COVID-19 driven decline in emergency visits: Has it continued, is it permanent, and what does it mean for emergency physicians?

INTRODUCTION: Hospital-based emergency departments have been a sustained source of overall hospital utilization in the United States. In 2019, an estimated 150 million hospital-based emergency department (ED) visits occurred in the United States, up from 90 million in 1993, 108 million in 2000 and 137 million in 2015. This study analyzes hospital ED visit registration data pre and post to the COVID-19 pandemic describe the impact of on hospital ED utilization and to assess long-term implications of COVID and other factors on the utilization of hospital-based emergency services. METHODS: We analyze real-time hospital ED visit registration data from a large sample of US hospitals to document changes in ED visits from January 2020 through March 2022 relative to 2019 (pre-COVID baseline) to describe the impact of the COVID-19 pandemic on EDs and assess long-term implications. RESULTS: Our data show an initial steep reduction in ED visits during the first half of 2020 (compared to 2019 levels) with rebounding occurring in 2021, but never reaching pre-pandemic levels. Overall, ED visit volumes across the study states declined in each year since 2019: 2020 declined by -18%, 2021 by -10% and the first quarter of 2022 is -12% below 2019 levels. CONCLUSIONS: There is a wide range of potential long-term implications of the observed reduction in the demand for hospital-based emergency services not only for emergency physicians, but for hospitals, health plans and consumers.

Emergency departments: The economic engine of hospitals - Evidence from California.

BACKGROUND: It is important that policy makers, emergency physicians, hospital administrators, and health system planners understand the expanded role of hospital emergency departments (EDs). OBJECTIVES: We sought to document the expanded role hospital EDs and their economic impact on overall hospital activity between 2002 and 2017. METHODS: This is a retrospective analysis of hospital ED capacity, utilization, and financial data from all general acute care hospitals in California (2002 through 2017). We calculate changes in ED capacity, annual ED visits and admissions through the ED, and the share of total hospital charges associated with ED generated utilization. RESULTS: EDs now account for well over half of all inpatient admissions to the hospital and ED outpatient visit volume has also grown substantially over time. By 2017 EDs within California's general acute care hospitals generated 67% of the total hospital economic activity (as measured by charges), up from 40% in 2002. CONCLUSION: Overall, our data reveal that EDs are now the economic engine of hospitals and play a much larger role in the overall health care system, suggesting many unexplored policy, manpower, market, and health system design implications for further research.

Decomposition of the drivers of the U.S. hospital spending growth, 2001-2009.

BACKGROUND: United States health care spending rose rapidly in the 2000s, after a period of temporary slowdown in the 1990s. However, the description of the overall trend and the understanding of the underlying drivers of this trend are very limited. This study investigates how well historical hospital cost/revenue drivers explain the recent hospital spending trend in the 2000s, and how important each of these drivers is. METHODS: We used aggregated time series data to describe the trend in total hospital spending, price, and quantity between 2001 and 2009. We used the Oaxaca-Blinder method to investigate the relative importance of major hospital cost/spending drivers (derived from the literature) in explaining the change in hospital spending patterns between 2001 and 2007. We assembled data from Medicare Cost Reports, American Hospital Association annual surveys, Prospective Payment System (PPS) Impact Files, Medicare Provider Analysis and Review (MedPAR) Medicare claims data, InterStudy reports, National Health Expenditure data, and Area Resource Files. RESULTS: Aggregated time series trends show that high hospital spending between 2001 and 2009 appears to be driven by higher payment per unit of hospital output, not by increased utilization. Results using the Oaxaca-Blinder regression decomposition method indicate that changes in historically important spending drivers explain a limited 30% of unit-payment growth, but a higher 60% of utilization growth. Hospital staffing and labor-related costs, casemix, and demographics are the most important drivers of higher hospital revenue, utilization, and unit-payment. Technology is associated with lower utilization, higher unit payment, and limited increases in total revenue. Market competition, primarily because of increased managed care concentration, moderates total revenue growth by driving lower unit payment. CONCLUSIONS: Much of the rapidly rising hospital spending growth in the 2000s in the United States is driven by factors not commonly known or well measured. Future studies need to explore new factors and dynamics that drive longer-term hospital spending growth in recent years, particularly through the channel of higher prices.

