Emergency departments save lives, but at what price?

Emergency departments are the trusted safety net of the health care system, and sometimes the only option for uninsured individuals. However, arbitrary and expensive prices in some EDs are harming patients. As hospitals increasingly rely on “chargemaster” software to set prices, ED prices have become divorced from actual cost and instead tied to the hospital’s profit goals.

Unfair markups in the ED

Researchers from Johns Hopkins analyzed the effect of this billing software on ED prices by looking at billing records in emergency rooms across the country. They found that patients were being charged 3.4 times higher on average beyond what Medicare would pay for ED services. However, these markups varied wildly, with some hospitals not marking up ED bills at all, and others charging almost 12 times what Medicare pays. With that amount of variation, it’s no wonder most ED clinicians have trouble estimating the cost of care for common treatments.

On average, ED prices are marked up 3.4x higher than what Medicare would pay

Even hospitals in poor and underserved neighborhoods overcharge. According to the Johns Hopkins study, markups were especially high at for-profit hospitals with higher populations of uninsured, Hispanic, and African American patients.

A harmful new reimbursement policy

But even for insured patients, the ER may be about to get more expensive. Blue Cross Blue Shield of Georgia announced recently that they will no longer reimburse patients for ED visits that turn out not to be emergencies. As doctors and policy experts have pointed out, there is no way for doctors or patients to know whether a certain symptom is truly an emergency or not until an examination is performed. If people are worried about paying for a “false alarm” ED visit, they might forgo life-saving care.

This is “profits first, people last behavior”

Essentially, insurers are demonstrating “profits first, people last behavior,” said Rebecca Parker, MD, FACEP, president of the American College of Emergency Physicians. Then again, so are hospitals. The ED needs to continue to be an inclusive place for all kinds of care, even care that could be found in more appropriate settings like primary care practices — if only we had a robust primary care system. Until then, watch out for unfair and non-transparent prices.