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With the Economy in the ICU, Pressure Increases on Emergency Departments

      If emergency departments (EDs) are part of the nation's early warning system for underlying socioeconomic problems, the crowding that emergency physicians have seen in recent years may have presaged the deep-seated, population-wide strains that are now recognized as a severe recession. The failure of major financial institutions, the decline of the stock market last October, and the proposals for the federal government to bail out the Big Three automakers and other sectors of the economy have made it impossible for economists and officials to ignore something that American emergency physicians have seen for years: that large numbers of their fellow citizens live on the financial precipice.
      The employer-insured are one layoff away from a drop through a porous safety net; many of the uninsured are already falling through. And over the coming months, say physicians and economists, the health care system is likely to see a drastic shift from the former group to the latter.
      “A serious downturn in the next few months, unless there's emergency help, is going to lead to a real influx of people who formerly had insurance and have no other place to go,” says Robert J. Blendon, ScD, professor of health policy and political analysis at the department of Health Policy and Management, Harvard School of Public Health. The newly unemployed and the firms that once paid their medical premiums are not the only ones whose wellbeing is at risk during the economic contraction. States will be hard-pressed to cover the rising costs of Medicaid and the State Children's Health Insurance Program (SCHIP), Blendon believes, and some hospitals may even face threats to their viability. The crash of 2008, he says, “appears to be the largest-scale recession we've had since the Great Depression.”
      Moreover, say some policy analysts, the nature of this recession is poorly understood, and the difficulty of recovering from it is hard to predict. The dramatic headlines to date have involved collapsing investment firms leading to a plunging Dow Jones industrial index, but the effects are not limited to the shareholding classes. The triggering events, says Glenn Melnick, PhD, senior economist at the RAND Corporation and Blue Cross of California Chair of Health Care Finance at the University of Southern California, affected the most important assets most Americans hold: their homes.
      Mortgage foreclosures in some areas could produce social dislocation in both forms and degrees that threaten the quality of medical care for surprisingly large parts of the population. “This is a much more complicated economic crisis than we've faced in many years, and I'm not sure that it's been figured out yet,” Dr. Melnick comments. “I think the whole mortgage/foreclosure crisis could depress economic growth for many, many years if they don't figure it out…. There could be waves of foreclosures, a couple million every year, for the next 3 or 4 years.”
      Just as the nation's EDs are uniquely responsive to the symptoms of a diseased economy, the nation's economy is headed for the policy equivalent of intensive care. The incoming administration of President-elect Barack Obama has its work cut out, as commentators have pointed out in numerous contexts. Obama's team may also encounter opportunities for much-discussed, long-delayed systemic reforms in the health care sector; as in the 1930s, a state of crisis can shake loose obstacles and foster constructive change. The chances of rebuilding the foundations of the medical economy in the long run, experts speculate, depend to a large degree on how policymakers and institutions manage the current uncertainties in the short run.

