Emergency Room Usage and Healthcare Reform

The three principal goals of healthcare reform are to provide insurance to the uninsured, limit abuses by the insurance industry, and maintain or reduce present levels of healthcare expenditure. These goals are uncomfortably jammed into a single bill due to a demand that reform be "revenue neutral", allowing opponents of reform such as Robert Samuelson to pluck out of the larger context of the bill a reform that serves one goal and whine endlessly that it is inconsistent with another. Case in point, emergency room care.

First, Samuelson complains that the uninsured don't actually use the emergency room for primary care,

A study by the Robert Wood Johnson Foundation found that the insured accounted for 83 percent of emergency-room visits, reflecting their share of the population. After Massachusetts adopted universal insurance, emergency-room use remained higher than the national average, an Urban Institute study found.

The first claim is misleading. The study at issue found,

Compared with the privately insured, ED utilization rates are almost four times as high among Medicaid/SCHIP patients and more than twice as high for patients with Medicare or no insurance. After adjustment for self-reported health status, demographics, and the capacity of local EDs and primary care providers, uninsured patients used the ED at the same rate as the privately insured, while patients with Medicaid/SCHIP or Medicare coverage continued to exhibit much higher utilization rates.

ED utilization rates were thus twice the level of the insured, even if other factors are said to account for that higher rate of utilization.

Samuelson's second point belies his implication that ED use will increase following healthcare reform. Yes, Massachusetts had higher than average rates of emergency care usage before and after its health insurance reform, but the study Samuelson references does not attribute the problem to the fact that more people obtained insurance. Its concern was the disproportionately high rate of usage by people on public insurance (Medicare and Medicaid), not those who were finally able to enroll in private insurance.

Samuelson approaches this discussion with the simplistic construct that once a patient reaches the emergency room, everything that happens afterward will be exactly the same whether or not they're insured. Let's assume for the moment that, post-reform, the uninsured will continue to utilize emergency rooms at their present rates. When somebody who is uninsured or underinsured goes to the emergency room, they may not be able to pay the bill such that the hospital is not reimbursed for part or all of the care. Whether the hospital provides the care as "charity care" or writes off the loss against its profits, the unreimbursed cost gets passed on to other patients. If most patients are insured, while it may be true that the overall cost of care remains the same, the costs can be properly allocated between patients such that the typical patient's ED bill goes down.

Also, many emergency departments are overcrowded, and many patients who require more intensive care are "boarded" in the ER due to a lack of beds in other departments. The Robert Wood Johnson study that Samuelson cites informs us,

“Patient boarding” results in overcrowding, but many hospitals fail to improve the flow of patients through the ED because they cannot gain the necessary cooperation from other hospital units. Improvements in patient flow often require disruption to current delivery patterns for elective surgeries and other profitable service lines with no clear monetary benefit in return. Although the ED may serve as a gateway to profitable admissions (e.g., cardiac surgery), it also attracts a less remunerative payer and service mix (e.g., uninsured, outpatient care). Hospitals that reduce ED overcrowding, therefore, may suffer financially if this reduction leads more profitable patients and their physicians to go elsewhere. Improving efficiency by correcting reimbursement imbalances may have the additional benefit of helping control cost growth.

In other words, if more patients in the ER are insured, hospitals can more easily take steps to reduce emergency department overcrowding because the doctors in other parts of the hospital won't undermine doctor income and potentially cause staff doctors to seek employment elsewhere, and this could potentially help control healthcare inflation. Samuelson truly missed that?

One of the problems that is identified in the studies as driving the use of emergency departments instead of primary care is a shortage of available primary care. The Massachusetts study states:

While most ED users reported a doctor’s office or private clinic as their usual source of care, ED users were more likely to rely on hospital outpatient departments, community health centers, and other public clinics than were non-ED users. Barriers to care in the community and unmet need were more common among those reporting that their most recent ED visit was for a non-emergency condition and those reporting multiple ED visits over the year.

The Robert Wood Johnson study similarly instructs policy makers that they should "Improve access to primary care, either through community providers or through delivery of primary care in the ED." Thus it's perfectly reasonable in this context to introduce the subject of primary care. But Samuelson's approach would likely worsen the situation:

Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. Obama might have attempted that by proposing health-care vouchers (limited amounts to be spent on insurance), which would force a restructuring of delivery systems to compete on quality and cost. Doctors, hospitals and drug companies would have to reorganize care.

Clear as mud? It seems reasonable to infer that Samuelson is cryptically alluding to his position that we shift from fee-for-service reimbursement of doctors to capitation:

But moving toward "capitation" - fixed annual payments per patient, adjusted for medical risk - would trigger opposition. Doctors would feel their independence threatened by dictates from the network. Patients would correctly fear that their "choice" was being restricted. Payment limits would raise the specter of important care being denied.

As I've previously noted, that is much more of an experiment than anything the Obama Administration has proposed, and includes "pretty much every concept that had the political right shrieking about a government takeover of healthcare". Further, if such a change is implemented to save costs - that is, to reduce the compensation to primary care physicians - the net effect will likely be to further reduce the availability of primary care and to increase the number of patients who rely upon the emergency room for primary care - at a time when even Samuelson knows we need to be moving in the opposite direction.

There's tension between Samuelson's advocacy for the status quo or "market-based" reforms and his advocacy for a compensation system that is better suited to a single payer plan, in which doctors are paid a salary or capitation rather than being reimbursed for each service they provide. Britain's NHS has experimented extensively with capitation - is that where Samuelson's preferred set of reforms would take us?

No, of course not. My guess is that the moment somebody proposed a set of reforms that would satisfy each and every one of Samuelson's objections he would switch from squawking about cost controls to squawking about "nationalization".