, Katz explained, “you can definitely walk into any emergency room, you can go to a clinic, but what is missing is the good customer service to ensure that you get an available appointment. . . . that’s what we’re missing and the mayor is providing.”
Dividing $100 million by 600,000 people comes to about $170 per person—perhaps enough money to cover one annual wellness visit to a nurse-practitioner, assuming no lab work, prescriptions, or illnesses. Clearly, the money that the mayor is assigning to this new initiative is intended for outreach—to convince people to go to the city’s already-burdened public clinics instead of waiting until they get sick enough to need an emergency room. That’s fine, as far as it goes, but as a transformative, revolutionary program, it resembles telling people to call the Housing Authority if they need an apartment and then pretending that the housing crisis has been solved. Mayor de Blasio is an expert at unveiling cloud-castles and proclaiming himself a master builder. His “health care for all” effort seems little different.
Phoenix-based FastMed Urgent Care has signed a definitive agreement to acquire NextCare Holdings of America, a Mesa, Arizona-based provider of urgent care and occupational medical services.
The combined company will have 251 clinics in 10 states — merging FastMed’s 110 clinics in Arizona, Texas and North Carolina with NextCare’s 141 in Arizona, Colorado, Kansas, Missouri, New Mexico, North Carolina, Oklahoma, Texas, Virginia and Wyoming.
The deal, which is subject to regulatory approvals, is expected to close within 60 days.
Dive Insight:
The shift to value-based care and greater use of alternative care sites is one factor fueling growth in urgent care centers. Meanwhile, the million of Americans newly insured under the Affordable Care Act and a growing aging population has driven up emergency room volumes.
In a 2015 survey, 75% of emergency department physicians said visits had increased over the past year. The result is an overtaxed emergency staff and long wait times for patients. By contrast, urgent care offers medical care when and where patients need it and at a lower price point.
According to MarketsandMarkets, the global urgent care market will reach $26 billion by 2023, growing at a compound annual growth rate of 5.3%. Driving growth are lower costs and shorter wait times, growing investment in the sector, aging of populations and strategic partnerships between urgent care providers and hospitals.
In July, Morristown, New Jersey-based Atlantic Health System and MedExpress partnered to improve urgent care access and care coordination between the companies. The collaboration will allow MedExpress’ urgent care patients to get care at an Atlantic Health facility if more advanced care is needed.
And in October, Walgreens announced a strategic collaboration with Michigan-based McLaren Health Care aimed at improving health and pharmacy services. The vertical pact came as CVS Health and Aetna were wrapping up their megamerger.
A gunman opened fire at the Mercy Hospital & Medical Center campus in Chicago the afternoon of Nov. 19, killing a Chicago police officer, a physician and a first-year pharmacy resident, according to CBS Chicago.
The reported gunman, 32-year-old Juan Lopez, was killed by a police bullet to the abdomen, but the Cook Count Medical Examiner’s Office noted on Nov. 20 he also sustained a self-inflicted gunshot wound to the head, according to ABC 7.
The shooting stemmed from a domestic violence incident involving Mr. Lopez’s former fiancee, Tamara O’Neal, MD, an emergency room physician, according to WGN 9. The shooting began as an argument in the hospital parking lot between Mr. Lopez and Dr. O’Neal, Mr. Lopez’s first victim.
Dayna Less, 25, a pharmacy resident who recently graduated from Purdue University, was shot as she left an elevator, according to WGN 9. Chicago police officer Samuel Jimenez, 28, was in a shootout with Mr. Lopez and later died after being taken to University of Chicago Medicine — a level 1 trauma center. He joined the force in February 2017, theChicago Tribune reports.
At the time of the attack, Chicago Police Department spokesperson Anthony Guglielmi tweeted that there were “reports of multiple victims.”
CBS Chicago cited dispatch reports that a woman had been shot, as well as an officer.
About 200 patients were being treated at Mercy, but authorities only evacuated the hospital’s emergency room.