      Already Peaking Before the Wave Hits

      That America's EDs are already operating at or near capacity will come as no surprise to physicians working in them. Expanding capacity has not kept up with demand, which rose from 67 million visits in 1996 to 119 million in 2006, as reported by the Centers for Disease Control and Prevention (CDC).
      • Pitts S.R.
      • Niska R.W.
      • Xu J.
      • Burt C.W.
      National Hospital Ambulatory Medical Care Survey: 2006 emergency department summary.
      As ACEP president-elect Angela F. Gardner, MD, told the New York Times, “We have no capacity now.” The new National Report Card on the State of Emergency Medicine
      American College of Emergency Physicians
      National Report Card on the State of Emergency Medicine.
      establishes formal recognition of a situation that has multiple causes, including but not limited to the cause repeatedly identified in the lay press: the sharply rising numbers of uninsured patients. Conditions in EDs were approaching a critical point well before the current recession began.
      Jesse M. Pines, MD, MBA, MSCE, assistant professor of emergency medicine at the Hospital of the University of Pennsylvania and senior fellow at the Leonard Davis Institute of Health Economics, points to problems well beyond the ED itself, including institutional economic incentives and internal politics as well as demographic changes. Crowding in the entire hospital produces boarding in the ED, as do procedural bottlenecks in admitting patients from the ED to inpatient beds. “It's a patient throughput issue,” Dr. Pines notes, but “it's also that hospitals allow themselves to be over capacity because that's the profit-maximizing strategy.”
      Although EDs, contrary to some myths, are a profit center for many hospitals rather than a loss leader, direct admissions for non-emergent conditions make marginally greater contributions to the institutional bottom line than admissions through the ED. “A guy coming in for his elective heart procedure, a guy from the suburbs with good insurance” will offer more predictability in terms of both ability to pay and advance recognition of the time of admission, Dr. Pines says, than a random ED patient who may be uninsured or covered by Medicaid, with its lower payments. Filling beds with patients in the former category increases the likelihood of 12- to 18-hour waits for those in the latter.
      Logistics, too, creates logjams that exacerbate ED crowding. Decreased effective ED capacity, Dr. Pines has observed, “tends to happen most on Mondays, Tuesdays, and Wednesdays, because those are the same days when there are a lot of elective surgeries going on… and hospitals tend to prioritize the beds for elective procedures over the patients in the ED. The hospital will be full to capacity, and you'll have patients waiting in the ED for beds on the busiest day for the ED.
      “In our place, and in a lot of hospitals, Monday is the perfect storm… half the beds in the ED are dedicated to admitted patients, the other half are active beds, and essentially the effective capacity on your busiest day is one half of what it should be.” (Dr. Pines recommends “surgical schedule smoothing,” a simple policy of distributing procedures more evenly among the days of the week, as an effective strategy for breaking these bottlenecks. In practice, however, implementing such a schedule often evokes opposition from surgeons who cherish their time off; some threaten to take their profitable procedures to a different hospital if administrators raise the possibility of working larger numbers of days, even if total working hours remain constant.)
      Rising numbers of uninsured people intuitively heighten the already-intense volume pressure on EDs, but they have not been its chief cause to date, say scholars who have studied the phenomenon. The rise in adult ED use from 1996 to 2004, according to one recent study of national Community Tracking Study Household Survey data, reflected increasing use by insured middle-class patients whose usual source of care is a physician's office.
      • Weber E.J.
      • Showstack J.A.
      • Hunt K.A.
      • et al.
      Are the uninsured responsible for the increase in emergency department visits in the United States?.
      Percentages of uninsured visitors remained stable, even declining by a nonsignificant amount.
      Bluntly stated, it hasn't been the mythical uninsured person who follows the advice of outgoing president G.W. Bush and others
      • Meisel Z.F.
      • Pines J.M.
      The allure of the one-stop shop.
      simply to “go to the emergency room” and thus burdens the whole system -- the popular scapegoat of a “healthy, cavalier, uninsured ER abuser,” as Dr. Pines and Zachary Meisel, MD, recently described and debunked in Slate. It's been the insured patient who is unable to see his or her primary care doctor promptly.

