In a fee-for-service world, the emergency department (ED) brings value to hospitals and their communities in a couple of different ways. First, they provide a rapid response to urgent needs. They are skilled in trauma, triage and rapid diagnostics to get really sick and injured people the right care, right away.

Second, EDs are the welcome mat for inpatient care. Hospitals get value from the volume that comes to them through the ED – both medical and especially surgical admissions, which typically have higher margins.

What will happen to EDs when fee-for-value takes hold, when hospitals will not necessarily derive value from more volume?

To answer that question, we must understand what is valued in a fee-for-value world. The rising value may be in its ability to keep patients from being admitted and to reconnect them with their accountable care providers.

If that is the case, then hospitals may divest of EDs and some of the downside associated with them such as use for non-emergent events and inability to turn anyone away regardless of ability to pay, high costs of malpractice insurance and difficulty in attracting and retaining talent.

Perhaps a new generation of freestanding EDs arises and perhaps they co-exist with urgent care centers to triage the significant volume attributed to patients unable or unwilling to go to a physician’s office for care. Or maybe they will partner with ambulatory centers or the growing retail care health centers. Or they could further evolve into short-stay facilities and/or emergency surgical centers.

What evidence, if any, do we have or can we look for to suggest that ED evolution may be underway?

One indication the business model is shifting might be a growth of freestanding Emergency Centers. According to Caroline Rossi Steinberg, VP for trend analysis at the AHA the number of freestanding EDs has increased by 65% in the last five years.

Add reports of more hospital closures while demand for emergency and trauma care has increased, and you have overcrowding, inefficiency and high potential for misuse of resources. One study on New York City ED utilization from 1994 to 1998 found that only 17% – 18% of visits were “Emergent and Not Preventable or Avoidable.” Further, the National Quality Forum has suggested that increasing access to primary care can reduce ED overuse by up to 56%.

Meanwhile, reports of one community health center show that it is using freestanding emergency services department as an anchor for a destination ambulatory care strategy.

I’ll stick by my prediction that use of this model will grow. Some are concerned that proliferation of existence and use of freestanding EDs will increase costs by treating non-emergent conditions with the more expensive resources in these centers.

I disagree. I believe the business model will evolve to include better triage and use of the right levels of care through partnerships with urgent care, ambulatory care and freestanding surgical centers reducing cost and improving access to care over time.

What do you think the future holds for emergency departments?

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About the author

Laura Kanov is Vice President of Corporate Strategy at Allscripts. She is responsible for the facilitation and development of strategic planning, its alignment and integration with product strategy, business development and finance. This includes providing leaders with a framework and tools to help apply strategic and economic theory to every day decision-making. At Allscripts, Laura has held positions in marketing, product development, solutions management and professional services. Prior to Allscripts, she worked extensively in hospital and healthcare organizations in enterprise software implementations, workflow analysis, productivity and operations consulting as well as clinical line management.

1 COMMENT on

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Meredith Clark says:

03/25/2013 at 5:34 am

I think it’s true that “use of freestanding EDs will increase costs by treating non-emergent conditions with the more expensive resources in these centers.” Whereas the emergency rooms or urgent centers getting popularity for their extreme services on a nominal or lower cost basis. People are getting much better treatment and also they don’t have to go long in a search for a hospital in a emergency condition. So it’s a better growth prospect for the ER in the near future.
24 Hour Urgent Care Houston

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