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ED Cost of Care Greatly Underreported, Researcher Says

 |  By cclark@healthleadersmedia.com  
   May 02, 2013

A widely accepted federal report which represents emergency department care costs as only 2% of the nation's total healthcare bill is seriously flawed, according to a Brown University researcher and ED physician at Rhode Island Hospital. The true cost is in the range of 6.2% to 10%, they say.

Michael Lee, MD, assistant professor of emergency medicine, reports in the Annals of Emergency Medicine that commonly cited data from the Medical Expenditure Panel Survey or MEPS, prepared by the federal Agency for Healthcare Research and Quality, greatly underreports key components of ED care, including costs for patients who ultimately are admitted to an inpatient bed.

His analysis suggests that patients who are admitted require ED services that cost between 26% and 48% more than patients who are treated in the ED and released.

Tests and imaging for those patients are not included in the agency's survey reports. Also, care provided to patients enrolled in Medicaid who are treated in the emergency department is underreported, he wrote. The cost of providing emergency services for patients who are insured also is missed because those services are often bundled.

Additionally, the MEPS greatly underestimates the number of ED visits in U.S. hospitals, Lee says. According to the National Hospital Ambulatory Medical Care Survey (NHAMCS), there were 129.8 million ED visits in 2010, but MEPS only counts 48.9 million.

Rather than $48.3 billion spent on emergency department care that year, Lee suggests the number is more in the range of $131 billion to $136 billion, and may account for 10% of total healthcare spending when factored as costs per patient visit, he says.

"Emergency medicine represents a larger percentage of overall costs than we think," Lee says. "But the flip side of that is that there's a lot of value in emergency care and what services are provided, and we need to do a better job in quantifying and demonstrating what that is."

The article raises questions about the accuracy of the American College of Emergency Physicians' long-standing "Emergency Care: Just 2% Campaign." Asked for a comment, ACEP spokeswoman Julie Lloyd said "We feel confident in our analysis from the Just 2% campaign." The Annals of Emergency Medicine is the official publication of ACEP.

Lee contends that the low figure of 2% is frequently used as a "public relations campaign" to convey the idea that emergency care is cost-effective, and not a major contributor to healthcare costs.

Often however, the very critical life-saving strategies that take place in the emergency room, and cost money, are not counted in this equation, such as imaging for a stroke patient who is administered clot busting drugs and admitted to a telemetry unit.

It is important to understand the true costs of what is provided in the ED because of what's at stake in payment reform. "Accountable care organizations and bundled payments may disrupt how emergency care is reimbursed," he wrote. "Cuts for indigent care at Disproportionate Share Hospitals are a threat to EDs due to federal mandates to provide medical screening for all patients."

Meanwhile, the number of emergency departments is declining as the number of ED visits to hospitals is increasing.

Lee suggests that the cost estimates are based on calculations that consider emergency department services as a fixed cost, and don't take into consideration what happens when they become crowded and have to bring in more staff, or special specialty expertise.

There are also concerns that many patients who seek care on the emergency department are not experiencing true emergencies. They may be using the ED instead of an office visit to a primary care physician, which would be cheaper and more appropriate for their symptoms.

Lee says he realizes that his suggestion that ED care is a lot more expensive than people think may prompt more accusations that ED care is wasteful and unnecessary, or inefficient.

However, he says, it should make people realize that much of the time the ED is ruling out potentially harmful conditions, such as determining that the source of stomach pain in a patient who was in a motor vehicle accident is not internal bleeding.

"The total cost of care isn't what's relevant here," he says. "My sense is that trying to divert care (away from the emergency room) isn't going to save a lot of money in the aggregate. It's not always going to be clear what's a true emergency and what's not."

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