As a hospital or system executive, one of the key metrics you likely track is the patient volume seen in your emergency department (ED). Like many leaders, however, you’ve likely been experiencing patient volume declines over the past several months or quarters. What is behind this trend, and how long will it continue?
HISTORICAL ED VOLUME TRENDS
The Centers for Disease Control (CDC), which houses and tracks the largest database of longitudinal healthcare utilization statistics, indicates that emergency department (ED) volumes started changing their growth trajectory around 2014/2015, which is consistent with the experience of large emergency medicine groups and hospital systems. Throughout the 1990s and the early 2000s, ED volumes grew. From 2013 to 2014, there was an increase in utilization of roughly 8%, the last time aggregate volumes increased. From 2014 to 2015, there was a 3% decline. While nationwide data isn’t yet available for 2016 through the present, anecdotal reports indicate that ED volume is still trending downward.
LARGE SYSTEMS REPORTING ONGOING DECLINES
The large, for-profit hospital systems have been reporting a downward trend, some for several quarters now. The data in the below chart comes from second quarter 2018 earnings releases, comparing ED volumes for the same quarter over prior year using same-store ED data where reported:
While it may be tempting to attribute this decline in ED volumes to provisions in the Affordable Care Act, the American College of Emergency Physicians and other emergency medicine industry experts say the decline is actually the result of a convergence of several long-term trends and not one individual factor:
- The growth of managed care organizations
- The rise of urgent care centers
- Insurance plans asking patients to shoulder a greater share of healthcare costs, particularly for outpatient services such as ED visits
EFFORTS TO CURB ED ”OVERUSE” SUCCESSFUL?
Prior to the decline, a number of widely publicized reports claimed there was an overuse or misuse of the ED. This led to a number of strategies to curb ED “overuse,” including:
- The redesign of primary care to improve access and scheduling.
- The development of alternative sites for non-urgent primary care.
- Improvements in case management for chronic disease patients.
- Employers and payers ramping up efforts to educate patients on the most appropriate points of care to reduce unnecessary ED visits.
- Tied with the above, the use of financial incentives and disincentives for visits to the ED.
DRIVERS OF PRICE SHOPPING
The proliferation of high-deductible health plans (HDHP) and the publicity surrounding insurers declining payment for nonemergency ED visits, such as the recent controversy related to Anthem, is causing some patients to consumer-price shop and evaluate alternatives before visiting the ED.
According to America’s Health Insurance Plans (AHIP), enrollment in HDHP and health savings accounts reached 21 million members in 2017, a 9.2% increase over 2016. The CDC claims that more than 40% of American adults are enrolled in a HDHP, and that these options are expected to see continued growth in the near future.
In addition to having to pay more out of pocket before hitting their deductible, patients are also concerned over whether or not their insurance plan will even cover their bill at all. Consider the recent controversy with Anthem, who has stated they may retroactively deny ED payments based on an individual’s final diagnosis.
THE GROWTH IN ALTERNATIVE SITES OF CARE
As patients look for alternatives to the emergency department, points of care are shifting from inpatient to outpatient locations.
According to the Urgent Care Association’s 2017 Benchmarking Report Summary, the number of urgent care centers has increased over the past several years, as illustrated below.
In addition to urgent care centers, the number of retail clinics has also experienced significant growth over this same time frame. The website Statista reports an increase from 200 sites in 2008 to a projected 2,800 sites today, and growth is projected to continue.
Not only are the number of alternative care sites increasing, but patient volume per site has been increasing as well, with 96% of urgent care operators reporting patient visit increases from 2014 through present. Kalorama Information, a healthcare research publisher that routinely reports on the urgent care center market, states that urgent care patient volumes are projected to continue to expand through 2021.
ASSESSING YOUR OWN SITUATION
While many believe the shift to alternative sites of care may be good for healthcare overall, ED patient volume declines in the short term represent lost revenue to hospitals. This is compounded by the fact that the ED accounts for more than one-half of all hospital admissions.
It is important to note that these are broad trends that may not be applicable to all hospitals, as some EDs have been reporting patient volume increases. But for those that are experiencing declines, different reasons may be applicable from one hospital to the next, even within the same system or geographic market, so it is critical for your leadership team to identify potential causes and outline a strategy to stop, or at least slow, further declines. Some factors to consider:
- Has your overall community seen a decline in population or a demographic shift?
- Have your hospital and local payers been actively educating your market on alternatives to the ED?
- Have large, local employers switched to HDHPs?
- Has there been an increase in urgent care centers, free-standing EDs, retail clinics and after-hours primary care options in your area, and/or more aggressive marketing of existing ones?
- Have you been losing volume to a competing hospital within or near your community?
DEVELOPING A STRATEGY
Based on your responses to the prior questions, each cause of volume decline requires its own strategy. If you have been losing volume to a competing hospital, you may want to conduct a deep dive analysis of your ED metrics, particularly:
- Usage of locum tenens providers
- Door-to-provider times
- Patients left without being seen/without treatment
- Throughput times, both admitted and discharged
- Clinical quality, including core measure performance and adherence to established clinical pathways
- Patient experience scores
If your ED is not performing optimally on these metrics, patients will go elsewhere, and you are putting your ED volume—and thus revenue—at risk.
It is difficult to predict where the ED volume trend is heading and how long the declines will last. Will we see an increase with the aging of the population over the coming decade as some healthcare analysts predict, or is this the “new normal?” Time will tell.