Special Report: Victims of High Costs and Low Revenue, EDs Close with Chilling Regularity

By: Anne Scheck
Source: Emergency Medicine News
Publication: May 2012 – Volume 34 – Issue 5

Too small to fail. That could be the battle cry of a little emergency department on the high plains of South Dakota, which is struggling to keep its doors open in the tiny city of Martin, the only town in the entire county. In many ways, it is no different from scores of others across the country, as emergency departments that provide care for the underserved fall victim to high costs and low revenue.

It is not that the emergency room, as the ED is invariably called at Bennett County Hospital, doesn’t have a high enough patient load. It is that it is too high, or rather, that the compensation for care is too low. “What happens is that everyone shows up at our door,” said Dale McDonnell, a lifelong resident and longtime member of the Bennett County Hospital board, which oversees the hospital, its ED, and its adjoining nursing home.
Some 200 patients per month are served by the ED, but many are covered by Medicare or Medicaid. Complicating matters, treatment for the local Sioux is almost free under provisions of a nearly 150-year-old federal treaty; the Indian Health Service pays only when the ED visit is a true emergency, Mr. McDonnell explained. “It is not surprising that they [enrolled tribal members] expect this. And we don’t disagree that they have this coming to them,” he said.

Medical clinics supported by the Indian Health Service, which are more than an hour’s drive away, put these facilities out of reach for some Native Americans because of distance, time pressure, or the need for highway transportation.

In fact, when it comes to providing care for Native Americans, which comprise about half of Martin’s 1,100 population, only one point is in contention. Board members believe the Indian Health Service ought to be paying a large share of the expense, but that isn’t occurring, and neither is adequate reimbursement from the Centers for Medicaid and Medicare Services, according to news accounts. The ED’s Medicaid patients, for example, are paid by a different, DRG-based formula than are some other rural hospitals in the state, which means Martin’s ED is paid about half of what other EDs are for the same patients.

And in a classic Catch 22, the 12-bed hospital is seen as among the most “access critical” on a list of critical access facilities in the state. Theoretically, this would make it top-priority for distress-targeted funding aimed at helping shore up such emergency care. But, in fact, this special status has only made it seem more difficult to navigate the bureaucracy, Mr. McDonnell said.

Still, Mr. McDonnell is cautiously optimistic. For one thing, the governor’s office is now taking note, and offering some newfound support. For another, the hospital is the town hub and its biggest employer, meaning the close-knit community is committed to saving its three ambulances and ED. In a place where the badlands meet the sand hills, “we are all survivors, and nothing dies easily out here,” Mr. McDonnell said.

But EDs are dying, and with chilling regularity, as results of a recent study show. Renee Hsia, MD, MSc, the lead author, said the 27 percent decline over the past two decades documented by her and two co-investigators, Arthur Kellermann, MD, MPH, and Yu-Chen Shen, PhD, indicate that low-profit margins are one marker of EDs susceptible to closure, and so is being a safety net hospital. For-profit status and keen market competition are associated with closings as well, she said. (JAMA 2011;305[19]:1978.)

“These aren’t necessarily earth-shattering results in the sense that most people would predict this from our market-driven approach to health care,” said Dr. Hsia, an assistant professor of emergency medicine at the University of California at San Francisco and an emergency physician at San Francisco General Hospital. “But interestingly, after the study was published, there were a lot of people who were surprised that there isn’t some kind of more rational system to decide who gets care — or who gets an emergency department — and who does not.”

The study excluded rural EDs, like the one in Martin, because rural facilities get critical-access funds, noted Dr. Kellermann, the director of RAND Health at the RAND Corp. in Santa Monica, CA. Even so, “emergency room care is a huge issue for rural America,” said Alan Morgan, the chief executive officer of the National Rural Health Association. “There is an ongoing struggle to keep access to this care in America.”

Perhaps nowhere has there been more evidence of this struggle than in California, where agricultural communities are grappling with the same financial pressures as urban centers. This past year, Dr. Hsia and other colleagues from UCSF looked at California EDs, and found, unsurprisingly, that minorities and Medicaid patients were at higher risk of losing their EDs than other groups (Ann Emerg Med; in press).

For the past decade, California has been losing EDs almost routinely. But this is not a West Coast phenomenon or limited to pockets of high immigration. New York City’s St. Vincent’s Hospital in the affluent West Village succumbed to similar financial stress, as did Lenox Hill, which has been characterized as “the boutique hospital of choice for Upper Eastsiders.” It was taken over by North Shore-Long Island Jewish Health System. (New York, October 25, 2010; see FastLinks.)

In fact, St. Vincent’s may have been one of those that showed up in the survey from the American Hospital Association, which Dr. Hsia and her colleagues used to analyze the years 1990 to 2009, when EDs declined from 2,446 to 1,779.