Utilisation, out-of-pocket payments and access before and after COVID-19: Thailand's Universal Health Coverage Scheme.

The goal of Universal Health Coverage (UHC) is that everyone needing healthcare can access quality services without financial hardship. Recent research covering countries with UHC systems documents the emergence, and acceleration following the COVID-19 pandemic of unapproved informal payment systems by providers that collect under-the-table payments from patients. In 2001, Thailand extended its '30 Baht' government-financed coverage to all uninsured people with little or no cost sharing. In this paper, we update the literature on the performance of Thailand's Universal Health Coverage Scheme (UCS) with data covering 2019 (pre-COVID-19) through 2021. We find that access to care for Thailand's UCS-covered population (53 million) is similar to access provided to populations covered by the other major public health insurance schemes covering government and private sector workers, and that, unlike reports from other UHC countries, no evidence that informal side payments have emerged, even in the face of COVID-19 related pressures. However, we do find that nearly one out of eight Thailand's UCS-covered patients seek care outside the UCS delivery system where they will incur out-of-pocket payments. This finding predates the COVID-19 pandemic and suggests the need for further research into the performance of the UHC-sponsored delivery system.

Trauma Center Hospitals Charged Higher Prices For Some Nontrauma Care Than Non-Trauma Center Hospitals, 2012-18.

Rising prices are a major cause of increased health care spending and health insurance premiums in the US. Hospital prices, specifically-for both inpatient and outpatient care-are the largest driver of rising health care spending in the commercial insurance market. As a result, policy makers and employers are increasingly interested in understanding the determinants of hospital prices. Hospitals serving as trauma centers are often endowed by regulators with monopoly power over trauma services in their geographic areas, and this monopoly power may spill over to nontrauma services. This study focused on the growing number of designated trauma centers and how trauma center status affects hospital prices for other, nontrauma services. We found that hospitals designated as trauma centers charged higher prices for nontrauma inpatient admissions and nontrauma emergency department visits when compared with hospitals that were not designated as trauma centers, even after controlling for potential confounders.

Post-COVID trends in hospital financial performance: updated data from California paint an improved but challenging picture for hospitals and commercially insured patients.

The COVID-19 pandemic caused major disruptions to the operation and financing of US acute care hospitals. Previous research has documented early effects of the COVID pandemic on hospital financial performance. This paper updates the literature with current data on utilization and financial performance for a large sample of California hospitals covering the period 2017 through the end of 2022 and the first quarter of 2023. The data show that, while hospital overall utilization has largely returned to pre-COVID levels, patient mix has changed and financial performance still lags. Hospital net income margins remain below pre-COVID levels which could trigger price increases to commercially insured patients to offset continuing post-COVID financial shortfalls.

COVID-19 created substantial disruptions and stresses to our health care system, including hospitals, and as such, it is critical to understand how hospital financial performance continues to be affected by these challenges. This study analyzes current data (through quarter [Q] 1 of 2023) to assess evolving financial trends affecting hospitals. The data show that hospitals weathered the initial impact in 2020 and 2021 but encountered challenging financial conditions in 2022 as net income from both operating and nonoperating sources fell dramatically in the face of a sustained increase in operating costs and decreasing revenue from nonoperating sources. Pressures on net income from operations persisted through Q1 of 2023, although nonoperating income has rebounded. Importantly, the data show that trends vary substantially across hospitals and that there is a large subset of hospitals that remain under severe financial pressure and may require assistance from policymakers to sustain operations until their financial positions are stabilized.

Disproportionate share hospital subsidies for treating the uninsured.

