Emergency Medicine and Payment Reform – Becoming Part of the Solution PART III

Health care is bankrupting this country. The truth is, emergency physicians are as much a part of the problem as any other provider, health plan, or patient in this country. Many emergency physicians over-order scans and tests, practice defensive medicine, over-utilize consultants, don’t pay much attention to the cost of drugs and treatments we order or prescribe, and generally spend too much money for too little benefit. I could argue convincingly that we are more effective and efficient than most physicians, especially in light of the difficulties of practice in the ED; but our challenge is not just to dispel the mistaken assumption that ED services do not meet the value proposition. We must simultaneously participate in developing solutions to the cost-effective care conundrum, or the payers and politicians will focus on ways to work around us, or through us.

Policy makers have selected payment reform as the primary path to cost-effective care, and fee for service as the principle foil responsible for our health care financing predicament. I could argue that tacking ‘for profit’ in front of ‘health plans’ is equally responsible, but this is, after all, America. Health reform is in many respects predicated on the concept of risk sharing: sharing the financial risks of care (and the rewards of cost-effective care) between insurers, providers, and patients on the assumption that having ‘skin in the game’ will solve the problem. Bundled payments, episodes of care, ACOs, pay for performance: its all designed to restrain costs by sharing risk, which is presumed to motivate providers to adopt strategies and develop infrastructure designed to cut costs (first) and improve care (second). The most critical role that ACEP has in the next few years is to determine how EPs can participate in the context of payment reform while preserving our value and protecting our practices.
Let’s talk about ACOs first. To make a very complicated story short, ACOs are likely to be about full capitation, or about risk pools, or both; and they are also about consolidation of physician practices to facilitate this risk sharing. In my experience, one consequence of this consolidation is that the PHOs (physician hospital organizations – soon to morph into ACOs) tend to pay lower rates to EPs than health plans pay. EPs are going to have to find ways to share risk in ACOs as independent practitioners or as hospital employees without sacrificing significant income or undermining practice quality and autonomy. Half of ED physicians are either hospital employees or the employees of academic institutions, and the other half are partners or independent contractors (or employees) of groups contracted to staff the ED.

What the former need to understand about the latter is that the independent practice of emergency medicine is key to defining the commercial value of EP services: anything that undermines the payment of claims from an EP who is engaged in the ‘independent practice’ of EM undermines the wages of the EP who is employed by a hospital, a university or an HMO. We are all part of a national market for EP services. If the mode of our participation in ACOs, either as contracted groups, or employees, turns EP services into a commodity, we, and perhaps our patients, will suffer. Thus, when ACEP talks about EP participation in ACOs, or contributes to the development of model contracts, or policies for revenue or risk-pool distribution, or strategies for coordination of care with other ACO-participating providers; these three different modes of EM practice (independent contractor, employee, educator) need to be factored into the equation, most likely in separate and distinct approaches.

Another set of strategies for cost-containment and payment reform is the concept of bundled payments and episodes of care. I liken this to carving off most of the meat before throwing the bone to the pack of hounds. I suspect it will not be easy to identify episodes of care or bundled payment categories that will accurately reflect the contribution of EPs to the overall effort expended on these patient groupings. The management of abdominal pain is s tree with so many branch points it makes knee replacement look like an asparagus stalk. To complicate matters further, the three modes of EM practice will also have to be addressed in defining the EP’s share of the bundled payment for these episodes of care. For example, the work-up and management of a patient with abdominal pain in an environment like Kaiser is likely to be quite different than for the same patient in a community ED or a university teaching hospital where access to consultants, follow-up, and coordination of care are organized on a different model; even if you assume that under ACOs, access to EMRs and diagnostic services were equivalent. Personally, I think even though most episodes of care and bundled payments will focus on the higher-cost conditions, these approaches to payment reform are not likely to cover more than a modest percentage of the work EPs do, or the compensation we earn. Mostly, I believe, independent EM practitioners will be carved out of these payment reform modules because our level of participation will be difficult to predict, and our ability to restrict our role is limited. We are, after all, one of the few players on the team that regularly plays just about every position. The danger of being carved out, however, is that we then stick out like a sore thumb, an expense item begging to be trimmed.

