Monday, May 19, 2014

More on ERs
The economics of hospital Emergency Rooms continues to be a puzzle.
The May 14 issue of The Boston Globe reports that Steward, a large for-profit hospital chain operating in Southeastern Massachusetts, has entered into an affiliation with AFC Doctors Express, a growing urgent care provider with nine clinics in the area served by Steward.
The story under the byline of Robert Wiseman pointed out that a patient who ran up a $2000 bill in an emergency room could perhaps be treated in a Doctors Express clinic for $200.
The story did not go on to mention that if the affiliation resulted in a patient transferring from the high to the low cost facility, and if nothing else changed, Steward would lose financially.  If it is was a fee-for-service patient, Steward would lose more income than it would save in cost.  If the patient were financed by capitation, the amount paid for the urgent care visit would be more than the amount saved. 
Steward being a for-profit enterprise funded by clever venture capitalists, I suspect it understands the economics of all this very well and that what it is after from Doctors Express is a new batch of patients, enough of whom will also use its ER to offset any such loss.
Discussing the reasons for the affiliation, Dr. Ralph de la Torre, CEO of Steward, was quoted as saying “We need to get some of these visits out of emergency rooms and into urgent care centers, which are far more convenient and a less stressful environment for patients.”
He didn’t mention any cost savings, leaving discussion of the economic puzzle to reporter Wiseman

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