BACKGROUND: Federal, state, and local governments provide substantial subsidies to so-called "safety-net" hospitals, in part, to offset the loss in revenue associated with providing a disproportionate share (DSH) of care to low-income and uninsured patients, with the goal to improve access to care for uninsured and ensure affordable care for them. OBJECTIVES: We investigate the targeting of DSH subsidies and their impact on pricing to uninsured patients in acute care for-profit and nonprofit hospitals. METHODS: The study sample includes all California acute care private hospitals that report comparable financial data to the State and covers 2001 through 2006 time period. Relative price to uninsured is measured as the percent difference of uninsured payments from Medicare payments, by comparing percent of charges paid by uninsured as a group to percent of charges paid by Medicare within each hospital. RESULTS: Sixty-five percent of all uninsured care among private hospitals is provided by nonprofit hospitals that are non-DSH. Although, uninsured patients still pay lower prices at DSH hospitals compared with non-DSH hospitals of the same ownership category, this difference reduced substantially over time. For-profit DSH hospitals serve a smaller share of uninsured patients and charge higher uninsured prices than nonprofit non-DSH hospitals but receive the highest DSH subsidy as a percent of their revenues. CONCLUSIONS: In California, DSH subsidies do not target highest providers of care to uninsured and in 2005-2006 have had very small potential as a mechanism of reducing prices to uninsured.

An empirical analysis of hospital ED pricing power.

OBJECTIVES: Empirical evaluation of market power that hospitals gain over health plans through hospitals' ability to cancel their contracts with plans while keeping large shares of plans' emergency patients and getting paid for them at above-market rates. STUDY DESIGN: Case-study analysis of 5 California hospitals that initially had contracts with most commercial health plans and then cancelled all those contracts at the same time. METHODS: We conducted a before-and-after case-study analysis comparing volume, price, and net revenues for the 5 study hospitals 3 years before and up to 4 years after the cancellation of their commercial contracts. The volume and price trends in study hospitals were compared with data on control hospitals in the same geographic area over the matching study period. RESULTS: Despite substantially increasing their prices on a noncontracted basis, the 5 study hospitals collectively retained 50% of their commercial health plan volume in first 2 years after the cancellation and 41% of their commercial volume in years 3 and 4, with net commercial revenues increasing as a result. At the same time, the simulated costs of treating the patients from out-of-network hospitals more than doubled for the health plans. CONCLUSIONS: In hospital-payer negotiation, many hospitals have an upper hand: Their threat to retain large portions of their emergency patients and revenues after becoming out of network is credible and it imposes disproportionate costs on the payers, which partially explains the continuing rise in hospital prices.

The California Competitive Model: How Has It Fared, And What's Next?

California became very successful in controlling rising health care costs by promoting price competition through market-based, managed care policies. However, recent data reveal that the state has not been able sustain its initial success in controlling growth in hospital prices. Two powerful trends emerged in California that eroded the conditions needed to sustain price competition. To ensure timely access to emergency hospital services, government regulators enacted regulations that had the unintended effect of giving hospitals tremendous leverage when contracting with health plans. Also, antitrust authorities allowed hospitals to consolidate into multihospital systems by adding members that were not direct competitors in local markets. The combined effect of these policies and consolidation trends was a substantial reduction in the competitiveness of provider markets in California, which reduced health plans' ability to leverage competitive provider markets and negotiate lower prices and other benefits for their members. Policy makers can and should act to restore competitive conditions.

The effects of multi-hospital systems on hospital prices.

US hospital prices are rising again after years of limited growth. We analyze trends in hospital prices during a period of significant price growth (1999-2003) to assess whether hospitals that are part of multi-hospital systems were able to increase their prices faster than non-system hospitals. We find hospitals that were members of multi-hospital systems were able to increase their prices substantially more than comparable non-systems hospitals (34% for large systems and 17% for small systems). Further, we find that the systems effect is not confined to hospitals that have other system member hospitals in their local markets. One possible explanation is that hospitals belonging to non-local multi-hospital systems have improved their bargaining position vis-à-vis health plans.

Disabled Medicare beneficiaries by dual eligible status: California, 1996-2001.

