Healthcare’s Annals of Greed has a new batch of heroes: loophole prospectors. These modern-day diggers demonstrate the true-grit reminiscent of 19th-century prospectors. But today’s miners are digging, not into hills and canyons, but into the fine-print arcana of health care regulations. Their quest: loopholes that will tap into windfalls.
This modern-day quest begins with a lodestone of a loophole: the fine-print distinction between urgent care centers and emergency rooms. You may not glimpse the difference. Neither will the person with a broken arm, a 24-hour fever, or a burn. That patient will rush someplace where somebody will know what to do, quickly. Even if the patient has a “primary health care provider,” that provider is rarely available at night, on weekends, or on holidays when mishaps and acute illnesses happen. The distraught patient cannot wait until Monday, or the morning, to call for an appointment. Or at least the patient doesn’t think there is time. So s/he hurries to a place whose banner – urgent, or emergency – yells “instant help.” If the patient has insurance, the insurer pays most of the bill. Again, the patient doesn’t see the difference between “urgent” and “emergency” care.
These legal prospectors do. They have ferreted out the key distinction. Urgent care centers charge less than emergency rooms. Insurers follow through: they pay out less for the former than the latter. If you are an investor, why back urgent care centers? Why not emergency rooms?
Obviously there is a difference. Emergency rooms, in the traditional sense, are part of hospitals. The patient who enters with a genuine emergency may end up as an inpatient, attended by a slew of specialists, on-call twenty-four hours a day. But most patients in ERs do not end up admitted to hospitals.
So the notion of a freestanding emergency room, not embedded in a hospital, emerges. An “ER-lite.” Why not? A hospital chain can build a freestanding emergency room anywhere – though preferably near an upscale shopping center. (Since Medicaid and Medicare may balk at reimbursing these ER-lites, the best patients are those with private insurance.) The freestanding ER can serve as a feeder to the hospital, if patients need hospitalization, or need a specialist. As for the hospital, its ER may see a decrease in patients, a decrease in wait-times. And the hospital’s revenue will rise from these new patients. Many who would avoid the hospital-based ER, fearing a long wait in a crowded waiting room far from home, might visit a nearby ER-lite. Not surprisingly, the doctors who staff these facilities have often invested in them.
Nationally, there are 400 free-standing ERs. Houston is prospector-heaven: 41 free-standing ERs, with a few more under construction. (If you add to the mix the hospital-based ERs, the Houston area has 150 ERs.) These wunderspots are springing up in Florida and North Carolina as well. (“‘Wildfire’ Growth Of Freestanding ERs Raises Concerns About Cost,” by Phil Galewitz, Kaiser Health News, July 15, 2013).
The patient will see no difference between the urgent care enter – also convenient, also poised to take care of minor crises, also staffed with physicians, also with testing equipment – and the freestanding ER. The co-pay may not differ appreciably. Only the insurer suffers.
In time, of course, savvy regulators will close this loophole. Just as mines run dry and oil wells stop gushing, so too lucrative loopholes eventually close, especially when hordes of prospectors rush in. Eventually insurers may reimburse only ERs embedded in hospitals. But analysts espy a new vein: micro-hospitals. ERs with 10-12 beds attached may spring up, replacing urgent care centers, as well as the ER-lites. The micro-hospitals will prove more lucrative – until regulators shut down that mine-field.
One more chapter in the Annals of Greed.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email firstname.lastname@example.org.
From The Progressive Populist, September 1, 2013
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