Value-based Emergency Medicine
How can Emergency Medicine be better integrated into value-based care?
The emergency department (ED) is the last place any patient wants to be. Patients end up in the ED because of an acute exacerbation that can’t wait for their next PCP visit, because they have nowhere else to turn, or because it’s simply the only provider they have. If you haven’t visited the ED yourself, you likely know a friend or family member who has racked up an outrageously expensive bill for even the shortest stay or most inconsequential treatment there. According to the Healthcare Cost Institute, the average cost for an ED visit in 2020 was $2,096 in 2018 (up 24% over the past 4 years).
From the health systems perspective, insurers and health systems alike take great strides to disincentivize ED utilization - to the point that some insurers have begun denying coverage of “non-emergency care”. This is troubling for a number of reasons but I believe this only further exacerbates challenges for our underinsured patient populations who already struggle with healthcare access.
More broadly, almost all the alternative payment models aim to reduce ED utilization as a way of driving down costs and reduce hospital readmissions. EDs are commonly cited as a loss leader for their health systems and are financially at odds with the value-based care models attempting to make our healthcare system more cost-effective.
Speaking personally as an aspiring emergency medicine physician and a value-based care enthusiast, I wanted to explore how we could create a more value-oriented environment in which I hope to practice clinically myself.
24-hour and Always Open Mandate of EDs
There are a few unique attributes of EDs when compared to other aspects of healthcare make it challenging for EDs to be adopted in alternative payment models. Because EDs have to be open and staffed to receive patients around the clock, they cannot benefit from the more efficient shift scheduling or staffing optimizations of outpatient clinics. Under EMTALA, EDs are also required to provide services to any patient regardless of their ability to pay, so they have no ability to optimize payer case mix to maintain financial viability.
For a lot of these reasons, EDs often become the cost centers to their institutions because of the delicate balance around case mix for maintaining financial viability (lower acuity/commercial patients subsidize higher acuity patients that are underinsured). This fragile balancing act and around-the-clock staffing model, ostracizes EDs from many value-based models in large part because EDs can’t stratify risk or define a patient population like other providers can.
Varying Facilities Fee
There’s a large variation in facility fees that emergency departments charge that vary from hospital to hospital. Over the years, studies have found that these are generally increasing across the board.
The HCCI data shows that prices are rising dramatically and that, increasingly, hospitals have gravitated to using the most expensive billing codes — the level 4 and 5 charges, typically reserved for the most complex visits. The rising price of emergency room facility fees coupled with growing usage of the most expensive codes mean it’s significantly more expensive to go to an emergency room now than it was six years ago.
This seems to be due to up-coding of more complex procedures done in the ED, but it’s not clear whether there are actually patients with higher complexity are coming to the ED
Surprise Billing due to Locum EM services
In-network hospitals can employ out-of-network locum providers working in the EM which ultimately causes this phenomenon called “surprise billing” where patients receive a hefty out-of-network fee from seeing a provider that they never could have known was actually out of network.
Inspiration and Learnings from Alternative Models
Acute Unscheduled Care Model
This ACEP-endorsed alternative payment model aims to align incentives by creating an episode of care where emergency providers can take financial risk for qualifying episodes of acute unscheduled care. Built on top of traditional fee-for-service, this allows emergency physicians the ability to share in cost-savings derived from safe and shared discharge decision-making. As an example, imagine a patient presenting with abdominal pain. If after workup, the patient was deemed safe to discharge to home, the AUCM model would define a 30-day window post-discharge that rewards emergency providers for better coordinating post-discharge care.
A conservative 3% decrease in admission rates for these conditions could reduce annual Medicare spending by $314 million. Over time, a national 8% decrease in admission rates for just the four initial high-volume ED conditions could save Medicare over $840 million annually. Acute Unscheduled Care Model (AUCM)
Kaiser Acute Care Model
There’s a lot to like about Kaiser’s model as an integrated payer-provider. Looking specifically at how they are able to triage and manage acute care, one of the key pillars of their strategy revolves around KP OnCall, which has successfully routed over 40% care decisions to home management or next-day outpatient appointments:
One key KP strategy is effective ‘‘demand management,’’ whereby KP members are directed to the most appropriate clinical setting through telephone access to nurses 24 hours a day. Members are encouraged to use the advice line for clinical questions and to schedule appointments prior to coming to the ED. This allows many complaints to be safely managed at home, in lower intensity ‘‘urgent care’’ settings, or through next-day appointments. What ACOs can Learn from Kaiser Permanente California’s Acute Care Strategy
Kaiser emergency physicians also admit disproportionately less than other health systems because of their ability to rely on a specialized care management team who follow-up post-discharge.
Lower ED admission rates are possible in a compensation system that encourages ED providers to provide more intensive services before making a decision to admit, including use of observation units, advanced diagnostic testing, specialty consultations, and arrangement of follow-up care. This strategy is supported by the health plan, providers, and the hospital system because of the shared belief that it helps control population health costs without negatively impacting outcomes. What ACOs can Learn from Kaiser Permanente California’s Acute Care Strategy
Idea: Acute Care Transitions as a Service
From my time at PatientPing working closely with case managers and care coordinators, I have a deep appreciation for the important role they play in post-discharge care. To me, this is a core competency that few health systems, especially emergency departments, have in-house and I wonder what it would look like to build a world-class case management team (similar to Kaiser’s Transitions of Care team) specifically for emergency department post-discharge use cases.
This group would have to negotiate value-based contracts with regional payers and partnerships with local health systems for any scheduled primary care/outpatient follow-up. But the heavy lifting and aligning of incentives would allow emergency physicians in a supported region to have the same peace of mind in follow-up management of discharged patients as a Kaiser ED.
Imagine a workflow where upon determination that a patient can be safely discharged, an EM physician could consult an on call ACTaaS care manager to begin scheduling a virtual and potentially an at-home visit for acute exacerbations of abdominal pain, syncope, and chest pain. The virtual care manager would have immediate visibility into the system the physician is working in to facilitate medications prescribed upon discharge, in-network providers for any necessary follow-up outpatient encounters, and/or telemedicine or at-home vendors (e.g., Dispatch Health, Ready Responders) that can provide home visits for any next-day follow-up etc...
Such a venture could be sponsored by Medicare payment waivers like AUCM/ACEP proposes, but we could also consider the creation of this entity as a separate venture that supports health systems and payers.
Idea: Care Routing as a Service
Specifically for payers, I wonder if what a productized version of Kaiser’s “OnCall” service might look like. Some technology-forward providers like Oscar, already have a version of this virtual urgent call product, but many payers do not. Cost savings would be derived from appropriately recommending at-home management, recommending scheduled next-day appointments at an in-network provider in partnership with a payer’s provider network. Over time, usage from this service would allow payers and participating providers to reserve enough “surge” capacity for next-day appointments.
You could take this idea one step further and aggregate a network of telemedicine, at-home providers, or urgent care centers that could substantially increase capacity for payers that lack this infrastructure.
Ultimately, behavior change would be at the core of this business to encourage patients to think of this service before calling 911. Packaging and branding this as a free benefit in a plan as Oscar has done, could go a long way in driving adoption.
Big thanks to Dr. Jesse Pines, one of the authors of the AUCM model and analysis quoted above on Kaiser’s Acute Care Model for sharing his wisdom and perspective in writing this thought piece. Thanks as well to Dr. Toff Peabody, Nick Stark for letting me bounce other ideas and Dr. Brendan Carr for inspiring the very genesis of this piece. Special shout-out to Alice Lu and Neil Gandhi for their thoughtful edits and feedback on early drafts.