This highlight describes the characteristics and inpatient utilization of under age 65 disabled California Medicare beneficiaries by dual eligible status (i.e., Medicaid State buy-in coverage or not). More disabled dually eligible beneficiaries are younger, non-White, and in fee-for-service (FFS) than non-dually eligible beneficiaries. Disabled dually eligible beneficiaries experienced consistently higher hospitalization rates and average length of stay (LOS) than nondually eligible beneficiaries from 1996 to 2001. Inpatient days remain higher among dually eligible beneficiaries when stratified by the system of care, age, sex, or race. In addition, the hospitalization rate of disabled dually eligible beneficiaries was higher for most diagnoses, but how much higher varied by condition.

Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems.

A surge in hospital consolidation is fueling formation of ever larger multi-hospital systems throughout the United States. This article examines hospital prices in California over time with a focus on hospitals in the largest multi-hospital systems. Our data show that hospital prices in California grew substantially (+76% per hospital admission) across all hospitals and all services between 2004 and 2013 and that prices at hospitals that are members of the largest, multi-hospital systems grew substantially more (113%) than prices paid to all other California hospitals (70%). Prices were similar in both groups at the start of the period (approximately $9200 per admission). By the end of the period, prices at hospitals in the largest systems exceeded prices at other California hospitals by almost $4000 per patient admission. Our study findings are potentially useful to policy makers across the country for several reasons. Our data measure actual prices for a large sample of hospitals over a long period of time in California. California experienced its wave of consolidation much earlier than the rest of the country and as such our findings may provide some insights into what may happen across the United States from hospital consolidation including growth of large, multi-hospital systems now forming in the rest of the rest of the country.

House Calls: California Program For Homebound Patients Reduces Monthly Spending, Delivers Meaningful Care.

In 2009 HealthCare Partners Affiliates Medical Group, based in Southern California, launched House Calls, an in-home program that provides, coordinates, and manages care primarily for recently discharged high-risk, frail, and psychosocially compromised patients. Its purpose is to reduce preventable emergency department visits and hospital readmissions. We present data over time from this well-established program to provide an example for other new programs that are being established across the United States to serve this population with complex needs. The findings show that the initial House Calls structure, staffing patterns, and processes differed across the geographic areas that it served, and that they also evolved over time in different ways. In the same time period, all areas experienced a reduction in operating costs per patient and showed substantial reductions in monthly per patient health care spending and hospital utilization after enrollment in the House Calls program, compared to the period before enrollment. Despite more than five years of experience, the program structure continues to evolve and adjust staffing and other features to accommodate the dynamic nature of this complex patient population.

The cost of an emergency department visit and its relationship to emergency department volume.

STUDY OBJECTIVE: This article addresses 2 questions: (1) to what extent do emergency departments (EDs) exhibit economies of scale; and (2) to what extent do publicly available accounting data understate the marginal cost of an outpatient ED visit? Understanding the appropriate role for EDs in the overall health care system is crucially dependent on answers to these questions. The literature on these issues is sparse and somewhat dated and fails to differentiate between trauma and nontrauma hospitals. We believe a careful review of these questions is necessary because several changes (greater managed care penetration, increased price competition, cost of compliance with Emergency Medical Treatment and Active Labor Act regulations, and so on) may have significantly altered ED economics in recent years. METHODS: We use a 2-pronged approach, 1 based on descriptive analyses of publicly available accounting data and 1 based on statistical cost models estimated from a 9-year panel of hospital data, to address the above-mentioned questions. RESULTS: Neither the descriptive analyses nor the statistical models support the existence of significant scale economies. Furthermore, the marginal cost of outpatient ED visits, even without the emergency physician component, appear quite high--in 1998 dollars, US295 dollars and US412 dollars for nontrauma and trauma EDs, respectively. These statistical estimates exceed the accounting estimates of per-visit costs by a factor of roughly 2. CONCLUSION: Our findings suggest that the marginal cost of an outpatient ED visit is higher than is generally believed. Hospitals thus need to carefully review how EDs fit within their overall operations and cost structure and may need to pay special attention to policies and procedures that guide the delivery of nonurgent care through the ED.

The effects of case mix on hospital costs and revenues in managed care environments.

