Health Care Costs and Financing

Emergency department bills exceed payments over 9-year period

Average emergency department (ED) charges per visit nearly doubled from 1996 to 2004. While payments for those visits also increased, they did not keep pace with charges, a new study finds. Researchers analyzed ED data from the Medical Expenditure Panel Survey-Household Component, which provides data on health care use and spending from a nationally representative sample of the United States. They found that average ED charges increased from $713 in 1996 to $1,390 in 2004. Average payments for those emergency visits grew as well, from $410 in 1996 to $592 in 2004. Despite the increases, the overall proportion of charges to payments ebbed from 57 percent in 1996 to 42 percent in 2004.

The Emergency Medical Labor and Treatment Act of 1986 requires emergency departments to treat all comers, regardless of their ability to pay. This study showed that many hospitals are not being fully reimbursed for the care they provide. While patients with private insurance typically paid 56 percent of their charges in 2004, those insured by Medicaid paid just a third of their total bill and uninsured patients paid 35 percent of their fee. One State has seen 12 percent of its EDs close (though the number of beds rose by 16 percent), a decision the authors surmise may have been partly related to financial concerns.

The authors suggest that charges jumped for several reasons, including escalating costs of providing care due to higher salaries for nurses and use of expensive technologies that aid in diagnosis and treatment. One concern is that hospitals may resort to inflating charges in order to receive a reasonable reimbursement because insurers have greatly limited the amount they will pay. This practice will inevitably do most harm to the uninsured, who will face even higher charges for ED care. This study was funded in part by the Agency for Healthcare Research and Quality (HS13920).

See "Decreasing reimbursements for outpatient emergency department visits across payer groups from 1996 to 2004," by Renee Y. Hsia, M.D., M.Sc., Donna MacIsaac, M.S., and Laurence C. Baker, Ph.D., in the March 2008 Annals of Emergency Medicine 51(3), pp. 265-274 and pp. 274e1-274-e5.

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