Code Blue.

How managed care is putting emergency care into shock

Most Americans take it for granted that if they have a heart attack or get in an accident, highly qualified help in an emergency room is but a short drive away. Don't believe it. Growing numbers of hospitals around the country--and their emergency departments--are shutting their doors due to financial pressures. Those that remain are reducing emergency services by pooling their resources with other hospitals or simply by cutting quality.

Emergency departments are the bulwark of the country's health care system. Not only are they the first line of defense when there are actual emergencies, such as plant explosions, airline disasters, and the like, but they are also critical in saving more routine heart attack and auto accident victims. Emergency physicians say that patients such as these need to be seen in the so-called "golden hour" immediately after the onset of their problem or risk irreparable harm. Emergency departments also serve as the primary health care provider to tens of millions of poor and uninsured Americans who lack the means to access more conventional settings like doctors' offices.

But such a safety net doesn't come without a price. Emergency departments must maintain high levels of readiness 24 hours a day, seven days a week, by employing skilled teams of physicians, nurses, administrators and other highly trained staff, and by keeping up with the latest life-saving technology. While surgical and other hospital departments are equally or more expensive to maintain, they enjoy well-insured patients who can pay their bills. Emergency departments, by contrast, are perennial money losers because their patients often cannot.

Until the 1990s, insurance companies and their employer clients were willing to shell out to support emergency departments and pricey healthcare in general. But that changed with the rise of managed care, a euphemism for rationing. Employers, stunned by double-digit premium increases, answered the siren call of managed care organizations, including HMOs and preferred provider organizations, which promised negligible rate increases. Today, about 85 percent of all employees with health insurance are in some sort of managed care plan.

For much of the mid-to-late 1990s, HMOs delivered on their claims by negotiating steep discounts with hospitals, doctors, and other health care providers. HMOs also delivered by limiting--sometimes harshly--access to and time spent in hospitals. In May, for example, the New York state attorney general's office said it was investigating some managed care plans for allegedly telling patients and doctors that patients must first get approval from their primary care doctor to be covered for an emergency room visit. New York, like many other states, passed legislation that requires health plans to provide coverage of emergency room visits for people who have symptoms that a prudent layperson would consider an emergency. This investigation jibes with a study that surveyed academic departments of emergency medicine across the country. Thirty-seven percent of the respondents reported that HMOs routinely discouraged their enrollees from using 911 services, and 16 percent reported that HMOs provided 911 services to take patients only to participating hospital emergency departments.

Hospitals that couldn't or wouldn't find ways to make up for the shortfall in revenue caused by managed care's hardball tactics closed their doors. Between 1995 and 1996, 180 medical-surgical hospitals with licensed emergency services disappeared, according to the American Hospital Association (significantly more than the 141 closings in 1994-1995).

Those that remained open scrutinized expenses and focused on the biggest ways to get rid of money-losing services. Not surprisingly, emergency services were at the top of the list. Hospitals merged emergency services with those of affiliated or nearby hospitals, reduced staffing levels, substituted less qualified employees for those more qualified, and took other measures. The result is that getting emergency services is harder than ever.

"One of the big concerns of these consolidations of hospital systems and closure of beds is that those that remain may not be able to provide the [emergency] care needed," said Dr. Francis L. Counselman, chairman of the department of emergency medicine at Eastern Virginia Medical School in Norfolk, Va. "People just go to another [emergency] department, which puts ... incredible strain on the remaining hospitals"

Patients pay the price of that strain most visibly, Counselman said, through increased wait times and possibly through tardy intervention. "Instead of an hour and a half wait, it's going to be a two and a half hour wait or a three hour wait. Then the concern is that there's somebody out there [in the waiting room] who can't wait that length of time, like someone with abdominal pain that ends up being an ectopic pregnancy," a dangerous condition.

The situation is most acute in areas where managed care has made the greatest inroads. Take the Bay Area around San Francisco. In early 1997, a series of patient deaths in emergency rooms was attributed to inadequate nurse staffing, inexplicable delays in transport, lack of doctors on call, and nonexistent quality assurance, as reported in Modern Healthcare. For example, on Feb. 12, 1997 Willa Hives, a resident of Vallejo, Calif. drove to Kaiser Permanente's hospital in Richmond, Calif. only to learn that its emergency room wasn't staffed to treat her condition--chest pain--because it was a "standby" emergency room and not a full-scale emergency room. Kaiser's larger Oakland hospital had no beds available, so Hives was taken to Summit Medical Center in Oakland. She was dead on arrival.

And in affluent Marin County in September 1997, an auto accident victim had to be taken to three hospitals to find an ER properly staffed to care for her. She died after surgery at the third.

These and other incidents prompted the state's Emergency Medical Services Authority to conclude in a draft report that California's emergency systems and hospitals don't have enough capacity to handle catastrophes--no slight possibility in an area prone to earthquakes, forest fires, and freeway accidents.

Such problems are directly attributable to falling emergency capacity in the state. Between 1995 and 1996 coverage in terms of emergency department hours dropped 10.4 percent, and 12 emergency departments closed (2.8 percent of the state total), according to a study headed by Dr. A. Antoine Kazzi, an associate professor of medicine in the division of emergency medicine at the University of California at Irvine.

While coverage is down, doctors are being forced to do more at the same time, including filling out reams of paperwork to satisfy managed care companies and seeing about 5 percent more patients per hour than a few years ago, which could hurt their ability to spot problems, Kazzi said.

Not surprisingly, some legislators in California are incensed. A bill that would have given county governments the right to restrict the closure or reduction of emergency care services failed to pass the California Assembly by one vote on June 3, after intense lobbying against the measure by California hospitals.

But it's not clear that this kind of regulation will work even if the bill is brought up again and passed. The real issue is funding. Managed care won't put up with subsidizing money-losing emergency rooms and Medicare, the other major hospital payer, has stated loudly and clearly that the days of hefty reimbursement rate increases are over. So hospitals, even if regulated, will have no other choice but to cut corners if they want to remain viable. More than likely, legislators at the state and national level will ignore the issue until a full scale emergency wreaks havoc, exposing the lack of emergency capacity. Only then will they have the gumption to consider funding an essential service.

Howard Isenstein is a freelance writer based in Bethesda, MD. He writes extensively on healthcare.