In his recent Op-Ed contribution [Blame Emergency Rooms for the Out-of-Control Cost of Healthcare. September 5, 2018], Dr. Glenn Melnick astutely calls out that hospitals use their emergency departments to cynically fill hospital beds and inflate their own revenue through the use of “billed charges”, preying on the public’s need for emergency care. Dr. Melnick proposes regulation to cap billed charges at a percent of contracted rates. Such strong medicine may be necessary in such a dysfunctional system. But another option involves unleashing the power of disruptive innovation.
At the heart of the problem is the continued monopoly power of the hospital. Legislatures, regulators and communities have been fooled into protecting these outdated and wasteful institutions. Most healthcare can and should be delivered outside of the hospital, in smaller, leaner, technology-powered facilities. However, many states – like Oregon – still dictate that only hospitals may deliver emergency care – funnelling all patients to the most costly, least accessible point of care, wasting billions of dollars annually. For example, we estimate that opening up non-life threatening emergency care to emergency non-hospital emergency department alternatives that don’t charge facility fees would save Oregon Medicaid programs alone at least $50 million annually by delivering effective care in less intense settings, with far lower overhead.
Once hospitals lose their monopoly-protected status and must compete without subsidies and price supports, our healthcare system will reap a cascade of downstream benefits beyond direct taxpayer savings. Let’s combine Dr. Melnick’s good thinking about regulations with the power of innovation.
Albert DiPiero, MD, MPH Co-founder and Chief Medical Officer, ZOOM+Care
Dave Sanders, MD, Co-founder and CEO, ZOOM+Care
Read: Dr. Melnick's other work