The emergency room: Friend or foe?

October 21st, 2019 / By Steve Delaronde

Nearly one in five Americans visit an emergency room (ER) every year and one-third of them visit more than once. These proportions are the same as they were in 1997. ER prices are increasing and utilization continues despite the rise of lower cost and more convenient options, such as urgent care centers, retail clinics and telemedicine. Many of these ER visits are preventable and can be managed much more efficiently and effectively in a primary care setting. If better options exist, why do Americans make 145 million ER visits a year?

According to a study released in September 2019, Medicaid expansion actually resulted in an overall increase in “deferrable” emergency room visits for newly covered recipients compared to their pre-coverage period. Medicaid recipients experience unique challenges that may not be experienced by commercially-insured individuals including:

  • a smaller network of primary care physicians from which they can choose in their geographic region
  • limited transportation options to scheduled medical appointments
  • a greater likelihood of not having continuous insurance coverage that helps establish a relationship with a primary care physician

Emergency rooms serve a necessary function for what they were intended—medical emergencies. However, some studies suggest that as many as two-thirds of ER visits are potentially preventable and can be treated by a primary care physician. Common conditions such as upper respiratory ailments, headaches, abdominal pain and low back pain are primary care treatable conditions which are treated in the ER. Another study of insured patients with chronic conditions estimated that 30 percent of ER visits are potentially unnecessary and result in an additional cost of $8.3 billion to the industry.

The criteria used to define an avoidable or potentially preventable visit can vary, however. One study used a very conservative definition of “avoidable” visits and estimated that only 3.3 percent of ER visits are avoidable. These were defined as visits that did not result in additional services, such as lab tests, diagnostics or medications, or they represented conditions that an ER is not equipped to treat, such as mental health or dental conditions.

The challenge is determining how to incentivize patients to ensure that medical conditions are treated at the appropriate care setting. Medicaid recipients do not have cost sharing requirements which means convenience is prioritized over cost. At least one private insurer has attempted to incentivize both patients and providers to use urgent or primary care by denying payment for unnecessary ER visits. This works if a patient can distinguish between symptoms that require ER services compared to urgent or primary care, and if these settings are accessible to the patient when symptoms occur.

As the popularity of high-deductible plans grows among employers, the primary incentive for patients to avoid an ER visit becomes the $150-$3,000 price tag. Even for those patients that meet their in-network deductible, as many as 43 percent of ER visits include a surprise bill from out of network provider. These bills tend to come from a subset of hospital that use contracted physicians and intentionally stay out of health plan networks to drive profits.

There are some indications that behavior may be changing. According to an April 2019 whitepaper, between 2016 and 2017 telehealth utilization increased nationally by 53 percent compared to urgent care centers (14 percent increase), retail clinics (7 percent increase), ambulatory surgical centers (6 percent increase), and ERs (2 percent decrease). This remains a positive sign only if services obtained at each of these locations are medically necessary, cost effective and coordinated with primary care.

Steve Delaronde is director of consulting for Payer and Population Health Services at 3M Health Information Systems.