contract management, health care costs
The COVID-19 epidemic thrust emergency physicians into the media spotlight, showing them saving countless lives from a highly contagious virus through front-line, hands-on care. Emergency physicians intubated infectious patients without hesitation moments before their last gasp for air, performed CPR on those who arrested in the emergency department, and spent hours fine-tuning IV drips to stabilize critically ill patients.
Countless other patients with traditional problems like undifferentiated chest pain, traumatic injuries, and critical illnesses rolled through the ambulance bay doors or walked into the ED lobby while we were caring for this new wave of patients.
Behind these headlines is the story of Wall Street-oriented businesses exploiting emergency physicians for outrageous profits. (American Academy of Emergency Medicine. 2019; https://bit.ly/3uguL9m.) Health care companies, including hospitals, contract management groups (CMGs), and others, need licensed physicians to make money. (EMN. 2021;43[9]:3; https://bit.ly/3yH554F.) Health care entities cannot bill health plans or patients without a physician’s signature for an order or a computer entry on the order page. To be blunt, the health care industrial complex cannot make a dime without a doctor order.
Physician fees billed during an average ED visit account for less than 10 percent of the total bill a patient receives; the other 90 percent of fees goes to the hospital. The physician too often receives only five percent of the total bill, with the other portion of the professional fee going to a CMG, usually a Wall Street stockholder, or a private equity-owned company.
Health care in America is expensive, costing our society nearly $4 trillion a year, the equivalent of $12,000 each year for every person; that’s $48,000 a year for a family of two adults and two children. (Corporatizing American Health Care: How We Lost Our Healthcare System. Baltimore: John Hopkins University Press, 2021: pp. 91-104.) Wall Street has noticed and is now intent on mining this gold, and physicians have become the mules delivering that gold to Wall Street private equity and shareholder corporations. Profits can be made from every order a physician signs or enters into the computer, from laboratory tests and imaging to procedures, supplies, and drugs. The largest cut of profits goes to hospitals.
Health care may have become all about profit in America, but this is not the case in Europe. Overall health care costs there are half of what we pay in the United States, and costs for ED care are only one-third of U.S. costs. We can attest from visiting professorships at European hospitals that ED care is equal to or better than American ED care. Yes, it is possible to provide superior emergency care for people and not make an abusive profit from their injuries and illnesses.
Emergency physicians provide care in a risky environment while the hospitals make enormous profits from the ED facility use fee. This fee can range from hundreds of dollars to $10,000 based on visit level, with level 5 reserved for severely ill and injured patients. Kaiser Health News reposted a facility use fee of $7000 for a brief visit by a man vomiting from a hangover. (NPR. Sept. 9, 2019; https://n.pr/3uik1Ht.) Does a patient get a discount for being treated in a crowded, noisy hallway rather than a private room? Not that we know.
Emergency physicians provide care in a risky environment while hospitals also make profits from surcharges that result from special designations such as trauma, heart, and stroke centers. Patients with these problems are usually brought to EDs by ambulances following established prehospital rules. The extra charge for a trauma activation can range from a few thousand dollars to $50,000. Emergency physicians who have attempted to dispute an inappropriate trauma alert have been reprimanded. (EMN. 2021;43[9]:5; https://bit.ly/3jF1sIa.)
Emergency physicians provide care in a risky environment while hospitals make profits from protocols. Highly educated and trained emergency physicians in the past would assess the patient’s problem and then determine the correct course of action, such as lab tests and x-rays. Hospitals now often require a physician to use a computerized order set that automatically orders multiple high-profit laboratory tests and unneeded high-radiation imaging. One of us (MB), for example, reviewed the case of a healthy man in his early 20s who presented with chest pain and was sent home with a prescription for ibuprofen. He received a bill for nearly $17,000 for an unneeded “protocol” workup that included multiple profit-making laboratory tests and imaging.
Hospitals also make money by ordering unnecessary documentation in inefficient computer systems. Physicians are told they must complete all pages in EHRs that are too often inefficient, sometimes requiring data entry of patient information having nothing to do with the visit, such as a sexual history for a person with a hand laceration. The motivation for hospitals: Providing extra data for third parties can result in additional revenue.
Don’t be fooled: Nonprofit hospitals are organized like for-profit hospitals. Nonprofits operate using a for-profit business model, but they do not pay most taxes and in return are supposed to funnel money to the community, which often is only a very small part of their operating expense. (Corporatizing American Health Care: How We Lost Our Healthcare System. Baltimore: John Hopkins University Press, 2021: pp. 91-104.) But prices for evaluation and treatment in the ED are often similar or even higher than for-profit hospitals. Nonprofits use their “profits” to pay large salaries and bonuses to senior executives, hide additional revenue as “reserves,” and use other accounting tricks.
Contract management groups also make money for business. A majority of hospitals now contract with corporate or private-equity groups to staff their EDs. CMGs are basically staffing companies that bill for physicians services, taking a big cut of the doctor’s fee for themselves. These groups have also been accused of falsely upcoding ED visits: the higher the visit level, the more money that can be billed. CMGs hire and fire emergency physicians. A physician who complains about safety issues could be a threat to a lucrative contract. Emergency physicians have been terminated without cause, and they may have to travel out of town to get another job if their employment agreement included a noncompete clause. (J Emergency Med. 2013;45[1]:111.)
We encourage emergency physicians to work together to remove the corporate yoke from our necks. We cannot continue to be a silent servant to corporate America. Ensure that patient care decisions are based in need, not driven by profit. Patients trust us to have their best interests first and foremost. Let’s not betray that trust. Report to the appropriate authorities any incentive you see forced on physicians to increase profit. Use anonymous reporting systems if needed, and keep records that include the time and date. Don’t fear retaliation: You could later be accused of not reporting patient abuse.
We encourage every emergency physician to learn the cost of everything ordered in the ED. What did that lab test cost? How much will be billed by the hospital for an IV infusion? How much is billed for CT scans, MRIs, and trauma activations? Work with your professional societies to reduce corporate dominance. Write articles about your experience in the ED and what you think is unjust. Be proactive on behalf of your patients, not the corporate entities that employ you.
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Dr. Derletis a professor and the chief emeritus in emergency medicine at the University of California, Davis. He founded the EM residency training program, and is the author of the book Corporatizing American Healthcare; How We Lost our Healthcare System. Dr. Bordenis an emergency physician in Washington State and the author of the book Medical Wisdom.