Mercy Hospital posted a tweet at 2:41 p.m. Nov. 19 stating, “A shooting took place at Mercy Hospital & Medical Center this afternoon. The shooting at Mercy Hospital is over. Chicago Police Department have secured the hospital and patients are safe.”
Mercy conducted an active shooter drill just last month, Mercy CMO Michael Davenport told the Chicago Tribune.
Illinois Health and Hospital Association President and CEO A.J. Wilhelmi issued the following statement about the incident:
“On behalf of our 212 hospital members and their 250,000 healthcare employees, the Illinois Health and Hospital Association expresses our condolences to the family and friends of the victims of the senseless act of violence that occurred at Mercy Hospital in Chicago. We are incredibly saddened by the tragic loss these victims and their families have suffered. This was an unexplainable act that took the lives of three people who went to work every day to protect and save lives in their community. We owe it to them to find ways to stop the violence, and the hospital community remains dedicated to helping in that important endeavor.”
The shooting comes in the wake of a nationwide discussion among healthcare professionals about gun violence after a controversial tweet by the National Rifle Association. Physicians have been responding to the tweet — which told “self-important anti-gun doctors to stay in their lane” — by sharing photos and stories about their experiences treating victims of gun violence.
The California Health Care Foundation recently published the latest edition in its wide-ranging Almanac series, California Emergency Departments: Use Grows as Coverage Expands. This timely publication is loaded with data that paint a detailed picture of broad trends in hospital emergency department (ED) care across the state. Recently, I talked about the Almanac’s findings with Kristof Stremikis, who directs CHCF’s Market Analysis and Insight team. Senior program officer Robbin Gaines produced the report as part of the team’s mission to promote greater transparency and accountability in California’s health care system.
Q: California’s 334 hospital emergency departments provide a vital service to every part of the state. How are they faring?
A:The biggest takeaway from our Almanac is that California EDs are serving significantly more patients than they were just 10 years ago. When we control for population growth, the rate of ED use has grown 33% over the last decade, from 280 to 371 visits per 1,000 residents per year. Visits are up regardless of the type of insurance a patient has. Now, there’s a lot to unpack and understand about these figures, but when we think about the future, it’s important to realize that we are likely to continue to see increased demand for emergency services as the population ages. From a policy standpoint, we need to double down on efforts to ensure patients have access to the care they need in the most appropriate setting, be that an emergency department or somewhere else.
Q: What’s behind the increase in emergency department visits?
A:We don’t exactly know why more people are showing up in California emergency departments, but we do know ED use has been on the rise for at least 30 years. Across the nation, emergency departments have long been a major source of care across all categories of patients. We also know that regardless of source of coverage, California’s public and private payers are covering more visits per enrollee than they were a decade ago.
Sometimes ED use cannot be avoided. A few data points in our most recent Almanac suggest that a significant proportion of the rise in ED visits is due to clinically necessary visits. When we look at the acuity of ED visits, moderate and severe symptoms — including life-threatening ones — constituted all of the increase over the past decade. The number of visits with low or minor acuity fell. That is a big deal. This happened as the number of Californians with Medicare and Medi-Cal increased substantially during this period, and these programs cover a lot of older and sicker Californians who are more likely to need emergency care.
We also know that some of this rise is attributable to visits that could have been avoided. Precisely identifying what portion of visits are avoidable is difficult, and we do not include an estimate in our Almanac. But we know they are there — public and private payers in California have been working hard for years to identify and prevent unnecessary ED use.
Q: How big a problem are avoidable visits? And why would someone go to the ED if they don’t need to?
A:Available research does not point to a precise percentage of ED visits that could be avoided. The most conservative definition classifies as avoidable things like visits for low-acuity mental health and dental issues. Using that methodology, perhaps 3% of ED visits in California did not need to happen. But other estimates are much higher, sometimes exceeding 70% in the commercial market. What is clearer are the reasons why patients go to the ED over other options. Some people can’t take off work when doctors’ offices are normally open. Others have limited or negative perceptions of alternatives. Researchers have found that there is also an increasing number of patients who are referred to the ED by their physician.
