How health plans can derail ER care costs

A new initiative is calling for establishing transparency in billing while encouraging efficient facility utilization, keeping unnecessary medical costs at bay.

“The goal of the ER Savings Initiative is to deliver care in a hybrid model that collaborates with health systems to eliminate the unnecessary use and costs of their ERs that can clog the system, which reduces their profit margin,” according to Azar Zaidi, vice president of strategy at Legacy ER & Urgent Care, creator of the Initiative.

Zaidi

Legacy ER & Urgent Care, a hybrid care facility offers ER and urgent care services under one roof, is gaining traction with payers, employers, and health care systems “simply because it provides parallel incentives for them as well,” Zaidi says. “At Legacy ER & Urgent Care, patients meet with board-certified and ER-licensed physicians who review their health issue and determine if they need to be treated as an ER patient or as an urgent care patient. Patients are billed accordingly, allowing them to only pay for the care they need.

Research conducted in preparation of the ER Savings Initiative showed staggering numbers on just how healthcare facilities overcharge-and patients overpay. The ER Savings Initiative employs a value-based healthcare mindset while revealing the true cost of visiting an emergency room versus visiting an urgent care facility. According to the Center for Medicare and Medicaid Services, the per capita expenditure for healthcare is approaching $10,000 each year.

Yet, the ER Savings Initiative shows that a large portion of those costs could be avoided if consumers are well informed, according to Zaidi.

“The ability to drive down unnecessary ER utilization and spending, while establishing an objective delivery model for right/appropriate use, is an outcome that all participants would like to achieve,” he continues. “It’s rare to find a for-profit, value based healthcare initiative that is a win/win for multiple parties.”

On the patient side, savings come from healthcare facilities charging fair amounts for care provided and patients making smart choices on exactly where to go for medical services, according to Zaidi.

“If a patient were to visit an ER for a simple case such as strep throat, they would be charged ER prices,” he says. “In reality, the patient only needed to visit their primary care physician or an urgent care center where it would not be treated as an emergency case, therefore the patient would not be charged for emergency services when it wasn’t truly necessary.”

Next: ER vs. urgent care costs

From a healthcare facility standpoint, providers of medical services are called on to streamline billing in an honest and transparent manner, and eliminate waste in the form of utilizing and charging patients for services that are not needed, according to Zaidi. 

According to Zaidi, on average, urgent care cases cost approximately $226, while that exact same case treated at an ER or a freestanding ER will cost approximately $2,039.

“That’s a hefty difference, especially if the case doesn’t actually require an ER,” he says. “For the sake of people’s budgets, it’s important to recognize that unless the case is an absolute emergency, visiting a strict urgent care facility is better cost-wise. It can mean the difference of $1,813.”

In theory and practice, hospitals can serve more efficiently and maximize their own profits if freed from treating unnecessary ER visits.

The hybrid model works to serve hospitals by serving them with appropriate direct admissions, while retaining acute care needs.

“The strategy of decentralized locations that serve as an extension to a hospital network are in convenient and accessible locations and help increase market share for their systems,” Zaidi says. “Ultimately, it not only saves them time and money, but helps them grow in the areas where they are meant to serve the communities they reside.”

Providers in the hybrid model are focused on episodic care and understand their function as part of a greater health system.

“Partnering with a comprehensive referral network that includes primary care and specialty services is one of the staples of how this initiative operates,” Zaidi says. “Payers and providers favor the right use of ER and urgent care, as it helps drive the overall spend of healthcare down.”