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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

  • Importance of this issue
  • Rapidly changing incentives to address utilization
  • Strategies to optimize the utilization of emergency department (ED) resources
  • Potential pitfalls when addressing utilization

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.


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