Uninsured children: An untapped revenue source?

ED enrollment expands services to young patients

Each day, approximately 75,000 children present for treatment in the nation’s EDs, and according to two recently published studies, they represent not only an opportunity to cure, but an opportunity to expand your ED’s revenues as well as its social outreach to this large group of young patients.

According to a new study in the Annals of Emergency Medicine, there are 8 million uninsured children in the United States, and an enrollment program in your ED targeting such children can generate enough revenue to more than pay for the program costs.1

In this pilot study, a well-trained, dedicated worker was hired to enroll uninsured children seeking care in the ED. During the 10-month study period, 4,667 uninsured children were seen at Children’s Hospital of Michigan, Troy, during the enrollment program hours, and 39% (1,083) filed applications. The vast majority (84%) of those applications were accepted, and 67% of applicants were enrolled in Medicaid.

During the study period (September 2001 to June 2002), average revenue to the facility from each outpatient ED visit for Medicaid was $135.68, the average other insurance visit was $210.43, and the average uninsured visit was $15.03.

The study authors subtracted the revenue typically received from an uninsured patient ($15.03) from the average Medicaid payment ($135.68) to calculate the amount of revenue the hospital was losing from uninsured children who could be enrolled in Medicaid ($120.65). Based on this amount, researchers found total annual revenue the hospital could be receiving if these uninsured patients were enrolled in Medicaid was $224,474; and the net revenue, after accounting for the program costs, was $157,414. (Editor’s note: These figures represent revenues for the hospital — not for the physicians.)

"Since this started as a pilot program, we wanted to make sure the revenue generated was based on people employed — in this case, a total of three FTEs [full-time equivalents]," explains Prashant Mahajan, MD, MPH, pediatric emergency medicine physician at Children’s and the paper’s lead author. "Even if you take out full labor costs, it still leaves some money."

Reinforcing the message

A second study,2 which is going to press in the American Journal of Public Health, supports and expands this message, notes James A. Gordon, MD, MPA, assistant professor of medicine at Harvard Medical School, attending physician in the department of emergency medicine at Massachusetts General Hospital in Boston and the lead author.

"The two studies together deliver a more powerful message than either one alone," says Gordon, who also authored an editorial about Mahajan’s paper in Annals.3 "In Annals, you had a single-center study where case workers helped parents fill out insurance applications for uninsured children" he says. The authors report how the hospital can recoup expenses for the social outreach workers simply from the proceeds of retroactive insurance benefits.

The new American Journal of Public Health study is a multicenter trial — data from four urban EDs across the country — with a control group and an intervention group. Study staff distributed state-sponsored health insurance applications to families of uninsured children presenting for care. "If the children showed up uninsured, we simply handed the family an application," Gordon notes. The study team followed up by telephone as well as by reviewing state records after 90 days and found they could nearly quadruple the odds that the kids would be insured successfully.

"By studying both a control and intervention group, we were able to quantify that simply handing out applications can lead to coverage for an additional 14% of uninsured children. Applied to EDs across the country, that translates to coverage for hundreds of thousands of additional children each year," he adds.

Outreach also key

Gordon adds that it’s essential to have social outreach workers as part of your ED care team. "If you only pay attention to patients’ medical issues, and not their social circumstance, then you will not have contributed to their overall health as much as you could have," he asserts. "What the Michigan study shows is if you have social outreach workers participating in helping to enroll uninsured children, it will also provide hospital revenue to cover personnel costs."

Gordon says he has had a long-standing interest in social outreach in an ED setting, but the question always has arisen as to how it could be supported financially. "In Michigan, they showed you can create a program where everyone benefits," he observes. What’s more, Gordon continues, the revenues demonstrated in the Michigan study do not represent all the potential revenues such an approach could generate.

"This study just quantified the amount of money that would have been recouped from retroactive payment for the original ED visit," he adds. "Now that these patients are hooked up with insurance, they will be more likely to seek regular care in their local health system. Retroactive compensation for a single ED visit may only be the tip of the iceberg — clinic and specialty visits can now be reliably compensated, as well as return visits to the ED."

Gordon notes that in his work he has found that the ED is one of the sole institutional contact points for disadvantaged families. "And it may be the contact point for many who present for free health care that they otherwise might not be able to afford — and the perfect site for insurance enrollment," he concludes.

At the very least, "EDs across the nation should hand out state-sponsored health insurance applications to all uninsured children presenting for care," Gordon adds.

References

1. Mahajan P, Stanley R, Ross KW, et al. Evaluation of an emergency department-based enrollment program for uninsured children. Ann Emerg Med 2005; in press.

2. Gordon JA, Emond JA Camargo CA. The State Children’s Health Insurance Program (SCHIP): A multi-center trial of outreach through the emergency department. Am J Public Health 2005; 95: in press.

3. Gordon JA. The science of common sense: Integrating health and human services in the hospital emergency department. Ann Emerg Med 2005; in press.

Sources

For more information on enrolling uninsured children through the ED, contact:

  • James A. Gordon, MD, MPA, Attending Physician, Department of Emergency Medicine, Massachusetts General Hospital, 55 Fruit St., CLN 115, Boston, MA 02114-2696. Phone: (617) 726-7622. Fax: (617) 724-0917. E-mail: jgordon3@partners.org.
  • Prashant Mahajan, MD, MPH, Children’s Hospital of Michigan, Pediatric Emergency Medicine, 508 Georgian Court, Troy, MI 48098. Phone: (313) 745-5260. E-mail: mahajan@comcast.net.