3 important steps to reform hospital-based emergency care

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Hospital-based emergency care in America is unraveling. The symptoms are everywhere — long wait times, overcrowding, patient frustrations, workforce shortages, clinician burnout and even complete closures of rural and community emergency departments.

These symptoms signal a fundamental problem: the mismatch between the demand for acute unscheduled care (strokes, heart attacks, trauma, etc.) versus the capacity and resources available to deliver it.

When emergency departments function well, patients receive timely access to high-quality clinical care. When they struggle or fail, patients lose a federally guaranteed 24/7 point of access to care, available regardless of the patient’s ability to pay.

A recent RAND study articulates the value that emergency departments provide to healthcare stakeholders. Health systems lose capacity for acute unscheduled care. Primary care physicians lose an on-demand resource for complex patients. Communities lose a hub for care coordination and a treatment center for uninsured patients. Payors lose a guaranteed network of emergency physicians. Public health and disaster response entities lose standby capacity and critical resources during emergencies.

Despite this, emergency physicians have experienced repeated reimbursement cuts, no inflation increases and often, no reimbursement at all for public health functions that benefit patients and the healthcare system. Unlike many other specialties, emergency departments cannot reduce patient care services to align with reduced resources, even to ensure their own economic sustainability. As a result, they are closing at alarming rates, especially in rural and underserved settings.

These closures have largely been regarded as isolated and unfortunate events, rather than concerning manifestations of a systemic disease. The failure to address this evolving crisis is a failure to recognize its importance. And right now, we are failing indeed.

Fortunately, this situation canbe solved and prevented in the future. We need a three-part approach using immediate actions to stabilize the system, medium-term steps to prevent further deterioration and long-term strategies to build resilience.

First, we must stabilize emergency departments by requiring payment integrity. Currently, 20 percent of emergency physicians’ services are entirely unreimbursed — by far the highest proportion of uninsured care delivered by any specialty. This represents significant value to patients and the healthcare system. It also imposes a significant burden on emergency practices and poses a risk to economic sustainability.

For clinical services that are reimbursed, the RAND study shows that both insurance companies and commercially insured patients are paying incrementally smaller portions of what is owed.

Further, insurance companies continue tactics to downcode or deny claims and delay payment for appropriate clinical services that are required by the Emergency Medical Treatment and Active Labor Act, the Prudent Layperson Standard, or both. Healthcare dollars must then be diverted from patient care to collect rightfully owed amounts, which is both frustrating and dangerous.

The first stabilizing step is clear: Enact policies requiring prompt, appropriate reimbursement for emergency care.

Second, once the system is stable, we must prevent further deterioration by modifying legislative and regulatory mechanisms that trigger additional emergency department funding cuts. Without reform, these cuts further threaten their availability and effectiveness, and the viability of our nation’s only healthcare safety net.

The Medicare Physician Fee Schedule is one stark example. According to the American Medical Association, physician pay has declined 33 percent since 2001 when adjusted for inflation. Year after year, the schedule has failed to incorporate inflation updates and has even included absolute cuts while other parts of the healthcare system received reimbursement increases.

In addition to other reforms, Congress should modernize the physician fee schedule by including appropriate inflation adjustments, prevent more absolute cuts and protect the sustainability of hospital-based emergency care, particularly in rural and underserved areas. Without reform, emergency practices will remain financially fragile and expose patients to preventable risk.

Finally, we must right-size emergency care with long-term systemic solutions. Patient populations have become older, sicker and clinically more complex. Outpatient services have not kept pace with these increasing demands, resulting in spillover to emergency departments. For example, during 2020, 30 percent of emergency department visits were for mental health issues alone, reflecting the limited availability of outpatient behavioral healthcare.

Long-term, systemic resilience requires meaningful access to primary care, behavioral health and appropriate specialties. Expanding access will reduce preventable emergency department utilization, alleviate crowding and preserve hospital-based resources for true emergencies.

Emergency departments are not an optional component of American healthcare — they are a fundamental service relied upon by the healthcare ecosystem. Well-documented, systemic problems can no longer be ignored. Today’s challenges simply cannot be allowed to recur and spread further.

Policy and reimbursement changes will determine whether this critical component of healthcare will be empowered to continue its unique contributions or crumble altogether. The latter would be unfortunate indeed.

Randy Pilgrim, MD is the enterprise chief medical officer at SCP Health.

3 important steps to reform hospital-based emergency care

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