Today, I am speaking with the one, the only Al Lewis, and we’re gonna talk about how 6% of a lot of plan sponsors’ total spend is now going to ER/ED (emergency room/emergency department) visits. That’s a lot of spend.
For a full transcript of this episode, click here.
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Al digs into this, so I’m just going to gloss over it all and make my own points or two along the way, I am sure here, as the intro.
But the reason why ERs are costing so much these days is, number one, because ER volume nationwide is, in fact, trending up (ie, more patients are going to the ER). We had a pandemic in the mix, so it’s a little sketchy to track, but yeah, the volume of ER visits per capita seems to be increasing—and it’s increasing faster than the population.
And number two reason, at the same time, the average cost per visit is going up. So there’s a bunch of things that I’m gonna say today where if you want to dig in on them, check out the stats here. But volume is going up. Also, the price per visit is going up. Let’s linger a little here on the price per visit part of the equation.
The average cost per visit went up 15% in 2023, which is something that Al brings up in the conversation that follows in a little bit greater depth. Now, in the context of ER visits becoming more expensive, here’s a common question that gets posed.
Is this increased cost because (A) ER visits are being upcoded, or (B) are patients showing up in the ER actually sicker?
Now I do realize that is an either-or, and most of us listening today and also many who pose this question and certainly Al Lewis are fully aware that there is other stuff going on. But let’s just keep it simple with this either-or binary before we make it more complicated. So, are ER visits being upcoded, or are patients sicker?
There is a right answer to that question, by the way, although not everyone wants to hear it. So, let us begin with it is a verifiable fact that visits are being coded at higher acuities than in the past. And the higher the coding acuity, the more the ER visit is going to cost, just to state the obvious. That’s why there is a financial reason to upcode—because the higher codes have higher associated prices.
Brian Cotter on LinkedIn the other day cites an ER coding analysis, and Al Lewis sent me a KFF (Kaiser Family Foundation) slide basically showing the same thing. ER visits are being coded at higher acuity. But it all boils down to, as Brian put it in that LinkedIn post, a notable shift toward higher-intensity coding in physician billing.
So, codes are upped, but are the patients actually sicker, thus warranting the higher acuity codes? Again, is there an increase in actual patient acuity, or is it just a change in coding practices jacking the codes up to higher severity levels?
Let me leave you on the edge of your seat just a moment here while I tick through some of the proposed answers to this question whether patients are sicker, thus requiring higher levels of coding acuity. You will certainly get some folks, very, very definitely, with three underlines, talking about their premise that urgent care has siphoned off most of the low-acuity cases that were going to ERs in the past, which has left hospital ERs with higher-acuity cases.
So, there is certainly a crew who is firmly in the “yes, patients are actually sicker” camp. Is this actually true, as per the data, that sicker patients are showing up in the ER? Well … no, not that I could find. And if you have stats showing otherwise, certainly send them over.
I did, however, find a KFF Health News examination of physician upcoding, which found that minor procedures such as removing a splinter or treating a wart are increasingly being billed as surgery, costing hundreds of dollars. Then I asked Al Lewis whether there’s evidence of higher-acuity patients showing up because urgent cares are dealing with the easy stuff. And he wrote me back with references.
He said if visits were actually higher acuity, then you would see a commensurate increase in hospital admissions aligned with that acuity. If, on the other hand, upcoding was the cause of more level 4 and level 5 visits, like the KFF Health News examination revealed, then you would see a reduction in admissions to the hospital from those codes.
And that is apparently what happened quite dramatically in California, where it was actually studied. Check out the study, showing way lower hospital admissions from the way higher acuity codes. So, yeah … upcoding.
And number two reason ERs are costing so much these days: Also, again, ER volume nationwide is in fact trending up.
And a third issue that Al talks about for ER total spend becoming more expensive is just, it’s really, really difficult for plan sponsors to negotiate for ER services. They are emergencies. Nobody can navigate.
A fourth factor that Al Lewis talks about in the show that follows is some shifts in what has been going on for in-network patients since the No Surprises Act. And again, we take that up in the conversation that follows.
So, four factors underpinning the rise in emergency room spend, but there’s kind of an underlying dynamic here that I want to bring up—and it’s kind of interwoven through a lot of the conversation.
I want to quote John Lee, MD, who is, in fact, an emergency room physician. When I gave him kind of the run of show on this episode, Dr. John Lee said to me:
“Here’s an anecdote from today. I just saw a young patient with abdominal pain. She has had symptoms on and off for months and has had little progress getting any attention from her primary physician.