      No Good Deed Goes Unpunished

      That physician may have even sent the patient there, RAND's Dr. Melnick says, because increases in both capacity and efficiency have made EDs a preferential point of access. “It could be,” he comments, that “more doctors in the community are telling their patients, ‘Rather than me hassle to get you admitted, why don't you just go to the ED? They'll work you up, you'll be admitted there, and then I'll come over and see you.'”
      Noting record-breaking hospital profits nationwide in 2007, capping a longer trend of prices and profit margins rising through the decade, Dr. Melnick holds what he calls the “contrarian view” that EDs add significantly to that growth. “We're finishing up a study we're doing for the California Health Care Foundation, looking at long-term trends in ED capacity, entry, and exit here in California,” he reports, “and what we're finding is substantial growth in ED capacity over the last 10 years, particularly over the last 5.” Dr. Melnick comments that “when people expand, they're expanding into markets they think benefit them,” and since his group finds that nearly half the hospitals in California have added beds or bays to their EDs, emergency care by inference is a financially healthy field.
      Visits per capita have not risen; Dr. Melnick attributes the rise in total visits to slow, steady population growth. He also notes a rise in services performed per ED patient and in the percentage of ED patients who are admitted, perhaps aided by managed care policies that implement “the ‘prudent layperson' standard” and loosen admission criteria. “I think the good news is that hospitals' financial status has been improving,” he says, “and that EDs' financial status also has been improving and contributing positively up until what I think is going to be a very, very difficult economic period for this country.”
      If EDs have been handling high demand admirably up to now, they are about to face their sternest test yet. Unemployment steers patients into the uninsured and underinsured categories, limits their ability to absorb deductibles and other uncovered costs, and gives them incentives to defer routine or discretionary care as long as possible. The specter of a medical catastrophe driving many borderline-solvent people into crippling debt, as reported anecdotally in increasing newspaper coverage, is conducive to denial and delay.
      One trend that may relieve ED crowding to some degree, Dr. Pines allows, is that a drop in discretionary inpatient procedures would reduce boarding. “What's happened with the economy,” he observes, “is there's been a reduction in the demand for all discretionary medicine.” In economic terms, different categories of health care present different levels of demand elasticity, or response to other variables: “You've just been in a major car accident -- that's not gonna really be elastic,” Dr. Pines says. Likewise, myocardial infarctions and other standard ED scenarios are strongly inelastic. (Arguably, pure emergency medicine is entirely about inelastic, immediate demand.) “But for a lot of other types of medical procedures, those tend to be very elastic.” He cites a recent conversation with an ophthalmologist, for example, who has seen a decline in Lasik procedures but no change in cataract removals.
      A drop in elastic care, both within the ED and upstairs, could relieve some of the pressure in EDs, at least in the short run. On the other hand, short-term advantages are by definition short-lived. “The aggregate numbers always show the uninsured defer doing things,” Harvard's Blendon says, and a decision to forgo a trip for discretionary care or screening now could mean a later trip for a true emergency and an expensive hospitalization. Dr. Pines agrees that “for some but not all procedures, if you do it earlier, you're more likely to have a better outcome.” The tightening economy may also reduce certain behaviors associated with high risks of accident or other adverse health effects, Dr. Pines conjectures, eg, less driving, less drinking, and less driving while drinking.
      Still, the recent economic figures portend consequences that commentators believe may overwhelm any ameliorating effects. During the Great Depression, Blendon recounts, widespread unemployment left many sick people outside the system altogether; they “just suffered, because they just couldn't pay for it.” This time, he says, few people are convinced that medical care is simply not an option at all, and EDs will take the hit. “I think what you have is people who think ‘Well, there is a way of getting care of last resort: I'm very, very sick, and I'm going to come in,'” he says. “People who could have been managed at a much earlier stage are going to show up on the doorstep in a much more serious situation.”
      Dr. Pines cautions that it is too early to estimate the sagging economy's effects on ED practice with much precision. “There are certain elements that will make visits go up,” he notes, “and certain elements that make our efficiency go up also. So the overall effect will really have to be borne out in the data.” Statistics on national trends in ED use, such as the National Hospital Ambulatory Medical Care Surveys published by the CDC, appear after about a 2-year lag time, and reports of current effects on ED activity are consequently more qualitative than quantitative. The crowding epidemic, Dr. Pines believes, makes it all the more important to establish better measurement systems in order to guide systematic responses. He cites a set of measures of ED crowding recently approved by the National Quality Forum, including left-without-being-seen rates, door-to-provider times, boarding times, and overall length of stay, as a step toward greater public accountability for hospitals.

      Snakebitten by the Backup Plans

      The recently jobless and their dependents can theoretically count on continued insurance protection under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the 1986 law that provides for temporary continuation of coverage at group rates. Although COBRA prevents a sudden cutoff accompanying job loss, economists caution that it is a weak substitute for employer-based insurance. COBRA normally provides coverage for a maximum of 18 months (extendable for 11 additional months in cases of disability during the first 60 days of coverage); a beneficiary must usually pay the monthly premium without an employer contribution – and, Blendon emphasizes, without the income from employment. For a beneficiary who is healthy enough not to need medical services at all, but who finds no new employment to pick up the slack, regular COBRA premiums can take a large bite out of working-class-level savings well before the benefit period expires. It is not rare for laid-off workers to describe their COBRA plans in terms involving serpents and fangs.
      There are several ways that a severe recession may expose this system's limits. “If people are laid off, even if they get COBRA, the recession may be long enough that they'll even exhaust their COBRA benefits,” says Dr. Melnick. “More hospitals and EDs will see patients who don't have coverage.” For workers who do not find new employment quickly, the terms of a COBRA agreement may come as a shock, particularly since premiums even at group rates have risen sharply since the last major wave of unemployment. Many will simply refuse to sign up. “The cost of COBRA has probably doubled since the recession in early 2000. And I'm sure people's incomes have not doubled since then,” Dr. Melnick continues. “I think the COBRA takeup rate is going to be lower this time.”
      Other components of the safety net are showing signs of stress. Dr. Melnick reports attending a recent meeting in a suburban county in northern California where local health and welfare officials reported a 70% increase in applications for that state's Medicaid program, known as Medi-Cal. The officials could only approve about 15% of those applications. The short-term unemployed may not meet various state requirements based on the average of prior year income; waiting a year to document low income to officials, Blendon comments, worsens many people's financial risk. Increases in the not-quite-Medicaid-eligible population imply a general shift from commercial insurance to either self-insured or uninsured status.
      Those who do qualify are not out of the woods either. “The effect of moving from private insurance to Medicaid, from the ED side, doesn't really make a lot of difference to us, but for a lot of these discretionary procedures, that makes a much bigger difference,” says Dr. Pines. “I know that some doctors' offices will actually prioritize certain types of insurance over others, so those patients might have to wait longer if they moved from private to Medicaid insurance.”
      “The economic downturn is not random across the country,” adds Blendon. “It's always concentrated in certain communities.” In states where auto plants have closed, for example, ripple effects not only involve auto workers but extend through these employers' supplier chains. At this writing, bankruptcy remains a distinct possibility for the Big Three. Large numbers of workers who have lost these firms' relatively generous benefits would present what Dr. Melnick calls “a tremendous hit” to medical providers in their catchment area.