I think one of the most effective ways for EPs and ACEP to contribute to solving the cost of care conundrum, and thus demonstrate our value to patients and payers alike, is through cost-effective care protocols. It is through the use of such protocols that EPs can earn a piece of the cost-sharing incentives, especially in risk pools. If we get carved out of bundled payments, we can get integrated back in under the risk-sharing umbrella through risk pools. Even so, it will still be necessary to utilize cost-effective care protocols that take into consideration each of the three EM practice modes. For example, hearing hoofbeats, you are more likely to encounter zebras in the ED of a major university teaching and referral center than in a small community hospital. Likewise, we should also focus on the most costly patients and types of care first, use best evidence, and take great care to protect our integrity as professionals and care givers. This last is what I mean by preserving the quality of our practice. An emphasis on cost-effectiveness is an invitation to inappropriate deferral of care, denial of access to needed testing and consultation, inappropriate discrimination in service, avoidable delays, and excessive risk taking, all of which hurts our patients and ourselves. Development of these protocols will not be easy, but adoption of these protocols across the spectrum of EM practice will be the real challenge. As I mentioned in the very beginning of this three-part diatribe, one hospital’s welcome cost effective protocol is another’s inadvertent financial misstep. It will take time to align incentives across all our modes of practice, medical staffs, hospital administrations, payers, and patients. Patient education as well as resident and provider training will be an essential part of the process, and all of us need to be part of the solution.

#1 by Suzy Wier – October 11th, 2010 at 11:27
At last!! It’s so refreshing to see a perspective that reflects systems thinking! You are spot on!
It is time to turn that telescope around friends, you look through the tiny end not the big end


#2 by Joseph Nowoslawski – October 18th, 2010 at 09:11

Yes systems perspective is very important here.

When the suits (non physicians) look at this business problem they may see another solution that will have more impact.

Please note that if 42% of acute care is provided in the primary care physicians office and only 28% in the ED’s when comparing the relative cost per visit in the ED to the primary care setting the conclusion will become more primary carea less ED.

My prediction is closing ED’s (see European ED/patient ratios) expanding primary care (probably with ancillary medical staff not physicians).

It is the only way the math works in the “ACO” world. T he time frame may take a decade to flower but the market (and the math) is always right.


Value Based Purchasing and Emergency Care – Is It a Perception Problem? PART II

If the perception is that a visit to the ED represents a failure of the health care system, it sure makes it difficult for ACEP to assert that emergency physicians routinely provide valuable services to patients and insurers. Apparently, many policy makers hold this perception. It reflects the consequence of cost shifting (especially by hospitals) to cover the care of the under- and uninsured, which makes it appear that EPs are wasteful and inefficient. Health plans have aggressively promoted this mis-perception, using very distorted data. A good example is a recent study (“Many-ED Visits Could be Managed at Urgent Care Centers and Retail Clinics”) from the California Health Care Foundation , a very pro-managed care organization. Is it reasonable to compare the cost of treating strep throat in the ED versus the Urgent Care Center when the UCC turns away every patient with no money and no insurance?  The attitude of the Health Plans is: “the uninsured are not our problem”, and would prefer to ignore our service to the uninsured in calculations of the value based proposition. The uninsured are not going away with Health Reform, and emergency physicians need to make sure that, in the value based purchasing calculation, no one takes for granted our mission to provide care to everyone regardless of ability to pay .

Fortunately, it’s really not all that difficult to challenge mis-perceptions about the value of ED care. The continuing growth in ED visits every year is perhaps the best testimony of the value that our patients ascribe to the care and service they receive in the emergency department. There are innumerable examples of the failure of our health care system in this country. A visit to the ED for acute appendicitis does not represent a failure of managed care, whereas a ruptured appendix that results from a patient being encouraged to wait until the morning to see their primary care physician certainly might.

With the demise of the idea of a national emergency care patient registry, it may not be easy to prove the value proposition for emergency medicine; but we don’t really need to prove our value so much as we need to substantiate it. First, we need to make sure that in comparing care in the ED to care in the office based practice; apples are compared to apples. Would all those assertions about ED patients not meeting the prudent layperson standard hold up if, for example, we could show that the incidence of peri-tonsilar abscess in patients with sore throat was three times the incidence of this complication in the PCP’s office? I think ED physicians all believe that children with fever in the ED are different than children with fever in the UCC, but try convincing a pediatrician. This will take some studies directed specifically at the value-based proposition, and that is where we should put the Emergency Medicine Foundation’s contributions to work. We heard at this year’s Council meeting about a compilation of hundreds of studies showing the value of good ED care (early antibiotic treatment in pneumonia, ED physician activation of cath labs, etc). This compilation needs to be translated into an easily digested summary with bullet points for the media and policy makers.