Q: The number of ED departments has stayed flat during this period of growth. How are hospitals handling the additional visits?
A: The number of dedicated ED spaces for individual patients, or “treatment stations,” has increased almost 30% over the last decade. In 2016, the average treatment station handled 1,846 patients, or approximately five visits per day, up from 1,656 patient visits in 2006. Despite a 44% increase in total ED visits between 2006 and 2016, the number of visits by patients who left without being seen fell by almost 15%. That is remarkable.
Q: The data show a lot of regional variation in ED use. Are some regions or health plans better than others at addressing ED challenges?
A: ED use does vary widely, from a low of 311 visits per 1,000 residents in Orange County to a high of 516 in the Northern and Sierra region. Patient characteristics (such as age, race, and income), lack of alternatives, and physician referral patterns may all play a role in the relatively high rates of ED use in certain parts of the state. Among the promising strategies that can be deployed regionally are increasing access to primary care services in rural areas through telehealth, providing outreach and case management to frequent users, and addressing the needs of patients with behavioral health and substance use disorders.
Q: The Almanac shows an increase in the percentage of ED visits that are for Medi-Cal beneficiaries, due in large part to the expansion of eligibility for the program. What else would explain why the percentage from Medi-Cal went up?
A: Medi-Cal paid for a larger proportion of California’s ED visits in 2016 than in 2006 because it now covers many more Californians. When we control for the number of beneficiaries covered by various programs, a Medi-Cal member is less likely to end up in an emergency room than someone covered by Medicare, though more likely than someone with private insurance. Regardless of insurance type, the number of visits per enrollee is increasing.
Though we did not include the data in our Almanac, the state closely tracks ED use among Medi-Cal beneficiaries on its monthly managed care performance dashboards. Elderly and seriously disabled beneficiaries remain the most likely to visit the ED, at almost twice the rate of the next highest group, which is the Medi-Cal expansion population. Fortunately, the rate among the expansion population has decreased over the last several years, from about 70 visits per 1,000 member months in January 2014 to around 50 in June 2017. This may reflect managed care plan efforts to connect new patients with primary care “medical homes.”
When we look at the acuity of ED visits, moderate and severe symptoms — including life-threatening ones — constituted all of the increase over the past decade. The number of visits with low or minor acuity fell. That is a big deal.
Q: Critics of the Affordable Care Act (ACA) cite increasing ED visits, especially from people in the expansion population, as evidence that the law isn’t working in California. Is that a fair criticism?
A: Both critics and proponents of the ACA probably agree that the law is complicated — and complicated reforms need to be carefully unpacked and evaluated over long periods of time. One of the law’s major goals was to expand access to insurance coverage, and on this measure the law has made tremendous progress. As of 2016, only 7% of California residents lacked health insurance. Expanding Medi-Cal was the cornerstone of that success.
Q: What’s being done to address avoidable ED use at a local level?
A: On the public side, the ongoing Whole Person Care pilot program in Medi-Cal is one example of where innovation is taking place on this issue — 17 of the 25 counties participating in the program have made it an explicit goal to reduce avoidable ED use. Just last week, 17 health systems, including several in California, announced a major initiative to reduce avoidable ED use among Medicaid beneficiaries. This is likely to include some combination of enhanced access to primary care, behavioral health care, and social services. On the private side, the issue of avoidable ED use has attracted the attention of California payers like Anthem, Blue Shield, and Kaiser Permanente for several years. These groups have also worked to increase access to primary care using medical homes that offer after-hours and weekend care.
Another approach involves targeting those patients who are frequent ED users. In California, one recent study suggested frequent users were less than 10% of the population but accounted for nearly one-third of the visits. Intensive case management, health coaching, and community support for high users are all promising interventions. Finally, specific case management programs for substance use disorder and mental health problems are being considered.