Due to competition and managed care, hospitals have argued that the rate of increase in hospital cost is greater than the rate of increase in hospital revenue. It is important to pay hospitals based on the expected resource use of patients that hospitals treat. However, managed care organizations pay hospitals based on negotiated prices that do not consider the expected resource use of patients. The purpose of this paper is to provide a better understanding of those factors affecting hospital cost and revenue in California using the hospital financial and utilization data for selected years from 1986 to 1998. By developing case mix indexes (CMIs) using all hospital discharges in California, this study found that the coefficients for CMIs in total and inpatient hospital revenue models were greater than those in hospital cost models. Over time, however, the differences in coefficients for CMIs in hospital revenue and cost models become smaller and smaller. Thus, this study shows that the difference between hospital revenues and hospital costs, looking at hospital case mix, has decreased, although hospital revenues are still greater than hospital costs.

Funding, coverage, and access under Thailand's universal health insurance program: an update after ten years.

BACKGROUND: In 2001, Thailand implemented a universal coverage program by expanding government-funded health coverage to uninsured citizens and limited their out-of-pocket payments to 30 Baht per encounter and, in 2006, eliminated out-of-pocket payments entirely. Prior research covering the early years of the program showed that the program effectively expanded coverage while a more recent paper of the early effects of the program found that improved access from the program led to a reduction in infant mortality. OBJECTIVE: We expand and update previous analyses of the effects of the 30 Baht program on access and out-of-pocket payments. DATA AND METHODS: We analyze national survey and governmental budgeting data through 2011 to examine trends in health care financing, coverage and access, including out-of-pocket payments. RESULTS: By 2011, only 1.64 % of the population remained uninsured in Thailand (down from 2.61 % in 2009). While government funding increased 75 % between 2005 and 2010, budgetary requests by health care providers exceeded approved amounts in many years. The 30 Baht program beneficiaries paid zero out-of-pocket payments for both outpatient and inpatient care. Inpatient and outpatient contact rates across all insurance categories fell slightly over time. CONCLUSIONS: Overall, the statistical results suggest that the program is continuing to achieve its goals after 10 years of operation. Insurance coverage is now virtually universal, access has been more or less maintained, government funding has continued to grow, though at rates below requested levels and 30 Baht patients are still guaranteed access to care with limited or no out-of-pocket costs. Important issues going forward are the ability of the government to sustain continued funding increases while minimizing cost sharing.

Improving the health of Californians: effective public-private strategies for challenging times.

This paper summarizes the discussion that occurred at a November 2003 roundtable on philanthropy and health policy making. The roundtable was intended to stimulate a conversation about the strategic interplay of health policy and philanthropy in a challenging economy; to gain a richer understanding of the needs and expectations of funders and policymakers so that resources can be leveraged far more effectively; and to identify practical, collaborative approaches for advancing policy development and implementation. The gathering included more than fifty key leaders from state and national foundations; state policymakers; representatives from the California governor's office and key state health agencies and commissions; private-sector leaders; and academics.

Hospital emergency departments: the authors respond.

In response to a perceived crisis in California's emergency department (ED) capacity, Glenn Melnick and colleagues sought to construct an empirical database that could bring objective data to bear on this important issue. In this response they address some of the substantive issues raised by the authors of four preceding commentaries. These issues include the use of aggregates and averages, the omission of trauma centers, staffing shortages, and overcrowding. In their view, the paper has added reliable new information to better understand the underlying economics faced by community hospitals with EDs and how they have responded over the past decade.

Emergency department capacity and access in California, 1990-2001: an economic analysis.

Media report that hospitals are closing their emergency departments (EDs) and reducing access to ED services, raising concerns that EDs are not sustainable under competition and managed care. We analyzed financial, economic, capacity, and utilization data for California EDs for 1990-2001. We found that contrary to media reports, hospitals are not abandoning the ED market. Rather, our results show a robust market, where hospitals are adding ED capacity to meet increased demand and to maintain access. Supporting economic analyses show that EDs are sustainable since they generate a sizable and growing portion of inpatient admissions, which contribute to overall economic viability.