General Question

JLeslie's avatar

I am interested to know which departments in full service hospitals are very profitable, and which struggle or are a loss?

Asked by JLeslie (60811points) July 5th, 2009

I am thinking about this, because I don’t understand why a sprain on a Saturday at an emergency room costs $700 to treat, but at an urgent care facility is $150. The overhead of the ER and the overhead of the urgent care is not that different is it? Made me wonder if the hospital uses the ER as a huge profit center to carry other parts of the hospital?

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7 Answers

kevbo's avatar

Actually, ERs lose money. Heart programs, women’s programs (childbirth), and surgeries make money. Generally, “proceduralists” (such as surgeons, gastroenterologists, etc.) make money because of the way Medicare billing is set up. It’s more easily quantifiable to bill for a discrete procedure than for treatment of pneumonia. In the case of pneumonia, for example, Medicare pays based on “average” time/resources needed to provide treatment. If the patient stays sicker longer, then the hospital eats the cost (unless they can invent another diagnosis to bill for).

I’m not sure exactly what the economics of an ER are, but you have to remember that they get flooded with drunks, homeless, psychotics, and people who aren’t looped well enough into the healthcare system to seek preventive care and consequently use the ER for everything from an earache to the flu. They are forbidden by law to refuse care to anyone and probably eat a lot of costs dealing with non-emergent conditions.

JLeslie's avatar

@keybo thank you very much for your response. So the high ER bills probably are compensating for the people who are paying nothing or next to nothing for the services from what I gather. I am assuming each department in the horpital is responsible for its own P&L, it is not just looked at as the hospital in its entirety.

You also demonstrate why doctors and hospitals like to do procedures, that is rather upsetting.

funkdaddy's avatar

My wife works in an ER that’s located close to downtown, as Kevbo mentions they deal with more everyday medical care than true emergencies, injuries, and sickness. Also, if I remember correctly, 15% of patients at her facility pay their bill, which includes those with insurance. So for every 7 people you see there, one will pay. That’s astounding to me. An urgent care clinic, as a business, has the right to refuse service, the ER doesn’t have that option and so unfortunately the only variable is the price they charge. The $700 bill you received probably reflects the realities that you’re actually being asked to pay for several visits that day and the fact that if they bill your insurance instead the rates are locked in and they probably will only receive the same $150 you would pay at an urgent care clinic. They’ll probably be happy to get it.

The few unfortunate folks who are a) uninsured and b) willing and able to pay end up being the only ones paying the full price on the bill it seems. This is why so many people say the healthcare system as it stands is broken. These are generally people who can just barely afford to pay the bill and go into debt to do so. Those wealthier are insured, those poorer simply cannot pay. I’m sorry if you fall in this category, I did for most of my adult life until my wife got insurance.

From talking to several employees in the ER almost all believe care should be provided to anyone with an emergency but feel there has to be a better solution for those seeking standard medical care. Thinking you may be pregnant (with no other complications) does not require an emergency room visit, it takes a trip to the dollar store for a pregnancy test. Not wanting to go to work on Monday is not a reason to visit the ER Sunday night to get a note for work. To avoid being sued, once you’re there, they have to do a full workup, so that $1 pregnancy test is suddenly a $700 ER visit. The note for work gets you a $900 bill and some antibiotics. This doesn’t address the homeless who are simply looking for a warm/cool spot, a sandwich, and someone to look at them as a human being for a few hours.

As an example, her ER has stopped letting the family know the sex of the baby during ultrasounds as a policy. They had dozens of families coming in (to the emergency room) every week for ultrasounds simply to find out whether it was a boy or a girl. It’s a horrible policy that was forced by the economics in the ER.

All of this goes along with the fact that the ER requires a good percentage of workers who are a) very educated (doctors, nurses, techs) and b) in demand (doctors and nurses generally pick between several facilities) so they have to be compensated as such. If you add more doctors or nurses to handle the patient load, reduce wait times, and provide better service, you do so at a considerable expense and those dollars have to come from somewhere.

I don’t know enough about how the hospital works to say for sure, but just from those facts, I’d say the rest of the hospital subsidizes the services provided to the community by the ER. As Kevbo pointed out, financially they’d rather do surgeries, rehab and daily patient care.

Some things to consider as the US takes another look at universal health care, which is far from perfect, but deserves some attention.

JLeslie's avatar

@funkdaddy I have another question going right now about socialized medicine (SM), which I am in favor. One complaint by people against SM is they don’t want to pay for other people, but I was thinking we already do. My other reason is because I have personal experience with being denied and fighting until I feel like I want to go to the mental ward with insurance companies over ridiculous s&!t.

Do you think if everyone had access to medical care fewer people would use the emergency room for these stupid reasons? I question it actually, because if doctors don’t work on the weekends and someone “needs” or wants to go to the doctor on the weekend, a certain percent will still be going to the ER.

funkdaddy's avatar

@JLeslie – I saw the other question after responding here, some great responses, thanks for starting the topic.

My hope (perhaps unrealistic) would be that with universal healthcare in place, clinics serving neighborhoods would become viable again and could be a successful and maybe even attractive alternative to the ER. You’d be taking away the biggest obstacle which is uninsured patients who are unable to pay. With a clinic serving the area, an ER visit becomes unnecessary except in cases where greater resources are needed or perhaps at odd hours, so it can go back to serving emergency situations and providing expertise when needed. There’s also a greater chance people will have access to preventative and diagnostic medicine and actually utilize those services.

I don’t think anyone in the ER minds being a catchall to care for those who need it when other options aren’t available (nights, weekends, out of town, whatever), but their goal when a patient comes in is to make sure they aren’t going to get worse and stabilize them. That differs quite a bit from a general care doctor’s goal of long-term health and well being.

The current system is like if only remedial classes were free in public education. All of a sudden everyone is using the remedial system to fill in and wondering why students aren’t learning.

JLeslie's avatar

@funkdaddy if I am living check to check and work M-F, I understand why I would want to go to the doctor on Saturday or Sunday. From the pt’s point of view it seems crazy that I can go to Macy’s and buy a dress on Saturday, but if I am sick I cannot get care. From the doctors point of view I guess they feel like they are well educated professionals who are not going to give up their weekends, and they would need other staff members too on the weekend. But, if there was a doc in town with weekend hours I bet he would be popular.

walterallenhaxton's avatar

I don’t know. For your urgent care facility you need one general practitioner. and a receptionist and a nurse. For an ER you need enough doctors to cover most things that come in. That is hard to organize and the doctors can charge more for it. Specialists do.
Also they might be charging more for things that can wait to screen those out. The do get in the way of their primary job.
At least that is how a business would ration scarce resources. Who know what a socialist/business/government partnership would do to ration it’s resources.
Remember. I said I do not know. I bet if you ask them they will not be able to tell you either.

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