Studies have repeatedly shown that receiving any service or medical treatment in an acute hospital setting, specifically emergency rooms (ERs), is vastly more expensive than any other healthcare setting. In fact, the cost of the same service provided in an urgent care center is 50-75% cheaper than that service at an ER.
Why is this? If both settings are providing the same care to the same patient, shouldn't the cost be similar?
Let's explore the various factors that cause services to be several times more expensive in a hospital than an outpatient clinic or urgent care facility. Once we dig into the contributing factors of the high cost, we will do a deep dive into the various impacts this has on patients, insurers, medical providers, the system, and the overall US economy.First, let's look at a comparison of the average cost associated with routine visits for common illnesses provided in two different settings.
Emergency Room Vs. Urgent Care
Condition
|
Emergency Room Cost
|
Urgent Care Cost
|
Allergies
|
$345
|
$97
|
Acute Bronchitis
|
$595
|
$127
|
Earache
|
$400
|
$110
|
Sore Throat
|
$525
|
$94
|
Pink Eye
|
$370
|
$102
|
Sinusitis
|
$617
|
$112
|
Strep Throat
|
$531
|
$111
|
Upper Respiratory Infection
|
$486
|
$111
|
Urinary Tract Infection
|
$665
|
$112
|
Should I go to the ER or Urgent Care?
Non-Urgent Conditions - fever, fly symptoms, allergic reactions, minor cuts, animal bites, broken bones - urgent care centers are far superior in terms of time and cost.Extreme Medical Conditions - stroke, heart attack, burns, electrical shock - hospital have the resources, services, and treatments available making that the better choice.
We know what we should do, but what ARE we doing?
According to the CDC, American's made 136.1 million visits in 2012 to an emergency room. Patients that originate in the ER account for approximately 43% of all hospital admissions. Crazy, huh?Cool, but why are people choosing the ER?
Well, it's not always a choice. For many Americans, often those who are under or uninsured, seeking medical treatment outside of the ER is both difficult and often times cost prohibitive.Federal law requires hospital Emergency Rooms to provide care to all patients, regardless of ability to pay. Since ERs don't have bouncers at the door checking insurance cards, uninsured, and underinsured patients utilize ERs are their primary care provider. In contrast, Urgent Care facilities require payment either upfront or through insurance at the time of the visit.
To offset the impact of serving nonpaying patients, ERs charge higher rates to everyone else. Spreading this financial burden across all patients is one of the only ways for ERs to being financial stable and keep their doors open. However, this also impacts health insurance premiums who have to charge higher premiums in order to cover the higher cost of an ER visit.
If we were able to leverage primary providers or preventative care strategies to shift the avoidable and non-urgent medical problems out of the ER setting we could save an estimated $18 billion in annual healthcare costs and insurance premiums.
It's a complicated challenge, but I personally hold out hope that there is an answer and that strategic and cooperating healthcare organizations can impact this significantly. The numbers are debatable, but there is a consistent theme that close to half of all ER visits could be treated in an Urgent Care setting including the top 3 reasons for ER visits: Sprains and Strains (~6 mil visits), Upper Respiratory Infections (5.9 mil visits), and superficial cuts (5.8 mil visits)
First, let's understand what Urgent Care Centers are. Basically, they are a bridge between primary care providers and the ER. They don't require an appointment and are usually open 7 days a week and open late in the evening. They can adequately treat almost all services offered in traditional Dr. offices and emergency room.
There are three exceptions:
+ They fall short of Primary Care Providers in a traditional setting in terms of keeping medical histories.
+ They lack the sophisticated equipment and staff expertise found in hospital emergency rooms.
+ Urgent Care facilities require payment (either up front or through insurance) at the time of visit
To offset the impact of serving nonpaying patients, ERs charge higher rates to everyone else. Spreading this financial burden across all patients is one of the only ways for ERs to being financial stable and keep their doors open. However, this also impacts health insurance premiums who have to charge higher premiums in order to cover the higher cost of an ER visit.
If we were able to leverage primary providers or preventative care strategies to shift the avoidable and non-urgent medical problems out of the ER setting we could save an estimated $18 billion in annual healthcare costs and insurance premiums.
You said $18 Billion annually? Then why don't we make the shift?
It's a complicated challenge, but I personally hold out hope that there is an answer and that strategic and cooperating healthcare organizations can impact this significantly. The numbers are debatable, but there is a consistent theme that close to half of all ER visits could be treated in an Urgent Care setting including the top 3 reasons for ER visits: Sprains and Strains (~6 mil visits), Upper Respiratory Infections (5.9 mil visits), and superficial cuts (5.8 mil visits)
First, let's understand what Urgent Care Centers are. Basically, they are a bridge between primary care providers and the ER. They don't require an appointment and are usually open 7 days a week and open late in the evening. They can adequately treat almost all services offered in traditional Dr. offices and emergency room.
There are three exceptions:
+ They fall short of Primary Care Providers in a traditional setting in terms of keeping medical histories.
+ They lack the sophisticated equipment and staff expertise found in hospital emergency rooms.
+ Urgent Care facilities require payment (either up front or through insurance) at the time of visit
But shouldn't the increase in the insured population result in cheaper healthcare for all?
Not exactly.
By 2017, nearly 23 million American's were enrolled in ACA for their health coverage. Of those 23 million Americans that were enrolled, 85% were receiving federal financial assistance to pay for their healthcare coverage. Though the ACA resulted in about 20 million American's that were uninsured received health coverage the reliance on ERs continues to rise.
What are the impacts on patients?
1. Longer wait times in the ER due to patients being seen in order based on the severity of their medical issue while Urgent Care is a first come, first served process.2. Insurance companies can deny coverage for an ER visit that they deem unnecessary, or non-urgent. They use the Prudent Layperson Standard to gauge the necessity of the ER visit.
3. Denials lead to the Patient being responsible for the whole bill. The number 1 cause of bankruptcy in America is related to health care debt.
What are the impacts on the hospital?
1. Patient satisfaction decreases due to waiting times in the ER.2. ERs don't end up getting paid. Either by insurances denying payment to unnecessary, or non-urgent visits or patients unable to pay for their bill. This causes the hospital to write off much of that cost and recoup it by raising the cost of their services.
3. ERs aren't able to focus on treating actual medical emergencies due to heavy non-urgent inflow.
What are the impacts on the Economy?
1. Medicaid population's heavy utilization of ERs for non-urgent services causes strain on the programs ability to cover more American's or provide higher reimbursement rates for health care providers.2. American's are spending more on healthcare which decreases their ability to have a positive impact on the economy through participating in commerce.
3. Acquisitions and mergers of hospitals and health systems are becoming a necessity for community and non-profit hospitals as they navigate increasing costs, and lower reimbursement rates.
Any ideas on how we can improve?
Urgent Care facilities are a relatively new business. In the 1990's they were created to move non-urgent and primary care services out of hospitals. However, most American's still struggle with understanding the services offered in Urgent Care facilities, and judging the urgency and severity of their medical issue resulting in ER visits.
Educating the public on the correct healthcare setting to utilize based on the medical complaint is a critical first step. But it's not enough. Processes will need to be implemented to increase the frequency of patients choosing or being routed to the correct avenue to acquire healthcare services and treatments.
Maybe there is an opportunity to solve this issue with intelligent software that can be paired with health data collected through smart devices to increase the ability to quickly and accurately evaluate a medical issue and give the patient suggestions on the best avenue to receive the most cost-effective and efficient care.
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