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ED Clinicians Generally Unaware of High, Unreimbursed Costs of Care

June 13th, 2017

Charges for emergency care far exceed what insurance covers, but most emergency department clinicians appear to be unaware of those costs, according to recent research.

An article in JAMA Internal Medicine reports that, on average, adults seeking care at EDs are charged 340% more than what Medicare pays for those services. The Johns Hopkins Medicine-led analysis of billing records for more than 12,000 emergency medicine physicians across the United States also suggested that minorities and uninsured patients bear the brunt of those sky-high costs.

“There are massive disparities in service costs across emergency rooms and that price gouging is the worst for the most vulnerable populations,” explained senior investigator Martin Makary, MD, MPH, professor of surgery at the Johns Hopkins University School of Medicine. “This study adds to the growing pile of evidence that to address the huge disparities in healthcare, healthcare pricing needs to be fairer and more transparent.”

Another study, published in The Journal of the American Osteopathic Association, determines that most clinicians providing emergency care are oblivious to those costs. In fact, a survey of 441 emergency medical professionals found that only 38% of the physicians, physician assistants, and nurse practitioners could accurately estimate the costs for three conditions they regularly treat.

Interviewers led by researchers from Michigan State University College of Osteopathic Medicine in East Lansing asked the ED professionals to identify the cost of care for three common scenarios: a 35-year-old woman with abdominal pain, a 57-year-old man with labored breathing, and a 7-year-old boy with a sore throat. Medical histories, findings from physical examinations, diagnostic test results, and interventions were provided to the respondents, who also were offered four cost ranges for each scenario.

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The correct cost range was chosen by 43% for the woman with abdominal pain, 32% for the man with labored breathing, and 40% for the child with a sore throat, study authors point out.

For the JAMA Internal Medicine study, investigators obtained Medicare billing records for 12,337 emergency medicine physicians practicing in nearly 300 hospitals in all 50 states in 2013 to determine how much EDs billed for services in contrast to the Medicare allowable amount.

EDs were found to be charging anywhere from 1.0-12.6 times ($100-$12,600) more than what Medicare paid for those services. On average, emergency medicine doctors had a markup ratio of 4.4, which works out to physician charges of $4 billion vs. $898 million in Medicare allowable amounts.

“Healthcare professionals in the ED continue to have an inadequate understanding of the costs associated with care routinely provided in the ED,” concluded the authors of the JAOA study. “Education concerning cost, such as through the computerized physician order entry, is likely to improve efficiency and decrease costs to the patients as well as the healthcare system overall.”

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