Incentives Matter & Emergency Care Innovation

It amazes me that it has taken so long to come up with this simple innovation to the Federal emergency care mandate.

The article explains:

When someone comes into the Medical Center Hospital ER, they’re assessed to determine the severity of their ailments.

“They’ll all be seen by an ER physician,” Divisional Director for Emergency Services Dena Mikkonen said.

If the injury or illness is determined to be minor, they’ll be directed to a local clinic rather than be treated in the ER.

But if that person chooses to remain in the ER and have their minor ailment treated there, they will have to pay a $250 deposit, MCH Business Office Director J.R. Edmiston said.

This sounds reasonable.  This helps keep the ER capacity freed up to handle true emergencies and encourages people who do not have dire emergencies to use care that is more appropriate for their condition.

Of course, there was the predictable criticism (also from the article):

Federal law requires ER physicians to look at everyone who comes to the ER and treat those who have life-threatening illnesses or injuries, but depending on the initial ER examination for a referral is problematic, said Andrew Fenton, president elect of the California chapter of the American College of Physicians.

Based on the examination a doctor has to decide whether or not the person’s injury or illness requires a stay in the ER.

“Asking a physician to make such a determination is challenging in a short period of time,” Fenton said.

While I think this criticism is overblown, Fenton ignores that the patient can decide to stay by making the $250 deposit.

With everything there are trade-offs.  There are no perfect solutions.  A lot of things are justified by cherry-picking the trade-offs that suit our view.  

At some point a physician will make a bad call (humans are fallible), misdiagnose and send a patient off that needed emergency treatment.  Folks like Fenton will grab on to those stories and say this is bad policy and it’s worth treating everyone in emergency rooms “if we could just save one life”.

And they won’t give due consideration to all the trade-offs.

First, misdiagnosis and mistreatment occurs within the emergency room now.  We’ve all heard these stories. It’s not immediately clear how this new approach would increase misdiagnosis of life-threatening symptoms.

In fact, this approach may improve diagnosis and treatments of minor ailments. Sending the patient to another doctor could be better because second opinions from other doctors may catch things the first doctor missed.

That’s one positive trade-off Fenton would miss.

Also, he will not likely consider how many additional lives were saved by focusing ER resources on true emergencies.

He won’t understand that the opportunity cost for saving that “one life” may be two or three lives, because cramming the ER with patients with other minor ailments to save that one life-threatening misdiagnosis in a thousand (or more) may take ER capacity away from folks with true emergencies.

Fenton offers one trade-off to support his side.  The urgent care facilities may not have the facilities to do all the tests they need.  But, I think that’s a big maybe.  Again, with the second doctor checking, they may have a better chance of getting a good diagnosis than had the person stayed at the emergency room.

Fenton might say to me, You wouldn’t want to be the one person with the misdiagnosis.

To which I would respond, No. But you haven’t convinced me this will actually cause anymore misdiagnosis than occurs now.  Further, I also don’t want to be one of the two or three people with true emergencies that don’t get treated because the emergency room capacity is used by people with minor ailments.  At that point, the emergency room has ceased being an emergency room.  Much like how health insurance has ceased being insurance.


7 thoughts on “Incentives Matter & Emergency Care Innovation

  1. As a former Emergency Medicine physician, I agree with Dr. Fenton’s concerns (as you have expressed them). Typically, the physician cannot or does not determine if the patient’s condition is truly a “minor” or “major” problem until he/she has completed the examination AND THE TREATMENT. Before exploring this last concept further, let’s consider what would happen IF the doctor told the patient that his problem is “minor” and that he should just go see his own doctor or go to the health department or an urgent care clinic. A very significant number of patients would likely decide that since it’s a “minor” problem, they don’t really need to seek further care. Unfortunately for the initial doctor, when the patient’s “minor” problem develops into a “major” problem, a jury will likely decide that it always was a major problem and that the doctor bears some (and hence all) of the responsibility for the patient’s subsequent problems. Now, let’s return to my assertion that many (if not most) patients will receive some actual treatment – rather than just an assessment based upon an exam and/or tests – and consider the dilemma faced by the physician. I’lll give a few common examples:

    Patient A comes to the ER and says he fell cut his hand on a drinking glass. If he has just a “simple” laceration, this can likely be repaired in an urgent care clinic. However, if he has a piece of glass embedded in the depths of the wound or he has lacerated a tendon, etc., it becomes a significantly different problem requiring a higher level of expertise and facilities. The physician cannot adequately determine this in many cases until he anesthetizes the wound and explores it. Once, he cleans and anesthetizes the wound, he has initiated treatment. To stop, bandage the wound and send the patient elsewhere could constitute abandonment. Further, the patient could rightly allege that he had to have two injections of local anesthetic (with the attendant risks) as a result. Finally, once the exam/treatment had already reached this point, the emergency department would have already expended more than 99% of the resources that would be used in completing the patient’s care. Thus there would be a huge potential downside is sending him elsewhere, but only a tiny gain.

    Patient B shows up with abdominal pain. The vast majority of the time, this turns out to be something “minor”. The difficulty lies in the fact that (a) it’s catastrophic if it’s “major” and it’s missed, and (b) it often takes significant time and resources (tests) to be reasonable certain that it’s “minor”. Again, in sending the patient elsewhere, the ER is faced with potential of a HUGE loss in exchange for a tiny gain.

