Greg Roach's Berkshires Blog
Friday, September 25, 2009
  How Screwed Up is This?
An employee of a local company comes into direct contact with potentially hazardous bodily fluids. His employer sends him to go get screened by a doctor under the employer's worker's comp policy.

The employee is one of the few Massachusetts residents who have fallen through the health insurance cracks, so he has no declared primary care physician. After calling every private physicians office in North County to try an be seen, the employee is told that no one will see him because he does not have a primary care doc in that practice - Nevermind the fact that Worker's Comp will cover the visit.

Instead, he is instructed by at least two offices that he should just go to the Emergency Room even though this is obviously not an emergency situation.

Cost of a 20 minute physician's office visit $90.

Cost of a 20 minute emergency room visit $500+.

I don't think it's all that screwed up. The actual marginal cost of seeing someone in the emergency room is about the same as that of seeing a primary care position. The emergency room's billing is higher because of its higher fixed costs and because of the higher cost-shifting. (More people without insurance or money go to the emergency room, which by law has to taken them, and the people with insurance or money have to pay for them.) So you pay more for the ER, even though the total marginal cost of an ER visit is about the same as for your regular doctor. (Actual cost is a reflection of how many doctors and other people spend time working on you.)

As far as cost-shifting is concerned, it amounts to about $40 billion a year for the uninsured, and $70 billion for the people "insured" by government programs (Medicare and Medicaid), which arbitrarily underpay for services.

It is not at all clear to me why we should all be treated by the government like Medicare patients, even though that system is driving us broke despite shafting the care providers and making gerontology a money-losing specialty.
The fixed costs in the E-room are higher which causes the cost for this claim to the worker's comp insurance company considerably higher, which is passed to the customer.

The resources of an Emergency Room are expensive and should be reserved for those who need them from both a cost and efficiency aspect.
I agree, Greg: ER's have to be staffed 24/7/365. It simply IS more expensive, regardless of the uninsured.

Here is an example: Compare the cost of an Emergency Veterinary Clinic to a regular one. The Emergency clinic is roughly 3-5 times more expensive for the exact same services. This has absolutely nothing to do with funding uninsured clients, because, quite frankly, if you don't have money, they won't (and don't have to) see you.

It is more expensive simply due to it's nature. Do you really think that a Vet working the 11pm-6am shift gets paid the same as the 9-5er? No way. And it has to be staffed 24/7/365 regardless of how many patients there are... and the cost is past on to patients. Simple math.
My point is that precisely to the extent that "fixed costs in the E-room are higher" it is NOT the case that "resources of an Emergency Room are expensive and should be reserved for those who need them from both a cost and efficiency aspect."

By definition, to the extent that the higher costs are "fixed," every additional person who goes to the ER, and gets charged that higher ER rate, is, by taking on a share of those fixed costs, saving a little bit of money for everyone else who goes to the ER.

If only true emergency cases went to the ER, things would be worse because the ER would have fewer patients on which to spread those fixed costs. The costs would have to be covered by a combination of some or all of the following:

1) The ER would charge its remaining patients even more than it does today, and the ER doctors would spend more time fiddling their thumbs (i.e., higher prices and wasted medical resources).
2) The ERs would have to pay their doctors much less (unlikely) or be in much greater financial difficulty than they are today (i.e., probable closings of ERs, for worse and slower emergency care for many people).
3) If, to avoid the first 2, the ERs cut staff, then the ERs, having reduced surplus capacity and no ability to triage out people not in need of emergency care when the ER is crowded, would more frequently have to triage out serious cases (i.e., more frequently give up on patients who will die but might have been saved).

So those who go to the ER unnecessarily -- provided that they have money or insurance -- while they might be screwing themselves or their insurers out of money, are actually benefiting the rest of the system, including the real emergency patients. They provide money in return for care that is given to them when the ER is not too busy, while they can get shunted to a line when there are real emergencies. In real terms, they are a benefit to the medical system, despite the accounting which on first glance sees them as an excessive cost.
Greg, I left a long, rambling comment here a few days ago. Perhaps it got eaten, perhaps I clicked off before it approved my spam bot.

The gist of it was this: we face a profound and deadly serious shortage of primary care physicians. It's true across the nation, it's even more true in Mass, and it's especially, worrisomely true in rural Mass.

Having worked in the health system, I can tell you that practices are recruiting new docs with everything they have, but there simply aren't enough primary care physicians anywhere to fill the vacancies, and our local demographics make it even harder. Graduating MDs leave medical school with hundreds of thousands of dollars in debt. They can earn 3x as much money, with better hours, becoming, say, a radiologist. The incentives that would encourage them to go to work as an FP or internist (like loan forgiveness, better reimbursement) simply aren't there.

In a decade, the # of med school graduates choosing primary care decreased by 60%. During that same time, the earnings of primary care physicians actually decreased. Meanwhile, our population ages, and chronic conditions increase.

I seriously think that the entire model of primary care could be on the verge of complete collapse.

The solution that local practices have taken have been to hire midlevels (nurse practitioners, physician assistants). I'd be curious if your friend was offered that opportunity, actually. They work under the direction of MDs, and have medical training. It's not ideal - the truth is, most of us would prefer to see a doctor. But I'll say that I've had good experiences with the midlevels, and can always get in to see them fairly quickly.

The whole system is completely nuts, though - our health system has proven very good at rewarding procedures, and very, very bad at preventing them.

Hey, look! I managed to write another long, rambling comment! Surprise!
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