Optimal utilization of resources is an essential issue for all of medicine. Emergency medicine is uniquely positioned to identify and address issues of value and efficiency in the application of resources. This chapter describes the
Significance of ED Resource Utilization
Healthcare costs in the United States have been growing faster than other sectors of the economy for many years. In 1970, total healthcare costs were estimated to be $75 billion and represented 7.2% of gross domestic product (GDP). In 2011, healthcare costs were estimated at more than $2.7 trillion (a multiple of 36) and these costs comprised 17.9% of GDP.1 This persistent increase in US healthcare costs is universally considered to be unsustainable.
The percentage of healthcare costs which can be directly attributed to the ED is small but still significant. These costs have been variably estimated at 2% to 4% of total healthcare expenditures.2,3 However, the unique position of the ED at the interface of inpatient and outpatient care allows it to have a much greater impact on total healthcare expenditures. The ED is the source of close to 50% of hospital admissions4 and hospital-based care currently comprises 30% of all healthcares expenditures.3 Opportunities also exist to impact healthcare costs of patients discharged from the ED. Simply put, the care decisions made in the ED can significantly affect the “trajectory” of costs long after the patient leaves the department.
A determined effort is ongoing to transform the healthcare delivery system into one that expands insurance coverage, increases quality, and reduces cost. The Patient Protection and Affordable Care Act (PPACA) signed into law on March 23, 2010, was designed specifically to address these 3 aims. It contains a variety of powerful incentives that will continue to shape ED resource utilization in coming years.
Payment Model Reform and ED Resource Utilization
The PPACA seeks to strengthen the incentives to provide value-oriented and cost-conscious care. It accomplishes these initiatives through alteration of the financial incentives that drive utilization. These changes include the introduction of “pay-for-performance” principles and the transition from the fee-for-service payment model to global payment and outcome models. The “pay-for-performance” programs contained within PPACA include the
- Value-based purchasing program
- Hospital readmissions reduction program
- Hospital-acquired condition program
Value-Based Purchasing Program
This program scores each hospital on its performance on various quality measures. A “total performance score” is calculated and a hospital can either gain or lose money depending on how it performs in relation to other hospitals. The amount of money at risk for hospitals in fiscal year 2012 was 1% of their Medicare reimbursement, although this increases to 2% in fiscal year 2017.
The quality measures included in this measure are updated each year. Of note, there are several quality measures identified that are determined at least in part by ED utilization patterns. These ED measures are listed in Box 71-1. Although none of these measures are currently being used to determine a hospital's “total performance score,” they are posted publicly and receive much attention by hospital and ED administrators. Also of note, 20% of a hospital's “total performance score” in fiscal year 2015 will be determined by its performance on the Medicare spending per beneficiary measure. This measure compares hospitals on the total cost of care from 3 days before a Medicare patient's hospitalization until 30 days after the patient's discharge.
Box 71-1 CMS Quality Measures Impacted by ED Utilization |Favorite Table|Download (.pdf)
Box 71-1 CMS Quality Measures Impacted by ED Utilization
- MRI lumbar spine for low back pain without antecedent conservative therapy (OP-8)
- Abdomen CT: Percentage of studies performed with and without contrast (OP-10)
- Thorax CT: Percentage of studies performed with and without contrast (OP-11)
- Simultaneous use of brain CT and sinus CT (OP-14)
- Use of brain CT in the emergency department for atraumatic headache (OP-15)a
aOP-15 suspended by CMS due to concerns regarding its validity and to allow measure refinement.
Hospital Readmission Program
It also includes incentives related to utilization. In this program, a hospital is penalized if its risk-adjusted 30-day readmission rate is high, when compared to other hospitals for Medicare patients discharged with a diagnosis of pneumonia, myocardial infarction, or congestive heart failure. Hospitals can only lose money on this measure. The at-risk reimbursement for hospitals grows over time with 1% of their Medicare reimbursement at risk in fiscal year 2013 and 3% in fiscal year 2015. While much of the focus on reducing hospital readmission has surrounded improving the transition of care to the home environment, EDs are being asked to identify potential 30-day readmission patients when they arrive in the ED and to consider alternatives to readmission whenever possible.
Hospital-Acquired Conditions Program
It defines certain medical conditions that occur once a patient is hospitalized.5 Among the list of conditions are pressure ulcers, falls with injuries, catheter-associated urinary tract infections, vascular catheter-associated infections, and poor glycemic control. Since, these conditions could reasonably have been prevented, Centers for Medicare and Medicaid Services (CMS) does not pay for hospital costs related to these and other hospital-acquired conditions (HACs). As a result, it is incumbent upon ED personnel to identify preexisting conditions. For example, a preexisting deep-pressure ulcer in a nursing home patient not identified at the time of admission and causing additional utilization of resources and a more prolonged hospital stay will not be reimbursed. To further incentivize performance on these measures, beginning in 2015, CMS will penalize those hospitals in the bottom quartile of HAC performance 1% of their total Medicare reimbursement.
Global payment models and the transition away from fee-for-service payment model are being pursued in recognition of the belief that the fee-for-service model is largely responsible for the expense and fragmentation within healthcare. Two types of global payment models legislated by PPACA are “accountable care organizations” and “bundled payments.”
- Accountable care organizations (ACOs) are networks of providers and facilities that are financially accountable for all the healthcare costs incurred by a defined population of patients over a period of time. If an ACO is successful in reducing the costs associated with this population of patients (while still meeting quality standards), then the ACO is eligible to share in these savings.
- A bundled care payment refers to the provision of a single payment for all of the care and providers that are involved in an episode of care of an individual patient (eg, total knee replacement).
The full implications of global payment models for emergency medicine patients and practice are unknown. While the pay-for-performance initiatives have caused EDs to focus on the utilization measures included within these programs, the precise means by which EDs will interface with ACOs and bundled payments is less clear.6