When legislators envisioned the ACA, they pictured moving toward an ideal health care system, one where unnecessary ER visits would be eliminated, and where everyone was insured and had access to the care they needed. Policymakers involved in health reform know that treating non-emergencies at ERs is extremely wasteful. A study from 2009 showed that ER visits mostly consisted of Medicaid and uninsured patients—namely, people who often had difficulty accessing primary medical care. Providing better access to care for these groups so that they no longer clogged the ER was one important goal of the ACA.
While some states are working hard to improve access to primary care through the opening of the insurance exchanges, the health care system is still evolving, and market forces still can lead to the development of more costly forms of treatment. One form that recently has seen explosive growth is freestanding ERs.
The operation of free-standing ERs varies—some are run by hospital chains, while others are owned by ER doctors. Although the freestanding ERs initially started as a way to treat patients in rural areas where access to emergency departments means traveling great distances, freestanding ERs now have taken on a slightly less altruistic form as profit centers. For example, in Texas, some freestanding ERs target privately insured patients, providing them ER-level care for non-emergencies.
As a business model, these freestanding ERs seem like a boon for whoever owns them. One article cites that ER reimbursement for a sprained ankle can be $700, three or four times what it would cost at an urgent care or primary care clinic. Part of the reason freestanding ERs are so lucrative is that they charge insurers with the prices of a normal ER, including the facility fee that most hospital ERs charge to make up for the cost of being open 24-hours-a-day, among other things. With such profit margins, it isn’t hard to see why these freestanding ER’s are so popular, even in areas such as Houston, where presumably there is plenty of urgent and primary care available to users. Strategic locations in affluent neighborhoods seem to be the name of the game for freestanding ERs, as hospital systems, doctors, and other owners compete to treat wealthy, privately insured patients.
When one looks at state regulation in the United States concerning freestanding clinics, there doesn’t seem to be many barriers. There is the conventional EMTALA rule, requiring stabilizing whoever seeks care at an ER, regardless of ability to pay. There are more specific rules, such as the requirement of having an agreement with a hospital for inpatient services. As more and more hospitals, physicians, and other entities seek to open freestanding ERs, it will be important to monitor this seemingly easy entry to the ER market and whether more restrictions need to be placed to limit the amount of ERs within a single area.
The ACA does not penalize the misuse of the ER. As others have argued, the prudent layperson standard, whereby an insurer has to pay for coverage based on the symptoms and not the final diagnosis, requires that insurers will have to cover ER visits, even if they aren’t necessary. If a prudent layperson would see an individual’s situation as an emergency, then the insurer has to pay. The scenario often presented is one of an individual who eats too much pepperoni and is getting chest pains. If he shows up to the emergency room, the insurer will have to pay, regardless if the final diagnosis was just heartburn. The ACA doesn’t address this standard in any way, so there is a potential for all the recently insured individuals to use freestanding ERs for non-threatening situations and still get it covered.
Business models don’t succeed unless there is a demand for their product. If freestanding ERs are profiting and booming, they are answering a demand for better care (though, in this case, “better” seems to mean simply more convenient). What the rise of free-standing ERs actually points to, however, are more pressing problems nationwide: people’s dissatisfaction with the care they receive at urgent care and primary care facilities, and the need for more education about when an ER visit is necessary.
The former, I think, is a more difficult issue to address in an era of primary care physician shortages and a flood of more people needing care on the horizon. The only way to truly address this is to have a parallel push for more physicians training as primary care physicians as we insure more people. People using freestanding ERs as urgent care centers may perceive the facilities available as inadequate or just burdened with too many people. By decreasing wait times and increasing the availability of urgent and primary care physicians, we can provide more timely service to patients.
The problem about patient education is inevitably an issue that providers will need to solve by forming networks and more integrated systems of care. For example, New York Presbyterian has been using a population-based health care model to decrease ER visits, a model that partners with community organizations to address the medical needs of the Washington Heights area. During the six months of the Regional Health Collaborative’s operation, ER visits decreased by 9 percent. In creating an integrated network with community-based resources, which included the community health workers to do home visits to reinforce what primary care physicians were teaching the patients, they managed to have positive results in a short amount of time. Although the population was an impoverished one (not a wealthy one like with some freestanding ERs), such comprehensive care might be one way to limit the misuse of ERs.
Providing access to quality health care for all Americans—at a cost that is affordable to everyone—is what the ACA is all about. The recent rise of freestanding ERs indicates that, at the moment, the system is failing to achieve those goals. Unless health care policymakers and insurers alike work together to address ER misuse this inefficient model of care will continue to thrive.