      It's Getting Ugly Out There

      The most disruptive effects of this recession, some economists hold, stem from the burst in the housing bubble. It is too early to tell how much outright homelessness will ensue from the foreclosure epidemic in some areas, but whether former homeowners find rentals, move in with relatives, or endure short-term or long-term homelessness, none of these options are conducive to continuity of medical care. “The longer you're homeless,” Dr. Melnick says, “the more exposed you are to injuries, accidents, and illness, and the more frequent your ED use would be.”
      Some real estate analysts view the subprime-mortgage crisis as largely a problem of outlying exurban neighborhoods, where sprawl-style developments went up quickly and cheaply, their financial foundations no firmer than their construction.
      • Millard W.B.
      Suburban sprawl: where does emergency medicine fit on the map?.
      In southern California's Inland Empire area, for example, Dr. Melnick says, “there are thousands of homes that were built near the tail end of the boom that are probably not going to be occupied. And if they were, they're going to be empty soon.” Slum-like conditions may appear in such areas if an economic turnaround does not combine with a reversal of long-term transport-cost trends to revive the value of this housing form. Dr. Melnick adds that these areas are not well-served with emergency infrastructure: “The capacity expansion to those new areas has been somewhat slower,” he says. “In other words, the EDs didn't expand based on the number of houses that were built.”
      • Herbst-Bayliss S.
      Harvard endowment loses 22 percent in 4 months Reuters, Dec. 3.
      Citibank's plea last November for a public sector bailout, Dr. Melnick notes, implies that more people are losing the ability to pay their credit card bills. As the risk of poverty comes closer for millions, some institutions are taking measures that protect their own positions while exacerbating the situation for individuals. Dr. Melnick has seen reports of hospitals “contracting with data companies to get real-time evaluation of people's FICO scores [a credit evaluation developed by Fair Isaac Corporation]. So literally you go in, you register, and the clerk behind there looks at your FICO score, and if it's below a certain level, they ask for a higher deposit…. I think we're going to see more and more of that type of behavior by every business in this recession. It's going to make for a very ugly side to this.” If such practices create a new “untouchable” class in the United States, he adds, “that untouchable class is going to grow by the millions, just through foreclosure.”

