ER facility fees skyrocket faster than outpatient or overall healthcare spending
Hospital emergency room (ER) facility fees increased 89% between 2009 and 2015, which is twice as fast as outpatient care and four times as fast as overall healthcare spending, reported Vox and Health Care Cost Institute (HCCI) in a new report.
Vox and HCCI analyzed 70 million insurance bills for ER visits. The analysis focused on facility fees and not the hospital charges.
The added spending is leading to higher premiums and patient costs. “It is having a dramatic effect on what people spend in a hospital setting,” said Niall Brennan, executive director of the Health Care Cost Institute. “And as we know, that has a trickle-down effect on premiums and benefits.”
The report found that ER fees increased by more than $3 billion between 2009 and 2015 despite a 2% decrease in ER fees billed. There were only 9.4 million ER visits in 2015 compared to 10.5 million in 2009. So, payer efforts and patient education to get care at lower cost facilities are working. However, costs remain a problem.
In the past few years, payers have created policies that target reducing ER utilization and costs. Payers have moved care away from hospital ERs and to less expensive outpatient facilities or freestanding ERs. Health systems, in turn, have focused more on expanding outpatient care and major systems like HCA have invested in freestanding ERs and urgent care centers.
In one of the most controversial payer moves this year, Anthem announced a policy to not pay for “unnecessary” ER visits. The policy requires an Anthem medical director to review claims information and decide whether symptoms and diagnoses warranted the visit. The payer implemented the policy as a way to cut costs and reduce ER visits and wait times. Hospital leaders have spoken out against that policy, including Missouri healthcare executives who called the policy “unfair to policyholders, and downright dangerous for patients.”
Despite the opposition, Anthem’s policy is one that other payers are watching closely. Lea Halim, senior research consultant at Advisory Board Company, recently told Healthcare Dive that more payers will follow suit if Anthem’s policy cuts costs and reduces ER visits.
"Will Anthem get a lot of pushback from patients and employers? Will hospital lobbies succeed in getting state governments to force Anthem to roll back the policy? If Anthem does not face or successfully overcomes these types of challenges, other payers may very well follow suit," Halim said.
Another cost issue concerning ERs is surprise billing. The Center for Public Priorities released a study earlier this year that found surprise billing is a problem across the healthcare system. Also, a recent National Bureau of Economic Research study on out-of-network billing for emergency care found that patients who visited in-network hospitals for emergency care received out-of-network physician care 22% of the time.