Tags: health care, medicare, labor, medicaid
The Troubling Rise of Freestanding ERs
When legislators envisioned the ACA, they pictured moving toward an ideal health care system, one where unnecessary ER visits would be eliminated, and where everyone was insured and had access to the care they needed. Policymakers involved in health reform know that treating non-emergencies at ERs is extremely wasteful. A study from 2009 showed that ER visits mostly consisted of Medicaid and uninsured patients—namely, people who often had difficulty accessing primary medical care. Providing better access to care for these groups so that they no longer clogged the ER was one important goal of the ACA.
While some states are working hard to improve access to primary care through the opening of the insurance exchanges, the health care system is still evolving, and market forces still can lead to the development of more costly forms of treatment. One form that recently has seen explosive growth is freestanding ERs.
The operation of free-standing ERs varies—some are run by hospital chains, while others are owned by ER doctors. Although the freestanding ERs initially started as a way to treat patients in rural areas where access to emergency departments means traveling great distances, freestanding ERs now have taken on a slightly less altruistic form as profit centers. For example, in Texas, some freestanding ERs target privately insured patients, providing them ER-level care for non-emergencies.
As a business model, these freestanding ERs seem like a boon for whoever owns them. One article cites that ER reimbursement for a sprained ankle can be $700, three or four times what it would cost at an urgent care or primary care clinic. Part of the reason freestanding ERs are so lucrative is that they charge insurers with the prices of a normal ER, including the facility fee that most hospital ERs charge to make up for the cost of being open 24-hours-a-day, among other things. With such profit margins, it isn’t hard to see why these freestanding ER’s are so popular, even in areas such as Houston, where presumably there is plenty of urgent and primary care available to users. Strategic locations in affluent neighborhoods seem to be the name of the game for freestanding ERs, as hospital systems, doctors, and other owners compete to treat wealthy, privately insured patients.
When one looks at state regulation in the United States concerning freestanding clinics, there doesn’t seem to be many barriers. There is the conventional EMTALA rule, requiring stabilizing whoever seeks care at an ER, regardless of ability to pay. There are more specific rules, such as the requirement of having an agreement with a hospital for inpatient services. As more and more hospitals, physicians, and other entities seek to open freestanding ERs, it will be important to monitor this seemingly easy entry to the ER market and whether more restrictions need to be placed to limit the amount of ERs within a single area.
The ACA does not penalize the misuse of the ER. As others have argued, the prudent layperson standard, whereby an insurer has to pay for coverage based on the symptoms and not the final diagnosis, requires that insurers will have to cover ER visits, even if they aren’t necessary. If a prudent layperson would see an individual’s situation as an emergency, then the insurer has to pay. The scenario often presented is one of an individual who eats too much pepperoni and is getting chest pains. If he shows up to the emergency room, the insurer will have to pay, regardless if the final diagnosis was just heartburn. The ACA doesn’t address this standard in any way, so there is a potential for all the recently insured individuals to use freestanding ERs for non-threatening situations and still get it covered.
Business models don’t succeed unless there is a demand for their product. If freestanding ERs are profiting and booming, they are answering a demand for better care (though, in this case, “better” seems to mean simply more convenient). What the rise of free-standing ERs actually points to, however, are more pressing problems nationwide: people’s dissatisfaction with the care they receive at urgent care and primary care facilities, and the need for more education about when an ER visit is necessary.
The former, I think, is a more difficult issue to address in an era of primary care physician shortages and a flood of more people needing care on the horizon. The only way to truly address this is to have a parallel push for more physicians training as primary care physicians as we insure more people. People using freestanding ERs as urgent care centers may perceive the facilities available as inadequate or just burdened with too many people. By decreasing wait times and increasing the availability of urgent and primary care physicians, we can provide more timely service to patients.
The problem about patient education is inevitably an issue that providers will need to solve by forming networks and more integrated systems of care. For example, New York Presbyterian has been using a population-based health care model to decrease ER visits, a model that partners with community organizations to address the medical needs of the Washington Heights area. During the six months of the Regional Health Collaborative’s operation, ER visits decreased by 9 percent. In creating an integrated network with community-based resources, which included the community health workers to do home visits to reinforce what primary care physicians were teaching the patients, they managed to have positive results in a short amount of time. Although the population was an impoverished one (not a wealthy one like with some freestanding ERs), such comprehensive care might be one way to limit the misuse of ERs.
Providing access to quality health care for all Americans—at a cost that is affordable to everyone—is what the ACA is all about. The recent rise of freestanding ERs indicates that, at the moment, the system is failing to achieve those goals. Unless health care policymakers and insurers alike work together to address ER misuse this inefficient model of care will continue to thrive.
Tags: health care, medicare, labor, medicaid