How a Fire Department Funding Model Could Preserve Rural Emergency Services and Quality Emergency Care

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Nearly 60 million rural Americans depend on local hospitals and their emergency departments (EDs) for serious (eg, trauma, stroke, heart attack) and potential (eg, chest pain or abdominal). Yet since 2010, 136 small rural hospitals have closed. The COVID-19 pandemic has accelerated this trend, with a record 20 new hospital closures in 2020 and many more at risk. Mortality worsens when hospitals close due to reduced access to lifesaving skills for emergency doctors and the hospitals where they work.

Recent policy initiatives have attempted to address rural hospital closures. Some rural hospitals in Pennsylvania and all hospitals in Maryland are funded by block budgets. Starting January 2023, a new Rural Emergency Hospital (REH) designation will allow rural critical access hospitals to convert to REH and receive fixed payments to support infrastructure and a 5% increase in payments to act in exchange for the maintenance of an emergency service. and specified outpatient services. A weakness of these models is that they focus solely on supporting the hospital setting. None guarantee sufficient resources to pay the on-site emergency physician 24/7/365, as well as some level of surge capacity, necessary to provide patient care at the facility. ’emergency.

To understand why rural hospitals and small hospitals struggle to retain high quality emergency physicians in their emergency departments, it is important to describe the economics of emergency department staffing and how the COVID-19 pandemic has made this economy worse. Prior to the pandemic, a delicate balance between volume, complexity, and payor mix supported ER staffing with fee-for-service payments. Some visits were well reimbursed and required few resources (eg private insurance, low severity). For other visits (eg, Medicare, Medicaid, critical care, and uninsured), reimbursement did not cover costs. The expansion of Medicaid under the Affordable Care Act reduced uninsured visits, but was not a panacea. Medicaid expansion replaces unreimbursed visits by uninsured patients, but only with Medicaid rates well below cost. The expansion also generates a crowding out of payers: some visits, previously well reimbursed by commercial insurance, become poorly paid Medicaid visits.

Our recent article in Annals of Emergency Medicine describes how the COVID-19 pandemic has radically disrupted the economics of emergency room staffing. We used data from 136 emergency departments (24 free-standing emergency departments and 112 hospital emergency departments) in 18 states with a national emergency department practice management organization and compared the pandemic to pre-pandemic visits, patient income and staff costs. Consistent with data from the Centers for Disease Control, we found that visits among adults and children fell by 40% and 70% respectively at the start of the pandemic, with significant declines for severe and low-acuity conditions, but most important in this last category. Visits then gradually increased to 80-90% and 60-70% of pre-pandemic levels for adult and pediatric visits, respectively. Reimbursement for physicians has declined in line with declining volumes. The practice organization has, over time, been able to adjust staffing levels in the medium and large emergency departments, largely restoring the pre-pandemic balance between the revenues of the fee-for-service and payment costs for emergency physicians and advanced practice providers who see emergency department patients. However, staff reductions reduced or eliminated surge capacity and reduced clinician working hours and income, at the same time that clinicians faced additional stress and personal infection risks. But in stand-alone emergency departments and small hospitals (

In the long term, some real low-severity emergency visits (eg, pediatric injuries) will return. But others may not because of a permanent shift to urgent care centers, telemedicine or other alternatives designed to attract low-acuity, commercially insured patients. For the first time in memory, newly graduated emergency medicine residents are now struggling to find employment, given the dependence on enough volume to generate the professional services revenue to pay emergency physicians. Under the current fee-for-service system, fewer visits will undermine the already marginal economics of staffing rural emergency departments and other small emergency departments. Without intervention, these emergency services will not be able to afford an emergency physician 24/7/365. As a result, the quality of care will suffer, exacerbating the health problems facing rural communities.

The disruption of the COVID-19 pandemic provides an opportunity to rethink how we fund the staffing of small rural emergency departments. We propose to decouple emergency care from payment by volume in these emergencies, starting with those serving a well-defined catchment area. We call this a “fire department” model. Fire departments, like emergency services, need to be where people live to respond quickly to emergencies. Yet no one expects fire departments to be financially self-sustaining, backed by high prices for people who experience fires, and be at risk if fires drop 20%. Nor is anyone assuming that we should be using public funds to maintain the fire department building and the fire trucks, while firefighters support themselves by episodically charging for their services when they are used. Instead, fire departments and firefighters are considered a public good, supported by tax revenue.

A similar model may work to fund the staffing of small rural emergency departments with emergency physicians independent of fee-for-service volume and separate from the facility-side REH designation. A global budget model from all payers or dedicated tax revenues could support the presence of at least one emergency physician on site 24/7/365 with a staffing cushion. personnel for surge capacity (e.g. mass casualty events) commensurate with existing or anticipated needs. use in a catchment area. Visitor-independent budgets for ED staffing are unlikely to generate the perverse incentives of larger hospital block budgets, where hospitals become more profitable if they cut services for patients to go elsewhere. Periodic inspections could ensure that emergency service personnel meet minimum quality standards.

Contracting for emergency physician services may vary. In one approach, a fully-paying consortium or state could contract with smaller emergency departments, letting facilities either employ emergency physicians within that budget or contract with groups of physicians. who can do it. We prefer the all-payer consortium and global budget approach because commercial and government insured patients use emergency and state budget pressures could lead to below-cost levels of support. In another model, the consortium or state of all payers could contract directly with the emergency services practice management organizations. Either way, emergency physicians would be paid at a market-determined hourly rate. In return, emergency physicians would abandon the problematic and fragile practice of balancing high- and low-reimbursement visits against resources expended.

The COVID-19 pandemic has highlighted the economic precariousness of low-volume emergency department staffing. We believe there is broad consensus that a distributed emergency network staffed with emergency physicians is essential to health care in the United States. Under the unfunded federal mandate of the Emergency Medical Treatment and Labor Act, emergency departments are the only place anyone can seek care for any condition, at any time, regardless of their ability to pay and are therefore the default health care safety net for the country. The company also expects emergency physicians and emergency services to be able to respond to mass casualty incidents, managing multiple critically ill patients at the same time, and public health emergencies, such as COVID-19. We see promise in a fire department model to ensure the viability of staffing small rural emergency departments. Policymakers must work with emergency physicians, hospitals, payers, and the public to address the economic challenges that threaten the emergency care safety net.

Author’s Note

Jesse Pines has consulted for CSL Behring, Abbott Point-of-Care, Novo Nordisk and Medtronic on unrelated work.

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