Q: A report like this Almanac is obviously limited by the data that is currently available. What additional data points would you like to have for future issues?
A: I think the most important metric to focus on is potentially avoidable use of the emergency departments rather than the overall number of visits. While the California data we report here certainly do capture the universe that includes avoidable use, it does not allow us to parse out the differences among the subsets. It is always helpful to have additional research to help identify this type of visit, the reasons why a patient decided to go to the ED, and the strategies that would be most effective at helping patients get their care in more appropriate settings.
St. Louis-based Ascension rolled out a national ad campaign June 4 across television, radio, billboards and direct mail to promote its online scheduling capabilities, which are available in all 22 Ascension markets.
The campaign is aimed at raising brand awareness and communicating patient scheduling options, even for last-minute or same-day appointments.
“Most of us use technology daily to simplify our lives, and the process of getting the care we need, when and where we need it, should be no different. Online scheduling allows consumers to view available appointments at their preferred location and select a time that fits their busy schedules,” Joseph Cacchione, MD, president of Ascension Medical Group, said in a press release. “As we work to improve access to compassionate, personalized care, we must also ensure we are letting consumers know about the new and innovative ways in which we are making the healthcare delivery process easier for them.”
Ascension currently offers online scheduling across 1,200 providers in primary care, urgent care and emergency department care. It has plans to add online scheduling capabilities for specialists and diagnostic and imaging services in the future.
Even before media reports and a congressional hearing vilified Valeant Pharmaceuticals International for raising prices on a pair of lifesaving heart drugs, Dr. Umesh Khot knew something was very wrong.
Khot is a cardiologist at the Cleveland Clinic, which prides itself on its outstanding heart care. The health system’s internal monitoring system had alerted doctors about the skyrocketing cost of the drugs, nitroprusside and isoproterenol. But these two older drugs, frequently used in emergency and intensive care situations, have no direct alternatives.
“If we are having concerns, what is happening nationally?” Khot wondered.
As it turned out, a lot was happening.
Following major price increases, use of the two cardiac medicines has dramatically decreased at 47 hospitals, according to a research letter Khot and two others published Wednesday in the New England Journal of Medicine.
The number of patients in these hospitals getting nitroprusside, which is given intravenously when a patient’s blood pressure is dangerously high, decreased 53 percent from 2012 to 2015, the researchers found. At the same time, the drug’s price per 50 milligrams jumped more than 30-fold — from $27.46 in 2012 to $880.88 in 2015.
The use of isoproterenol, key to monitoring and treating heart-rhythm problems during surgery, decreased 35 percent as the price per milligram rose from $26.20 to $1,790.11.
The two drugs, which are off patent, have long been go-to medicines for doctors.
“This isn’t like a cholesterol medicine; these are really, very specialized drugs,” says Khot, who is lead author on the peer-reviewed research letter. When patients get the drugs, he says, “they are either sick beyond sick in intensive care or they’re under anesthesia [during] a procedure.”
Valeant bought the drugs in early 2015 from Marathon Pharmaceuticals.Last year, Valeant announced a rebate program to lower the price hospitals paid for the drugs.
And Valeant’s Lainie Keller, a vice president of communications, says the company is committed to limiting price increases.
“The current management team is committed to ensuring that past decisions with respect to product pricing are not repeated,” Keller says.
Pharmacist Erin Fox, the director of drug information at University of Utah Health Care, said the findings by Khot and his colleagues reveal “exactly what a lot of pharmacists have been talking about. When prices are unsustainable, you have to stop using the drug whenever you can. You just can’t afford it.”
Fox says her Utah health system has removed isoproterenol from its bright-red crash carts, which are stocked for emergencies like heart attacks. But Nitroprusside is more difficult to replace.
“If you need it, you need it,” Fox says. “That’s exactly why the usage has not gone down to zero, even with the huge price increases.”
Cleveland Clinic leaders spent months investigating each drug’s use and potential alternatives, Khot says.
