Home Featured Post Plummeting ED Volumes Offer an Opportunity to Re-imagine Hospital Finances

Plummeting ED Volumes Offer an Opportunity to Re-imagine Hospital Finances

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Plummeting ED Volumes Offer an Opportunity to Re-imagine Hospital Finances

By Pamela J. Gallagher

In 2019, emergency departments (ED) across the U.S. saw an average of 2.1 million patients per week, according to the Centers for Disease Control and Prevention (CDC). Over the past several decades, healthcare organizations have invested large amounts of money, time, and effort to study the trend of ever-increasing numbers of high-utilizers in the ED and discover solutions to slow this growth.  Hospitals have offered care navigators, clinics for less emergent issues, and countless other alternatives, but with next to no progress.  People, it seems, just wanted to come to the ED.

In the midst of the COVID pandemic, however, the CDC reports that ED visits declined nearly 50% during the early COVID-19 pandemic. While this may be partially due to patients choosing to stay home who likely didn’t need to come to the ED in the first place, physicians are deeply concerned that those with true medical emergencies are avoiding a necessary ED visit due to fear of being infected with the virus.

This is a huge hit for hospitals’ revenue. As healthcare facilities struggle to adjust financially and operationally, I believe the healthcare industry will see major changes to the way EDs function as a part of the financial whole.

ED volumes

In my research for this article, I came across studies from as early as the 1990s about combating increasing ED volumes, especially the number of frequent visitors. But the numbers have only continued to skyrocket since that time. Despite the fact that frequent and nonfrequent ED users give similar reasons for using the ED—factors such as convenience, timely access, quality, and costs—one study found that approximately 5% of patients who use the ED are responsible for 25% of all ED visits. Another study revealed that ED volumes have increased, driven by the closure of existing EDs outpacing the increase of new EDs. The change in inpatient and observation requirements has also led to an increase in ED volumes as EDs are often the place patient status is determined and increases the volumes and length of ED visits. These researchers have also showed that primary care interventions in a patient’s medical path may reduce visits to the ED. 

In the midst of the pandemic, we have seen a sudden shift in patient behavior as ED volumes have plummeted. Patients are using other care options such as primary care physicians, telehealth, or visits to a specialist rather than the ED.  ED injury visits are down, in large part because people are staying home more and have fewer opportunities to injure themselves. There is also confusion about access to EDs, with some patients mistakenly believing that hospitals are closed to non-COVID patients.  

However, many physicians are deeply concerned that the main reason patients are staying out of the ED is a fear of contracting the virus.  This could have negative long-term consequences for patients with heart disease, stroke, or cancer.  This means hospitals will see both short- and long-term costs associated with the downturn in ED volume.

Financial considerations for the future of EDs

Will patient behaviors during the pandemic result in a permanent change?  While there has been a recent rebound in visits, the CDC noted, the volume of visits remains significantly lower than this time last year. Visits to the emergency room were down 26 percent in the last week of May, compared with figures from a year earlier.

Open to alternatives.

 A trip to the ED is a very expensive way to be treated, and I predict that patients who used alternative means such as telemedicine to get treatment during COVID will continue to do so.  The key to reaching an equilibrium in ED volumes is “virtual triage,” where patients experiencing concerning symptoms use telemedicine to speak to a provider who can help them determine if a trip to the ED is warranted.  I am curious, though, how this will impact those who use the ED as a “safety net,” as the CDC terms it, due to a lack of access to primary care and telemedicine.

Smaller EDs.

Hospitals spend tens of millions of dollars on large ED facilities to handle the historically high volumes and keep traffic moving.  But if this downward trend in ED usage is permanent, too-large facilities will cost hospitals financially.  Hospitals will need to re-allocate this space accordingly for departments seeing revenue growth, and new facilities will need to reject the status quo as they consider their real estate needs.

Rethink operations, size, cost.

EDs have long operated with a preventable misuse of resources due to the frequent use of their services by patients who could receive treatment through lower-cost alternatives. This is why so much money has been spent researching this issue.

In addition to re-imagining real estate needs, hospitals will need to take a more comprehensive look at the size and cost of their ED operations. In the long run, it will save hospitals money to adjust and appropriately staff their facility.  If EDs are no longer used by patients for minor situation care, we will see fewer cases, but more intense emergencies. Hospital executives, then, should consider not just the number of care providers needed, but the skill set necessary to address more emergent situations, as they look to right-size staffing costs.

Reducing ED volumes has been a focus of hospital executives and researchers for decades—and the pandemic has done it in a matter of weeks.  Whether the number of visits rise again after the virus has subsided or we see a more permanent change, the volume and usage trends that EDs have seen in recent months will force hospitals to rethink how their EDs operate and their financial reliance on them.

Resources:

Impact of the COVID-19 Pandemic on Emergency Department Visits — United States, January 1, 2019–May 30, 2020, Centers for Disease Control and Prevention

Reasons for Emergency Department Use: Do Frequent Users Differ?, AJMC

Doctors worry the coronavirus is keeping patients away from US hospitals as ER visits drop: ‘Heart attacks don’t stop’, CNBC

Where Are All the Patients? Addressing Covid-19 Fear to Encourage Sick Patients to Seek Emergency Care, NEJM Catalyst

E.R. Visits Drop Sharply During Pandemic, New York Times

Frequent Users of Emergency Department Services: Gaps in Knowledge and a Proposed Research Agenda, Wiley Online Library

Reducing High-Users’ Visits to the Emergency Department by a Primary Care Intervention for the Uninsured: A Retrospective Study, US National Library of Medicine National Institutes of Health

About Pamela J. Gallagher

Pamela J. Gallagher is a senior healthcare finance executive with 20 years of experience balancing the reality of finance with the delivery of excellent patient care. As a consultant she instills financial discipline, streamlines processes to maximize revenue, and reduces expenses for immediate improvements and long-term results.  She writes on healthcare, finance, and technology at gallaghersresulting.com.

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