EM finances were strong…in 2019
Also: Moral Crisis in the NYT, AAEM v Envision, the dirt on nonprofit hospitals & Medicare Advantage, and more Glaucomflecken.
Top of the Week
Drs. Jesse Pines and Arjun Venkatesh’s teams - giants of the emergency medicine workforce literature - published two articles in June that answer interesting questions about EM’s finances. The bottom line: would be great to party like it’s 2019 again.
Q: How much revenue did US emergency medicine practices collect per emergency physician in 2019?
A: $798,000 per US emergency physician.*
Details: In “Estimated reimbursement impact of COVID-19 on emergency physicians”, Venkatesh et al calculate total 2019 US emergency medicine professional fee collections to be $34 Billion. Per “The 2013 to 2019 Emergency Medicine Workforce”, 42,618 US emergency physicians saw at least 50 Medicare patients in 2019. $34,000,000,0000/42,618 = $798,000.
*: $798,000 is likely an underestimation for two reasons. a) Procedure billing codes were not included in the calculations; b) Estimates of private insurance collections were based on median in-network rates, thereby missing reimbursement from the balance billing of patients.
Q: How much did emergency medicine patient care revenue decrease in 2020 compared with 2019, not including government stimulus payments?
A: $6.6 Billion - a 19.4% drop from 2020 to 2019.
Q: After government stimulus payments, how did revenue and profits for emergency medicine practices change in 2020 compared to 2019?
A: Unknown. The article’s methodology does not deliver a clear answer.
Details:
The article's calculations did not include the Paycheck Protection Program forgiven loan amounts. According to the AMA, healthcare providers received $100 Billion in PPP funds. The authors dismiss this source of funding: “Finally, select emergency physician groups that qualify as small business may be eligible for financial support via the Paycheck Protection Program (PPP); however, this mechanism is likely not available to most emergency physicians who may work in larger group, hospital employed, multispecialty group, or academic settings.” To look up how much emergency medicine practices collected from PPP, click here.
A JAMA study of hospital finances (tracked by RAND), showed that “COVID-19 relief fund effectively offset the financial losses for hospitals.” This finding is surprising, as most hospitals shut down profitable elective procedures for several months in 2020. The Venkatesh article does not adequately explain why emergency medicine groups would not have benefited from the same sources of government largess, targeted both at hospitals and provider groups.
Q: Based on data in “The Cost Shifting Economics of United States Emergency Department Professional Services (2016–2019)”, how much did emergency medicine practices collect from commercial health insurance per visit in 2019?
A: $355 per ED visit (not including collections from balance billing)
Resources: To find underlying private health insurance data, check out FAIR Health and the Health Cost Institute.
Q: On average, how much did emergency medicine practices collect per visit from Medicare and Medicaid in 2019?
A: Medicare reimbursed $149 per ED visit; Medicaid: $75 per visit. In other words, EM practices collected as much from one privately insured patient as five Medicaid patients.
Q: What were EM employers’ average profit margins (ED revenues less costs)?
A: 5.7% (not including revenue from balance billing)
Q: Which US region delivered the most uncompensated ED care to uninsured patients?
A: The South. And it’s not even close. 62.1% of all US uninsured ED visits were in the South.
Q: If EM practices in the South see more than twice as many uninsured patients as in other regions, how do they stay in business?
A: High reimbursement rates from commercial insurance. 2019 average collections from private insurance by region (not including balance billing):
Midwest: $320/visit
Northeast: $302/visit
South: $410/visit
West: $342/visit
Q: What do these data indicate about the future of emergency medicine reimbursement?
A: Decreased EM reimbursement appears to be on the horizon for the following reasons:
Medicare rates have not kept up with inflation for years. “From 1992 to 2016, Medicare payments rose 15%, whereas inflation rose 144%, a 53% relative decline.”
The share of patients with private health insurance is falling. “From 2009 to 2018, the proportion of Medicaid-paid ED visits increased from 24.7% to 32.4%, whereas commercial insurance visits fell from 32.9% to 27.7%.”
The No Surprises Act has decreased provider group leverage when negotiating with insurers while prohibiting out-of-network collections.
Uninsurance rates are increasing.
Government COVID relief funds are no longer available.
EM Practice
A federal court will decide if the AAEM lawsuit vs Envision alleging that the PE-owned firm violated the corporate practice of medicine can proceed despite the Envision bankruptcy.
ED visits for suicidality in pediatric patients increased by >4x between 2011 and 2020.
Average time from admission decision to ED exit increased by 61% between 2019 to 2022. #exitblock
House of Medicine
“The Moral Crisis of America’s Doctors” in the New York Times. The article highlights concerning impacts of medicine’s financialization.
Rising interest rates are putting the private equity business model at risk. “Interest costs at the median private equity-backed company ballooned to 43% of Ebitda last year, according to research published last month by Verdad Advisers, which analyzed 350 such companies that are either publicly traded or have publicly traded debt. Not only is that six times as much as the median S&P 500 company, but the interest burden will keep growing this year as rates keep rising.”
Aledade raised $260 million to reshape primary care through independent value-based practice.
New York legislature passed a bill banning non-competes.
KQED: “Patients Are Waiting Days for Care in Some California ERs”
Hospitals & Health Systems
Human Rights Watch takes a deep dive into US nonprofit hospital businesses. “Like wolves in sheep’s clothing, unscrupulous nonprofit hospitals can hide among their responsible peers, benefiting from their public perception and tax status as charitable institutions while engaging in extractive and exploitative practices.”
Medicare Advantage is a scam. “Overpayments to Medicare Advantage plans now exceed 20% or $75 billion annually, underscoring the urgent need for reform.”
Emergency physicians in Asheville, NC have accused HCA and TeamHealth of overcharging patients through unnecessary trauma alert activations.
Health systems’ 2023 operating margins.
Nursing & Allied Health
Incredible Health’s nursing survey:
94% of respondents described the severity of the nursing shortage in their health systems as critical.
Only one-third (33%) of nurses feel fairly compensated in their roles.
Almost all (93%) health systems utilize travel nurses.
The Dispo
Yet another gem from Dr. Glaucomflecken: “Emergency medicine consults”