“We’re not going to ration or restrict this drug in any way that would negatively impact these patients,” Khot says, adding that he hopes to do more research on how the decreased use of both drugs has affected patients.
Dr. Richard Fogel is a cardiologist and electrophysiologist at St. Vincent, an Indiana hospital that’s part of Ascension, a large nonprofit chain with facilities in 22 states and the District of Columbia. He told a Senate committee last year that the cost of the two drugs alone drove a nearly $12 million increase in Ascension’s spending over one year.
“While we understand a steady, rational increase in prices, it is the sudden, unfounded price explosions in select older drugs that hinder us in caring for patients,” Fogel told the committee.
The NEJM letter also analyzed the use of two drugs that remained stable in price over that time period, as a control group — nitroglycerin and dobutamine. The number of patients treated with nitroglycerin, a drug used for chest pain and heart failure, increased by 89 percent. Khot warns that the drugs can’t always be used as substitutes.
An MIT study suggests hospitals get more bang for their buck when they spend money on emergency care versus long-term care.
The study, which was published in the current issue of Journal of Health Economics, compared data on outcomes between hospitals that make a substantial upfront investment in inpatient care after a patient experiences an emergency with those that rely more heavily upon skilled nursing facilities and other long-term care options postdischarge.
“We find that patients who go to hospitals that rely more on skilled nursing facilities after discharge, as opposed to getting them healthy enough to return home, are substantially less likely to survive over the following year,” says Joseph Doyle, Erwin H. Schell Professor of Management at the MIT Sloan School of Management, in an article posted on MIT’s news site.
The study sought to weed out inefficiencies in hospital spending that contribute to the higher per capita cost of healthcare in the United States compared to the rest of the world. Statistics from the Organisation for Economic Co-operation and Development peg spending in the United States at 40% higher than the next-highest spender, which MIT notes has led to questions about “significant inefficiencies” in terms of where all that money gets spent.
When the high costs of care get passed along to patients, they can cause a ripple effect in terms of overall population health. In one survey, as many as one in four Americans said they chose to forgo medical care because of prohibitive costs.
The MIT study found that hospitals that spent approximately $8,500 above the average 90-day spend of $27,500 per patient saw a two-percentage-point decrease in their patients’ mortality risk. That compares to findings of a five-percentage-point increase in mortality when hospitals focus their spending on postdischarge nursing facilities.
Doyle suggests these results could form the basis of a new quality metric looking at hospitals with worse outcomes and a higher proportion of downstream spending.
What happens outside the hospital is increasingly important to success, so healthcare leaders need to influence or control care across the continuum.
If you’re running a hospital, one irony in the transformation toward value in healthcare is that your future success will be determined by care decisions that take place largely outside your four walls. If you’re running a health system with a variety of care sites and business entities other than acute care, the hospital’s importance is critical, but its place at the top of the healthcare economic chain is in jeopardy.
Certainly, the hospital is the most expensive site of care, so hospital care is still critically important in a business sense, no matter the payment model. But if it’s true that demonstrating value in healthcare will ensure long-term success—a notion that is frustratingly still debatable—nonacute care is where the action is.
For the purposes of developing and executing strategy, one has to assume that healthcare eventually will conform to the laws of economics—that is, that higher costs will discourage consumption at some level. That means delivering value is a worthy goal in itself despite the short-term financial pain it will cause—never mind the moral imperative to efficiently spend limited healthcare dollars.
So no longer can hospitals exist in an ivory tower of fee-for-service. Unquestionably, outcomes are becoming a bigger part of the reimbursement calculus, which means hospitals and health systems need a strategy to ensure their long-term relevance. They can do that as the main cog in the value chain, shepherding the healthcare experience, a preferable position; but physicians, health plans, and others are also vying for that role. Even if hospitals or health systems can engineer such a leadership role, acute care is high cost and to be discouraged when possible.
HENRY KOTULA 