The results of this nationwide study provide a reality check for those who thought the shake-out of EDs was winnowing down, Dr. Hsia said. “I think this offers information that tells us something has to change, and I think that’s important because we do have the ability to change,” she added. Such a shift will take more health care activism and legislative support for financially challenged emergency care. “But I think the momentum is there,” Dr. Hsia said.

In contrast, Sandra Schneider, MD, the immediate past president of the American College of Emergency Physicians, conceded that her attitude is more one of pessimism. “I have to say I am a little bit doom and gloom,” she said, but added that “it has been said that challenges mean opportunities, and that is one of those things that really is true, after all.”
The medical home, which has been promoted as one solution, simply will not provide an answer for many people who need urgent care. It is not, as the charming moniker would suggest, a place where health care consumers can seek care whenever they need it, she said. Instead, it refers to coordinated care, in which their various health care experiences and contacts with providers can be collected and monitored, not fall through the cracks, as has been the case at times. This is unlikely to lighten the load to EDs, said Dr. Schneider, a professor and the chair emeritus of emergency medicine at the University of Rochester in New York.
“Given that the idea of a medical home is just a concept at this point, and we don’t know how it will be operationalized, it’s hard to predict,” Dr. Hsia agreed.

In addition, the burden some legislators believe is being placed on their coffers due to over-reliance on EDs has meant some states are looking at barring payments from Medicaid or Medicare for certain ED visits. Dr. Schneider noted that this idea seems to be gaining traction in Washington State, where Medicaid may be curtailed for ED care if the state passes a proposed law. This seems destined to worsen the situation for at-risk EDs.
Currently, the Washington State Hospital Association is soliciting support to put a stop the effort. “The Washington State Health Care Authority plans to stop paying for all emergency department visits for Medicaid patients when [it] deems those visits ‘not medically necessary’ in the ER,” the association warned on its website (See FastLinks.)

In response, the association is promoting an alternative, and developed a plan with the Washington State ACEP chapter and the Washington State Medical Association. An online petition asks website visitors to join in asking the Washington legislature “to enact a physician-developed plan to reduce emergency visits that will save millions of dollars and still protect patient safety and access to quality care.”

It is presumed that if Washington begins to decline publicly funded care like Medicaid payments to EDs, other states will follow suit. Already there are rumblings in some parts of the country, such as the South and Midwest, that plans with “decline of payment” options make fiscal sense.
When a team of health researchers from the University of Kansas looked at money-losing health care facilities in that state, it found that focus groups of nurses, physicians, administrators, and community leaders in each of 10 places had similar concerns. The overwhelming majority identified aging populations, growing poverty, and declining rates of insured patients as a problem. (Kansas J Med 2009;2[3]:62.)

The uninsured and poor are increasingly blamed for patient overflow in EDs, Dr. Schneider said. And with good cause. A study at her institution, however, showed that ED use, even in the daytime, is often not by those who lack insurance or have no access to primary care.

Patients in the waiting area at her medical center’s ED were surveyed by a colleague, Michael Kamali, MD; he and emergency medicine colleagues found that most of the 400 patients they questioned did, in fact, have physicians, but they could not get in to see them in a timely way. In fact, some of the primary care doctors presumably had advised their patients to go to the ED. (Ann Emerg Med 2011;58[4]:S234.)

In some ways, it only echoes what Rochester researchers found more than 35 years ago. “A subject of particular concern is the type of problems that people bring to the ER because it is evident that, contrary to its traditional function as a facility for urgent medical needs, substantial numbers of people now use the ER for treatment of routine, nonurgent problems,” the investigators wrote in a 1975 study. They noted that a third to a majority of the visits even then were for “problems that might more readily be treated at an outpatient clinic or private doctor’s office.” (Med Care 1975;13[12]:1033.)

Anecdotal accounts encompass stories of patients who prefer using the ED to their own physicians for reasons other than availability. They include a woman who wanted an emergency physician with whom she felt special rapport to become her primary care provider and a man who reported he kept getting ointment and pain pills for an infected knee during office visits, but was ultimately diagnosed in the ED as requiring surgery.
Dr. Schneider noted that one innovation to help answer such need is the freestanding emergency medical center, which has shown success in Texas. The concept was put into practice by Tim Seay, MD, an entrepreneurial emergency physician and a founder of the Greater Houston Emergency Physicians in Houston, which staffs EDs.
Another development cited by Dr. Schneider is paramedics in North Carolina and Texas who make the modern equivalent of the house call of yesteryear by stopping by to check on patients with chronic illnesses, sparing them a trip to the physician office that they need but might not make, which would typically result in an ambulance call. The paramedics stay in touch with the physicians in the program, providing them updates on these patients, and taking instructions when a situation arises in which they need guidance. This means fewer emergency calls for elderly people who need medical care but who have a difficult time getting out to access it, she said.

The answer to the current crisis is likely, at least in part, to come from the profession itself, in the form of “outside-the box” ideas, Dr. Schneider said. When something survives, she said, it is usually because the people involved in it say, ‘OK, how can we make this work?’”

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