Although I am not a great fan of public relations, when you are faced with a perception problem, you need a well-financed, highly organized campaign. The ED has become the premier provider of diagnostic services and acute care; and in some EDs, half the patients who are discharged from the ED were sent to the ED by their PCP for evaluation and treatment. ED physicians provide four times as much charity care as any other specialty. These types of factoids need to be widely disseminated, because they change perceptions, and re-frame the value proposition. ACEP needs to provide the science, the sound bites, and perhaps the professional PR team; but this is not just a challenge for ACEP’s D.C. office, it is a challenge for every state chapter, and every emergency physician in every ED and every state. The next time you hear someone say how expensive ED services are, take the time to explain cost shifting, talk about 24/7/365, remind them about all the patients we manage to keep out of the ICU.  With ACOs, bundled payments, and cost-containment, we are in a fight for the economic survival of our specialty.

Risk sharing is our third challenge. I will try to cover that in PART III.


Practicing EM Under Health Reform – the New Paradigm PART I

Imagine that you are the medical director of an ED, and you decide to take to your hospital administrator a new set of cost-effective care policies that are designed to reduce the percent of admissions from your ED from 17% to 15%. In some hospitals, you might be met with incredulity: why would you do something like this when if would cost your hospital hundreds of thousands of dollars in revenue every month? You might be looking for another job. If you worked at a Kaiser hospital, you might be looking at a raise. If you worked at a hospital that was heavily involved in capitated managed care, your proposal might be welcome, but if the administrator of this hospital was particularly unscrupulous, you might be asked to apply these policies only to patients who are enrolled in the HMOs that had capitated the hospital for inpatient care, and not to those patients who were enrolled in a fee-for-service PPO. Is it any wonder, then, that here in Lost Vegas at the ACEP Council meeting, everyone seems to be having considerable difficulty figuring out how to define value based emergency care, or how to demonstrate to policy makers, insurance plans, regulators, legislators, hospital administrators, and patients that emergency physicians provide a valuable service and deserve to be fairly and generously compensated for this service?

With the Value Based Emergency Care Task Force’s report last year, it appeared that ACEP was taking some positive steps to prepare our specialty to respond to the value based reimbursement paradigm that was represented in health care reform legislation through Accountable Care Organization and pay for quality initiatives. Unfortunately, it would appear that the development of an Emergency Care Patient Registry database, which ACEP hoped to use to quantify the value we bring to our patients and our health care system, is impractical and too expensive. It also looks like those emergency medicine episodes of care, that would have allowed emergency physicians to participate appropriately in bundled payments, are likely to be pretty complicated and difficult to develop; and might unintentionally result in EP services being ‘classified as devoid of value’. Finally, the imperative to define how emergency physicians will integrate into the risk-sharing, pay for quality, accountable hospital-health plan-medical provider delivery models (the newly designated solution to our flawed health care system in this country) has been held hostage to the lack of clear indications as to how these organizations will actually work, and the variability that will evolve under different state regulations, different hospital systems, and different insurance plans. Given these problems and uncertainties, it is difficult indeed for ACEP to, as Gretzky once suggested, skate to where the puck is going to be.

I think part of the problem is that it’s really difficult to pin down the value-based concept. Is it more about the cost of care, or more about the effectiveness of care? For example (and I am making up these numbers), EPs could spend $10,000 a patient to generate a 55% survival from sepsis, or $30,000 a patient to generate a 65% survival rate. Which is the more ‘valuable’ protocol? You might think organizations like Kaiser have the answers, but Kaiser premiums are going up too. The perception out there is that EPs spend $35,000 per sepsis patient to achieve a 50% survival rate, and $500 to treat a strep throat when primary care docs spend $40. No wonder it seems like a nearly impossible task to identify the paths to emergency medicine participation in value based purchasing. ACEP will be turning to expert consultants to help define these approaches, but really, who knows our business better than our own members? I think the solution to this problem lies in the recognition that the question of quality or effectiveness of care is assumed to be a given; and that the expectation of legislators and regulators is that we need to provide high quality care at less cost, not the best possible outcomes at the least possible cost. This may seem like a nuance, but it is much easier to address the value proposition when value is defined by the real driver here. Let’s face it, as we are faced with looming national bankruptcy, the driver is cost, and where we need to focus is on the development of cost-effective care protocols, the identification of the best opportunities for cost savings, and the wide dissemination and adoption of these protocols so as to reduce the variability in emergency medicine practice that undermines cost-effective care. Whatever we are spending to achieve survival in sepsis, or treat the strep throat, it’s probably too much.

Another part of the problem we face with value based purchasing is a perception problem. More about that soon in PART II.