“I could theoretically do some screening and labs and then have her scheduled for an office recheck tomorrow. But I had zero faith that she will actually get in to the office in follow-up. Also, even if she did and something bad happened, like appendicitis, in the interval time period, you know, we physicians are paranoid.
“So, instead, we do the CT scan, we do the lab work, and when nudged by some marginal other lab results, we did an ultrasound. We got through weeks’ worth of workup and bypassed prior auth in one afternoon. Multiply this same thought process many, many times over. I actually saw three patients who would fit in this general bucket today. That phenomenon is common. You can see where the explosion of acuity and visit volume comes from.”
This echoes, by the way, what Mick Connors, MD, wrote on LinkedIn the other day. He wrote, “The fact is, primary care has so few resources these days, not much can be offered. There’s no X-ray, lab, procedures, RNs, mental health, etc. And more fees for quicker services and no penalty for sending everyone to the ER. So, it’s all built into the fee-for-service system.”
And you see that in the data, everything above. There’s loads of it that corroborates that differences in healthcare access, principally primary care access, is a huge determinant of the volume and the average price of ER visits.
It’s a little bit ironic that the bigger driver, it seems, is the lack of urgent care and primary care that’s driving ER trends, not their existence.
Al Lewis gives advice for what plan sponsors can do about these rising ER charges in the show that follows. You’re going to want to listen to him explain them, but the first is help your employees who are trying to sue a hospital for egregious charges.
You both are on the same side here. So that’s number one. Secondly, educate members about consent forms. And we talked about this one at length in the earlier show with Al (EP386), so do go back and listen to that if consent forms, even just that language, is unfamiliar to you. Then lastly, be proactive about these rates that you may get charged as a plan.
And Al has a bunch of advice here (again, towards the end of the show) on how to do that.
So, here’s my conversation with Al Lewis, who is CEO and founder and “quizmaster in chief” over at Quizzify. Contact him, for sure, for more on any of this. He says every time he makes an appearance on Relentless Health Value, lots of people call him—so, you won’t be the only one.
Also mentioned in this episode are Brian Cotter; John Lee, MD; Mick Connors, MD; Quizzify; Rob Andrews; and Vivian Ho, PhD.
You can learn more at quizzify.com and by emailing al@quizzify.com. You can also follow Al on LinkedIn.
Al Lewis wears multiple hats, both professionally and also to cover his bald spot.
Hat #1: Employee Health Literacy. He is the founder and “quizmeister-in-chief” of Quizzify, whose mission is to help companies teach their employees to utilize health care services appropriately, using a format best described as “Jeopardy meets Choosing Wisely meets Comedy Central.” Quizzify is the only vendor authorized to display the Harvard Medical School “Veritas” shield and has received excellent reviews from users.
Quizzify is also well known for its ER Sticker Shock Prevent Consent, which has been endorsed by Dr. Marty Makary and Dave Chase, among others. It can be taped to an insurance card, used as a stand-alone card, or downloaded into your Apple or Google Wallet and will “pop up” when you enter an ER. It limits ER bills (both in- and out-of-network) to 2x Medicare, which is less than half of most “negotiated” rates.
His quiz-specific background includes authorship of the best-selling Newsweek Presents the Ultimate Trivia Game, which Games magazine lauded as having the best questions of any trivia game; hosting two quiz shows on Boston network affiliates; and appearing on Jeopardy.
Hat #2: Outcomes Measurement. As an author, his critically acclaimed category best-selling book on outcomes measurement, Why Nobody Believes the Numbers, chronicling and exposing the innumeracy of the health management field, was named digital health book of the year in Forbes. Cracking Health Costs, written in conjunction with Walmart alum Tom Emerick, was also a trade best seller.
He was the co-founder of the World Health Care Congress’s Validation Institute.
His expertise in outcomes measurement got him named one of the unsung heroes changing healthcare forever.
He graduated Phi Beta Kappa with honors from Harvard, where he taught economics as well. He also graduated from Harvard Law School, albeit with no honors that time—other than winning their annual trivia contest, of course.
08:32 What is going on in ER visits, and how big of a deal is the total spend?
10:16 Why is the price of ER visits going up when it should be going down?
11:59 What is the major source of unexpected medical debt?
13:27 What is code creep, and why is it happening?
16:26 Why are plan sponsors unable to negotiate emergency room services?
25:53 Why is it important not to agree to consent when you go in to visit the ER?
31:28 What steps can plan sponsors take to be proactive about limiting ER spending for their employees?
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