Healthcare Reform's Impact on Hospital Emergency Departments: 6 Considerations

It goes without saying that the new healthcare reform law will have far-reaching implications on hospitals across the country. With many provisions in the healthcare reform law scheduled to take effect in 2011, hospitals and physicians need to refocus their efforts now on enhancing patient care while managing costs. These same expectations apply to emergency departments. As such, it is exceedingly critical that hospitals are prepared for how their respective emergency departments will be impacted by reform. Here, Lynn Massingale, MD, FACEP, executive chairman of TeamHealth in Knoxville, Tenn., shares six thoughts on how healthcare reform will impact hospital emergency departments and what hospitals and physicians can do to prepare for these impending changes.

Healthcare reform's impact on hospital EDs


1. Reduced reimbursements. In the early stages of formulating healthcare reform, the American Hospital Association agreed to accept $155 billion in reimbursement cuts over 10 years from federal healthcare programs at hospitals across the country. Reduced reimbursements for medical services also apply to emergency care, which will force hospitals to re-think how to contain ED costs as part of their overall strategies to remain financially viable amidst reimbursement reductions.

"A specific provision of the healthcare reform bill mandates reductions in reimbursements to hospitals, some of which can be offset by improvements in productivity," Dr. Massingale says. "Because of this, hospital EDs will need to focus on improving efficiency in addition to cost-containment initiatives."

2. Increased coverage. Although approximately 32 million uninsured Americans will be covered under healthcare reform by 2014, the shortage of primary care physicians to accommodate these individuals could result in even more patients flowing through the country's EDs.

"Even today, a patient with an acute but not life-threatening problem may have trouble getting in to see a primary care physician immediately," he says. "The shortage of primary care physicians is only expected to worsen in the next five to ten years, causing these patients to rely on the ED for care. We must prepare for that increase."

3. Repercussions of care provided. Hospitals may need to reassess the way patient care has traditionally been delivered, from a reactive mentality of treating patients as they become sick to a more proactive, longer-term approach of controlling and preventing illness. Dr. Massingale says hospitals could potentially face financial penalties if certain quality indicators, such as readmission rates, do not meet benchmarks defined by federal regulation.

"For hospitals, this may mean considering the use of hospitalists to work with the patient's family and/or other caregivers on an effective discharge plan so these patients don't have to return to the hospital for something that could have been prevented," he says.

Preparing for the changes brought on by reform


4. Implementing standardized evidence-based practices. Physicians, by nature, are wired to research and collect data in order to come to certain conclusions, whether it be related to patient diagnoses or proper treatment protocols. To improve quality and contain costs related to ED visits, physicians must commit to more uniform work-ups and treatments. Dr. Massingale says there is currently too much variation in physician practice behaviors, which will not be affordable or sustainable in the long term.

"Let's say, for example, a physician orders CT scans on 90 percent of his or her patients with a headache, and another physician orders CT scans for only 10 percent of patients," he says. "One physician might think more often of migraine and the other suspects early strokes. The difference can mean life or death. Cost and quality suffer unless we tackle this variation in practice behaviors."

While it may be true there aren't always clear-cut answers in treatment protocols, physicians should make it a best practice to continuously study and collect data, utilize health IT, investigate areas of wide variance, study medical literature and conclude best treatment practices from that research. "This way, we can better understand which patients truly need the expensive blood test or need the new brand-name antibiotic versus a generic brand. "If we simply study our own data and adjust the medical practice from there, a decrease in variation will follow," he says.

5. Find simple ways to reduce costs. Exceptional efficiency will ultimately be the key to success in reducing healthcare costs. Dr. Massingale points out that while hospitals may need help identifying ways to reduce costs in this complex environment, some relatively simple methodologies already exist. One method hospitals have adopted to reduce cost is the lean method, which was created in the automotive industry as a means to eliminate waste in order to increase productivity and contain costs. Dr. Massingale suggests that if physicians in a hypothetical ED were able to see 2.2 patients per hour compared to 2.0 as a result of increased productivity and efficiency, hospitals could be spared the need to invest in multimillion dollar expansions to accommodate increased patient volumes.

"Modest changes can have a significant impact on operational and staffing costs," he adds. "Even actions as simple as arranging every examine room to have medical supplies and equipment placed in identical locations can improve efficiency."

6. Optimize efficiency with healthcare IT. The market for healthcare IT applications and solutions has rapidly become very sophisticated, more so since the passage of the American Recovery and Reinvestment Act, which incents hospitals that demonstrate meaningful use of electronic health record systems. In addition to electronic medical record deployment, there are ED-focused computer models available today that allow hospitals and physicians to study patient arrival time and acuity, model changes in the flow of patients in the ED, and adjust processes to reduce patient wait times. "Given this kind of technology, hospitals can map out processes over an entire day and predict where bottlenecks will occur," he says.

In one example, Dr. Massingale describes a hypothetical situation where six patients could arrive at an ED at the same time. "If it takes ten minutes for a nurse to triage each patient, that sixth patient wouldn't be able to get any medical attention for 50 minutes, but by utilizing computer models TeamHealth has been able to optimize the use of existing space and staff to improve the ED experience," he says.

"It’s a complex time in healthcare, but with strong physician and administrative leadership, creativity, and a survival instinct, the strongest and most adaptable organizations will succeed and flourish in this new environment," Dr. Massingale says.   

Learn more about TeamHealth.

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