    The REAL problem and the REAL solution have been ignored and new government mandates (EMTALA) have been enacted that have only substituted one problem for another. The initial concern was that a minuscule number of emergency departments sent some indigent patients away (the sensational ones were pregnant women in labor) with bad outcomes. They did so – and here’s the REAL problem – because the courts were not holding people responsible for there medical bills and this was becoming a significant financial problem unless hospitals were going to pass this cost on to those who would pay. Any good or service that one individual provides to another is NOT a right unless we are to assert that the individual providing the good or service is a slave and can be forced to provide that good or service for free. As such, medical care is not right. However, by declaring it to be such and forcing emergency departments to see patients with trivial complaints for “free”, the government has simply substituted one problem for another. Instead of having a rare bad apple that turned away a patient, we now have emergency departments flooded with non-paying patients with trivial complaints utilizing very scarce and expensive resources the cost of which is shifted (remember, nothing is really free) to the rest of us. While the government pinheads assumed that the “greedy” hospitals would just eat this additional expense, any economist worth his salt would have predicted that the tax incidence would fall upon the consumer. Is there anybody out there who really believes that the employer’s half of your social security tax really comes out of his pocket?

    • Thanks for the comment. I agree with your last paragraph. That is the real problem.

      Re: your first paragraph, I think the issue is “semantics”. Instead of “minor”, use “non-emergency”.

      Based on the reasons you provide, I’d say that Patients A and B would qualify as emergency care for the reasons you state. However, over time I would think that market in urgent care would adapt to be able to effectively handle these situations if more were sent that way.

      And, I still don’t believe the instances of misdiagnosis would necessarily increase under this setup. I know anecdotes aren’t statistically significant, but I was misdiagnosed with abdominal pain in the ER. My final treatment did not take place in the ER. I was admitted to the hospital and ran through tests and the right cause was determined 24 hours later. While I may have had an urgent condition, I apparently did not have an “emergency” condition.

      • If Mr Jones learns that he can be seen for free at the ER, but must pay at the urgent care clinic, he will go to the ER (ceterus paribus). The folks that usually end up at urgent care centers (at least those not at a hospital) are folks who value their time, can pay and don’t consider their problem to be life or limb threatening.

        In terms of your final two paragraphs. The point I was trying to emphasize is that because the potential downside (big lawsuit) far exceeds the benefit – especially when a disposition cannot be made until the ER has used 90% of the resources they would have used if they had completed the treatment – the ER has little or no incentive to halt the diagnostic/therapeutic process in midstream and send the patient elsewhere. By the time they can determine that a true emergency does not exist (with a reasonable probability such that the risk of a lawsuit is less than the risk of losing resources, the (financial) damage has already been done and there is no incentive to compound this by gaining only lawsuit risk. PS It ‘s typically the non-payers who suit over frivolous reasons

        • Great comments.

          I had some more thoughts on patients A & B, I think we forgot that they can still choose to stay at the ER. What if you told the patient upfront that the situation doesn’t look like an emergency situation give them their options. If they choose to stay and it turns out to not be an emergency situation, they will be responsible for the bill since the federal emergency care mandate doesn’t cover non-emergency situation? If they leave, it’s on their own accord.

          Regarding Mr. Jones, if he knows that he may have to pay at the ER if his condition does not turn out to be an emergency, he may choose on his own accord to do something else. I believe this will be the key benefit from the Mr. Jones who never come to the ER because they know there’s a chance they may have to pay.

          I believe your last sentence.

  2. Seth, for decades, we have “trained” the takers that they are “entitled” to these things and have “taught” them that there will be no or very limited repercussions for their “bad” behaviors that break the social contract. Our government was instituted to protect personal property and enforce contracts. When it stopped doing what it was meant to do and create the milleau in which all could prosper, it created the conditions that encourage none to prosper – other than the “new class” of political elite. Furthermore, in our new politically correct society, any ER doctor proposing such options to a patient will likely find himself on the six o’clock news for a variety of reasons and heaven forbid it’s a white doctor asking a minority patient to pay or leave. Unfortunately, many members of our society have not been taught the critical importance of property rights, enforcement of contracts and free rider issues.

    • No argument from me on that. I wish we could reverse that. That’s one motivation for me keeping this blog — to expose some people to the bad consequences of our distorted feedback loops.

      In the meantime, I’m glad we have folks like those in Michigan willing to try something. It’ll be interesting to see if they learn anything. We can debate potential outcomes. Fenton may be right. You may be right. I might be right. Or, we might all be wrong.

      I consider things like this a small experiment (see the blurb in the margin about my border photo at top). If it doesn’t work, it’ll go away quietly without much fuss — another in the billions of failed ideas out there. If it works, others may adopt it and these folks may have found a simple way to offset some of the bad consequences of the distorted feedbacks caused by the emergency mandate.

      Thanks for the comments. I hope to see more from you in the future.

  3. To help reduce health care costs, can’t facilities have a 24 hour urgent care clinics combine with emergency rooms. If it is not truly emergent, then the urgent care physician can see the patient. Everyone goes thru triage, and from there they can be directed to the urgent care physician, or the emergent care physicians. Certain diagnostics would not be performed for the urgent care clinics, the emergent care side would be for those diagnoses or treatments that will lead to admission.

    I think this would be a great development, especially for teaching hospitals, because residents can staff the urgent care clinics.


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