Better Solutions for Healthcare

Healthcare Dive: Higher ER prices, case severity boosting spending

By Tony Abraham

May 31, 2018

Dive Brief:

  • National emergency room use remained largely unchanged between 2009 and 2016, but new data from the Health Cost Institute shows higher-severity codes were used more frequently, and the average prices for those codes grew more rapidly than lower-severity codes.
  • HCI’s study expands upon previous research characterizing spending, price and utilization for five Current Procedural Terminology (CPT) codes that indicate the severity and complexity of an ER visit.
  • The study found, among other things, that spending per person for the highest-severity ER visit grew by 145% between 2009 and 2016, with the second-highest severity ER visit growing by 124% in that same time period.

Dive Insight:

As ER costs rise, payers are attempting to blunt the impact with controversial new policies that try to reduce unnecessary emergency visits. Some policies, such as Anthem’s, look to move patients away from ERs to less expensive locations like retail clinics. Others, such as UnitedHealthcare’s, are more focused on making sure hospitals are billing properly. Both payers are dealing with provider pushback.

And the emergency care landscape is changing as more freestanding ERs are established and urgent care centers proliferate. Hospitals continue to compete with these on-demand facilities, which have seen some recent controversy. ER physicians disputed the results of a study published last year by the Annals of Emergency Medicine that found ER patients pay as much as 10 times more than urgent care patients for similar diagnoses. The study was later pulled for editorial review. However, other research has shown that ER visit rates have dropped in some states where retail clinics have popped up to provide on-demand care.

HCI’s ongoing research reflects concern over the country’s high — and rising — healthcare costs. Data HCI published earlier this year found healthcare spending per person is growing at a faster rate than previous years, with spending increasing 4.6% in 2016 and 4.1% in 2015, following periods of sub-3% growth between 2012 and 2014.