Kaiser Health News has become very good at reporting on the marketing secrets of the nation’s hospitals. I was intrigued by a story a couple weeks back by Phil Galewitz, which revealed that, increasingly, hospitals are making emergency-room patients pay upfront if they don’t have a true emergency. That means if you bring your screaming kid in for an ear infection or a sore throat, you might be asked to cough up a couple hundred bucks to see a doctor.
It’s all part of a trend, Galewitz reports, to keep people from using emergency rooms for the minor illnesses that can be treated more cheaply elsewhere—like the family doctor’s office, or an urgent care center. “It has been a successful part of helping to reduce crowding in emergency rooms and to encourage appropriate use of scarce resources,” explained Ed Fishbough, a spokesman for HCA, the biggest for-profit hospital chain around. Last year, almost 80,000 HCA emergency room patients walked away untreated rather than pay the $150 fee.
That quote jogged my memory of another Galewitz piece. Last summer he revealed another marketing practice used by HCA hospitals. They were using billboards and smartphones to tell potential ER customers—or patients—the average waiting times to be seen in the emergency department. That’s right: advertising for ER business. How did this square with HCA’s new policy of charging people for non-emergencies? How did that square with Fishbough’s quote about overcrowding and scarce resources?
Galewitz didn’t say, and an interesting story would have been a better one had he told us. Is the hospital chain luring patients to the ERs by hawking their shorter waiting times and then selecting out the ones who have don’t have an emergency after all, hoping enough of them will stay and pay the 150 bucks out of convenience? In 2011, according to Kaiser, about 230,000 patients (out of 314,000 who had no true emergency) paid the upfront asking price. Are HCA and other hospitals using the declining wait times—a function of sending away would-be patients—to get an edge on their competitors?
A vice president at Health Management Associates told Galewitz that the sixty-six hospitals in his system had seen a decline in wait times since they began charging upfront payments. “We think this is appropriate, given that some people use the ER in a way it was not intended: as a source for routine care,” he said. But competition over waiting times is bringing in patients for routine care, no? More dot connection, please! At a recent meeting of Academy Health, a Washington conference for health policy types, one hospital executive told the assembled “the way hospitals will grow will be to bring in more market share.” This all seems like another way to do that.
A consumer advocate made a brave attempt to finger the reason for the upfront fees. “It seems the point of the policy is to put a financial barrier between the patient and care,” he told Galewitz. Spoken like a true consumer advocate. That may be the result of the policy, but it’s doubtful that’s the hospital’s overall strategy. Galewitz did report what sounded like the hospitals’ PR line: “Hospital officials say the upfront payments are a response to mounting bad debt caused by the surge in uninsured and underinsured patients, and to lower reimbursements by some private and government insurers for patients who use the ER for routine care.” I get it. High deductibles and coinsurance are making it tough to pay hospitals, which have been complaining about that for a few years now. But using ER patients to make up for for lower reimbursements from payers is a new one. I thought the goal was for both government and insurers to pay less, to help bend that proverbial cost curve.
I wanted to know more, though, especially about HCA. Then I thought of another Galewitz story. This one was about hospitals, including HCA, that were mining their patient records to find customers who brought in the most revenue—that is, those who have the best-paying insurance. They’re trying to reel them in to their facilities for their most lucrative services such as cancer, heart, and orthopedic care. This gets back to the market share thing. Galewitz reported that these efforts had attracted higher-paying patients, including, in the words of one marketing exec, those covered by “profitable Blue Cross and less Medicare.” Does that mean rationing to Medicare patients? That’s another story, and another dot to connect.