WHEN IT COMES to financial health, the hospital emergency department has sustained major trauma from the economy.

The ED is at great risk for hemorrhaging revenues due to various factors, including heavy over-utilization as an intake point, massive influx of uninsured and under-insured patients and lack of consistent, efficient workflow processes.

Because the ED is the nerve center of the hospital, financial specialists say getting its operations under control should have positive effects on other departments throughout the organization.

Renee Sharp, RN, peer consulting manager for IMA Consulting in Chadds Ford, Pa., says the ED is greatly overburdened by too many people who use it as a primary access point to care, unnecessarily tying up valuable resources for routine conditions that could be treated in a physician clinic.

“Probably less than 20 percent of all ED cases are true emergencies,” she said. “Many could wait to see their primary care physicians, but because so many uninsured don’t have them, they see the ED as their only available option.”

Though anyone seeking care in the ED cannot be refused medical attention, patients who are inevitably referred elsewhere for treatment are still a significant drain on the department because they have to be evaluated, diagnosed and determined to be non-emergency cases, Sharp said. As a way to expedite that process, she said some hospitals have set up ED radiology and lab equipment in order to get faster test results.

“It certainly saves the time of sending tests to the lab and waiting for the results, but it’s a costly option,” she said. “As long as the economy continues as it is, the cost is going to stay high.”

While a surplus of patients is at the root of the ED’s challenges, proper patient management is the key to its potential prosperity, Sharp insists. As a peer consultant, hospitals bring her in to establish patient tracking methodologies that result in greater efficiencies.

“It begins by ensuring that each patient is followed through the entire encounter, starting at intake through to testing, disposition, inpatient admission or discharge,” she said. “Patients must be moved through in a timely manner – that is the only way to influence costs. We redesign processes, look at areas that delay moving the patient from one area to the next and come up with a teamwork approach that makes the department more efficient.”

The basic formula for more efficient processes is benchmark data that establishes best practices for various procedures, taking into account the work environment, culture and staff, Sharp said.

Once the ED gets a handle on its operations, she said it has a positive effect on other areas of the hospital.
“The ED touches virtually every other area of the hospital, including lab, radiology, housekeeping, pharmacy, administration and security,” Sharp said.

Striving for consistency
While the problem with ED over-reliance is well documented, its cost impact may also be over-inflated, contends Jeff Wadja, vice president of clinical services for LYNX Medical Systems in Bellevue, Wash.

“No question utilization is higher, but if you look at numbers from the Department of Health and Human Services, ED charges alone only represent between 4 and 5 percent of the healthcare dollar,” he said. “That’s a pretty small piece on the outpatient side. Still, there’s no question that if you take a place with unscheduled care and overwhelm it, you will have downstream effects, much of it negative.”

The ED, Wadja said, is a microcosm for healthcare’s overall financial ills. He thinks that focusing on quality is the cure.

“When you see an ED leak revenue, you know it’s an issue closely related to quality,” he said. “We believe that revenue and quality go hand-in-hand. When you pay attention to one, you must pay attention to the other.”
Care patterns are paramount in efficient healthcare, Wadja said. He identifies variability and a lack of consistency as the main obstacles.

“Of our 500-plus hospital clients, many are large integrated delivery networks that have anywhere from 15 to 40 hospitals,” he said. “They all have problems to some degree with consistency, especially when it comes to coding and charging.”

While working with the chief technology officer and CFO of a large East Coast IDN, Wadja discovered that the health system’s 20 hospitals had their own coding and charging methodologies. These redundancies added up to $10 million in lost revenues from inappropriate use of resources.

“We built algorithims that are simple and mathematically based to show them how to be consistent and predictable in how they apply their charges,” he said. “Now they are getting paid for all the services they provide.”