Monday, March 01, 2010

Non-urgent care in ER's is a cost problem?

It is well known that one reason our health care costs are so high is because of poor people using the emergency room as their family doctor. But is that true? I did some research and found that in 1996 dollars, the marginal cost of non-urgent emergency room visits was computed at $26. I doubt it's significantly more today, which would put it at around $38 in today's dollars. So, can we save significant amounts of money by having the poor go to free clinics for non-urgent care rather than to the emergency room? Not really.

Wait, you say. So why are emergency room bills something ridiculous like $2,000 to tell you that you have a common cold? Well, that's simple. There's all this infrastructure needed to have an emergency room. You need ER doctors and nurses, you need a waiting area, you need sufficient examination rooms to handle a nearby industrial accident or bus rollover or similar major incident. And all of that needs to be paid for. Hospitals would still have those expenses if not for the people coming in for non-critical care, they'd just be dividing it over fewer people and the ER bill for those people who came in for critical care would be stupendously higher. In short, by charging Medicaid far more than $38 for the unreimbursed care of poor people requiring non-urgent care who walk in unable to pay, hospitals are subsidizing the urgent care provided by their emergency rooms.

So... why are emergency rooms closing left and right because they're losing money? It's not because of the $38 per patient that they're losing on the non-urgent care (which they bill Medicaid for, and receive a much larger number than $38). It's because of the people ambulances are scraping off the pavement who come in with a heart attack or other life-threatening illness who have to be hospitalized. Those people are taking up beds that could be used by paying patients (most hospitals run very tight bed counts now, we have fewer hospital beds today than we had in 1973, despite the population being 1/3rd larger), use up critical surgery and ICU resources getting them stabilized to the point where they can be transferred to the local public hospital, and otherwise are a financial black hole. Kick all the non-urgent patients out of the ER and tell'em to go to the local free clinic, and you're still stuck with this financial black hole... you just have emptier emergency rooms. Which might be desirable, but it isn't going to save us any money as a nation -- indeed, it will actually *cost* us money, because free clinics aren't truly "free", they have fixed costs too just like the ER, so you're basically replicating what the ER already has. The free clinic might look cheaper to Medicaid because they get charged less than the ER charges, but insofar as overall health care spending goes, we're talking about a wash at best.

So is non-urgent patients going to the ER a problem? Well... yes. But not because of cost. It's because they're cluttering up the ER to the point where it's difficult for the ER to handle patients who do have urgent needs. Simply mandating insurance, as current health care reform proposals do, will not eliminate this problem entirely, because some patients go to the ER simply because that's the only health care option open to them during the hours they can actually go to the doctor (poor people work the hours their employer tells them to work, and get paid only if they work -- they don't get sick time to go to the doctor). Clearly some other option needs to be available other than the ER after normal working hours... but finding someone willing to pay for this doesn't seem to be happening.

-- Badtux the Healthcare Economics Penguin


  1. Remember when Dubyah was telling poor uninsured people to just go to the local emergency room if they couldn't afford a doctor?

  2. Yeah, but what would Robert Murphy say?


  3. Sara, yes, I recall that. Oddly enough, from an economic point of view it wasn't bad advice, if a bit, well, small-minded, in that an ER is an imperfect replacement for an actual family doctor. In particular, ER's suck at management of chronic illness.

    Jazz: Cue quote from Gone With The Wind ;-).

    - Badtux the Snarky Economics Penguin

  4. Well, I think that it...

    Wait, what?

    26 1996 dollars is 38 2010 dollars? Christ on sale!

    Good thing wages keep up with that.

  5. I have insurance. I didn't want to use the ER when I had a problem out of town. I was told that's what I had to do. It ended up costing three times what the initial office visit cost. Proper instructions, and honest communication could have prevented the ER visit.


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