How ER Over-utilization Hurts Healthcare

You’re in pain, you need to see someone, but where do you go? Some people call their Primary Care Physician, some head to the nearest Urgent Care Center, but the most popular choice is the Emergency Room (ER). What most people don’t realize, however, is that where you choose to get your healthcare has a huge effect on the rest of your community and the large bill that follows. As a consultant for Salient Healthcare, one of the biggest issues I discuss with ACO program directors and hospital administrators is the ER utilization rates.

According to data from the Centers for Disease Control and Prevention, in 2016 there were 145.6 million visits to the Emergency Department in 2016. Of those, only 8.7% resulted in the patient being admitted to the hospital. That means over 91% of patients who show up at the ER could be sent home the same day! Not to mention total Medicare expenditures for ER visits in 2016 exceeded nearly $680 Billion!

Additionally, the University of Maryland School of Medicine discovered that between 1996 and 2010 the use of the ER for non-emergencies increased about 44%, and nearly half of Americans who need medical attention were choosing the ER as their place of service. Reasons patients choose to visit the ER included lack of insurance, convenience, and their doctor’s office wasn’t open after hours. The problem is that this overcrowds the ER, and it also creates a cascade of problems.

Problem 1: ER Wait Times – Emergency Rooms are not set up to be “first come first served.” Instead, they triage each patient and see them based on the severity of affliction. You may have waited an hour already because you have a 103-degree fever, but if you’re about to be seen when someone comes in suffering from a heart attack, they’ll become the higher priority. Urgent Care wait times range from 30-60 minutes. ER wait times can exceed 2 hours depending on patient traffic.

Problem 2: Cost – Let’s use the person with the 103-degree fever as an example. If you have insurance, urgent care costs can range between $70-125. If you look at your health insurance card it may have a little “UC” with a price next to it. That’s your expected copay/coinsurance depending on the level of treatment. If you don’t have that on your insurance card, you can always call the insurance company to find out what your policy states. You may have to meet your deductible, however, the negotiated rate at the urgent care center will be lower than the rate at the emergency room. That being said, your emergency room costs will always be higher. The chart below was prepared by to highlight the average ER vs. Urgent Care cost differences for nine of the most common ailments. You’ll notice that in some cases the Emergency Room costs as much as 6 times as an Urgent Care Center. It’s entirely possible that an out-of-pocket /no insurance cost to be seen at an Urgent Care is lower than that of the ER.

Problem 3: Cost Shifting – I’ll bet most people don’t realize that ER costs can shift. This affects both the individual patient and the surrounding population. How is that possible? Well, Emergency Departments legally can’t turn away patients with life threatening ailments due to a lack of insurance. How do they make up the cost? Well, they pass it on to those who do have insurance. That’s one of the main reasons for the cost difference in the chart above. If the ER thinks you have a non-life-threatening ailment, and they can’t see you due to a high influx of others with major issues, they absolutely may turn you away.

Now how does this affect population health? Well, if too many people are trying to use the ER when they shouldn’t be, then the overall costs skyrocket. It’s a compound effect. As a provider organization in value-based payments your job is to keep costs down. That means getting more people to see their PCP to get out in front of issues before they become ER situations. However, what happens if their PCP isn’t available? This is where it helps for PCPs to have relationships with local Urgent Care facilities so that their patients know where to go to get quick care during off hours. Only then, if the Urgent Care can’t help, should the patient head to the ER.

For the sake of patients knowing what type of issue is for what type of facility, here is a chart to break everything down. It’s a great tool to have available in medical practices. Patients should be aware that, as a rule of thumb, they are better off first checking with their primary care provider to verify that the practice offers same-day access when the office is open and also offer after hours care when the office is closed. Primary care providers know patients best, and they almost always can provide the most coordinated and comprehensive care.

How do you know if your patients are seeing the ER too frequently? How do you know where they’re going? Salient Healthcare Dashboards and Salient Interactive Miner provide you a way to track patient habits and assess if ER utilization is causing high spend for your ACO. See one of our demos on this here. You can even assess hospital readmissions for 30, 60, and 180 days. Assess what the problem is, and have your providers educate patients on what the best options are for them and their families. We’re all in this together making healthcare more affordable and higher quality.

Ryan Mackman

About the Author

Ryan Mackman, MBA, MHA - Business Consultant

Ryan Mackman has been an ACO business consultant team member with Salient since March 2018. In this role, he acts as a solution trainer, marketing and sales consultant, as well as Value Based Payment strategist. His skillset helps augment Salient’s efforts at the ACO and physician practice level.

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