      Crisis Just Might Create Opportunity

      For other institutions, harsh decisions lie ahead: how to sustain operations while minimizing layoffs and deciding which components of a complex enterprise are expendable. “What you end up doing is eating up any future investment,” says Blendon. “What happens in any business that's suddenly in trouble [is that] you don't buy the computers, you don't fix this, you stop the building program. That's what universities are doing across the country right now. There are cranes sitting around Boston that aren't moving.” Hospitals affiliated with universities that rely on either large endowments or short-term commercial paper for operating funds, or on philanthropy, are quickly finding that investments have evaporated (Harvard reportedly suffered an $8 billion loss, or 22% of its portfolio's value, in 4 months) and that personal donations tend to dry up in hard times.
      The public sector, Blendon says, should recognize how hard the medical community is being hit. Emergency physicians and hospital administrators, conversely, should “really become extremely vocal… for some sort of emergency assistance to help deal with the impact of this until the employment-based situation or some other type of insurance gets into place.” He strikes a rare note of mild optimism, however, by placing the current situation in a historical context and citing the precedent for short-term public relief. “There've been histories of this in other downturns; also, in 9/11, there were various pledges made in New York State to emergency rooms if they were flooded with people who'd been affected,” he recalls. “So the idea of providing emergency assistance to impact areas is not as if somebody would be inventing a new issue.”
      Any of the health care reforms that have been debated for years, commentators agree, will have to wait for the more immediate repairs. Dr. Pines finds any major changes unlikely during the Obama administration's first few years, simply because economic stimulation and “improving our reputation with the rest of the world” will occupy the White House's attention. Dr. Melnick predicts that any eventual restructuring (beyond incremental reform along the lines of an expanded SCHIP program) would more closely resemble Germany's system, which preserves a small private insurance industry as an option alongside the main public payer system, rather than the Anglo-Canadian single-public-payer model.
      Blendon finds it essential to recognize the distinct short-term and long-term effects of the current crisis and to develop appropriate approaches to both. Federal aid to the states is important to help absorb the flood of new demands on Medicaid and SCHIP. In the 1930s, “the focus was heavily on anything that created jobs, not paying for services,” and the public sector works planned by the Obama administration, he speculates, will be similarly directed at boosting employment. “Building hospitals,” he says, “turns out probably to create more jobs than helping people pay their medical bills.”
      However, Blendon finds that “in the short term, increasing coverage of the population has a huge impact on health, health care, and the appropriate use of emergency services.” Stemming the tide of uninsured citizens is too urgent a priority to place in a queue behind infrastructure projects. Many Obama voters specified health care reform as a high priority. For both the new White House and the new Congress, Blendon expects, “this'll be a very contentious debate, because [on] one side, they're going to say there's no money left, and on the other, there's going to be this anger: ‘You bailed out everybody.'”
      The nature of any longer-range reforms, Blendon says, depend on how the economy responds to initial measures. A shorter and milder recession, he contends, may actually do less to dislodge certain obstructionist interests and beliefs than a longer, deeper one. Popular dissatisfaction with the current employer-based insurance system may not last if economic comfort returns within a few years. A depression running beyond 4 or 5 years, however, “could lead to a fundamentally different view about government's role in health care, because the employer-based system will be hard to sustain in its current fashion. But you don't know. In history you only know looking back.”
      As President Franklin D. Roosevelt improvised a series of pragmatic responses to the Great Depression, eventually abandoning his commitment to balanced budgets and adopting the Keynesian strategy whereby “you spend your way out of the depression,” Blendon sees an opportunity for the new White House to apply to the health care system as a whole the same form of analysis that he finds assuming greater importance within the system: evidence-based decisionmaking. “I think there has been a revolution generationally -- in medicine, management, everything else -- where people really do believe that you can objectively look at whether things are working, whether it's clinical treatment, behavior, or institutional decisionmaking, and say institutions that structure themselves this way appear to be more effective in lots of measures.”
      Evidence-based medicine, he finds, is gradually replacing procedures of questionable clinical value with those yielding verifiable benefit. The National Quality Forum measurements of ED crowding cited by Dr. Pines represent a step in this direction. Insurers and administrators are increasingly employing quantitative critiques to decide which pharmaceuticals, imaging studies, or screening tests they will pay for, despite the preferences of individual patients or physicians. In turn, during a period of financial constraint, Blendon envisions an approach that might be called evidence-based hospital administration, applying the same methods to evaluate whether an institution, or the existing system as a whole, is producing desirable results. Setting systemic priorities with objectivity and transparency, Blendon says, is essential in holding institutions accountable during hard times.
      “I think one of the things that will sweep into the health care field is much more visible disclosure and transparency of administrative costs,” he adds. The American system's large overhead relative to other countries may be a target of choice for evidence-driven budget cuts, especially as the clinical benefits of diagnostic and therapeutic procedures come under increasing scrutiny. “When these numbers are there, and there's not enough money, and people are saying, ‘Well, we can't pay for this clinically or that,' I think the medical community is going to use the transparency to argue that you're cutting the wrong things…. People delivering care, as well as patients, get very angry being told ‘We can't do all these things' if they have a sense that the administrative overhead telling them to do this is incredibly high.”
      It would be a profound historic irony if the instruments of cost-benefit analysis, used so many times to stifle physicians' choices, demonstrated during an era of tight budgets that many budget-cutters themselves weren't pulling their weight. This is only possible, Blendon cautions, in the context of open determinations about what components of the system are worth preserving: in other words, through substantive democratic processes. “It isn't enough just to have evidence. It really has to be out in community discussions about paying for things,” he urges. “We need boards and mechanisms which really discuss these issues more visibly, professionally, and publicly…. I live in a world where people think if we just do the study, the civilization changes. And it doesn't.”

      References

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        Are the uninsured responsible for the increase in emergency department visits in the United States?.
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        (Slate) (Accessed December 9, 2008.)
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        The next slum?.
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        • Millard W.B.
        Suburban sprawl: where does emergency medicine fit on the map?.
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        Harvard endowment loses 22 percent in 4 months.
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