Money pit. Stepchild. Drain on the hospital. Loser of the health care system.
All those terms have been used about emergency departments more times than Rodney Dangerfield ever demanded respect. But worse than that, worse than having administrators who don't understand how EDs really work, worse than medical staff who treat emergency physicians like moonlighting residents is the distressing reality that emergency physicians believe their own bad press.
We have a longstanding culture of feeling bad about ourselves. We're the money pit. We're the losers of the entire health care system. The reason people are sick is because of emergency departments. The reason we pay taxes in the United States is because of emergency departments, said Peter Viccellio, MD, a professor of emergency medicine and the vice chairman and the clinical director of emergency medicine at the State University of New York at Stony Brook.
Not only should we be a player at the table and a seat at the medical board, but we should be the tail that wags the dog. We are the gold mine of the institution. - Dr. Peter Viccellio
The hurricanes in Florida were also caused by emergency departments, he joked during his lecture at the recent American College of Emergency Physicians' Scientific Assembly in San Francisco. We've done the beggars' excuses for years and years. It's EMTALA. It's the safety net. We reach out and take in the huddled masses yearning to be poor, and it has left us the stepchild of medicine.
But that self-fulfilling prophecy can be turned inside out as fast as you can say contribution margin, Dr. Viccellio said, by understanding how administrators view the ED, how accounting crunches numbers, and how the ED is really what attracts patients to the hospital.
In many hospitals, emergency medicine is the last area to be considered because administration doesn't have the information it needs to believe the ED deserves better. After Stony Brook began moving ED patients to unit hallways, not everyone at the hospital believed money was being saved. Even though data showed that length of stay decreased from six days to five days, it took an editorial that Dr. Viccellio wrote for Emergency Medicine News to convince the administration that the plan was working. Being in print had this magical reaction, he said. The take-home lesson: Produce data to make your point.
The ED as Gold Mine
The simple truth is, Dr. Viccellio said, that every ED is a gold mine, and it's up to emergency physicians to make sure everyone in the hospital knows that. We're at the point where we can pre-empt the system. We can become leaders where we were the stepchildren, he said.
Consider this anecdote from Dr. Viccellio. His emergency department sees 75,000 patients with no space to see them in, and they stay in ED so long that if you get back a negative pregnancy test, you have to test it again, he said. They see 45 to 50 children a day in the ED, either lacerations, orthopedics, or the sickest kids. In the hospital's pediatric urgent care center, an attending, three residents, and a nurse see 20 to 25 patients over a 12- to 14-hour day.
The hospital wants to close the urgent care center so they don't have to staff it anymore, Dr. Viccellio said, so the head of pediatrics demands a pediatric ED and wants to take over some of the ED. The ED can't add space, but agrees to take the nurse, one resident, and 20 insured children. And the reimbursement to the institution is going to be higher because this is now an emergency department visit instead of a peds urgent care visit. So now is this making money or losing money?
Dr. Viccellio figured that moving the patients to the ED would cost $1.6 million, and creating a separate ED would cost $2.8 million, but finance came up with a figure firmly in the red. This is with moving 20 children a day, insured, one nurse already paid for, one resident already paid for, nothing else. No new electricity, no new administrator, no new administrative wing, not even memos and luncheons about the memos to come up with. [Finance came up with] an almost $10 million loss. Nobody questioned any of this stuff. Does it really cost $10 million to look at a kid with an earache?
EPs have to stop believing their own bad press
The answer lies in understanding fixed and variable costs, Dr. Viccellio said. Fixed costs cover building maintenance, electricity, administrators. None of that is going away whether you see three or three million patients. You offset it by volume. You have to see 100 patients instead of 10. Each of those patients contributes to the fixed cost, he said. But the variable costs increase - that's the cost for more staff, more equipment, more drugs - and the trick is making sure that what is paid for care is greater than the variable cost. That, Dr. Viccellio said, is the magical contribution margin.
Although his hospital said the ED loses $43 million a year, finance said the ED's contribution margin is $53 million. Now that is an argument that not only should we be a player at the table and a seat at the medical board, but we should be the tail that wags the dog. We are the gold mine of the institution. Our CEO knows that. When our hospital occupancy goes down, he doesn't go talk to the private docs to bring in more admissions, he comes down and talks to us.
Increasing Admissions
Still doubtful? Consider that although admission revenue varies from state to state and from insurer to insurer, hospitals gain from $700 to $5,000 from each admission. If the average is about $2,000 or $3,000, he said, increasing admissions by one a day benefits the hospital by $1 million a year, Dr. Viccellio said.
Although primary arguments should still be made about patient care and safety, it's important to remind everyone at the table about the ED's contribution margin and the financial consequences of losing admissions. Going on a diversion for a few hours a day may pass unnoticed unless you say to your CEO that you lose four or five admissions, which is $5 to 8 million on your contribution margin, he said.
You have to force people to give you data, and you have to call them in a public place if they are talking loose talk and it's not supported. Making other people work, and I told this to the old chair of cardiology many times: You are welcome to be my harshest critic, but you have to do it with data, Dr. Viccellio said.
Finally, emergency physicians have to overcome their natural desire to want to fix every problem. We need to learn to start saying 'we can't,' but frame it in such a way that it doesn't reflect poorly on you.
© 2004 Lippincott Williams & Wilkins, Inc.