Inside the data Part 3 There’s no slowdown in visits to the ER despite changes in reimbursement rules

Jessica Perry//April 29, 2016

Inside the data Part 3 There’s no slowdown in visits to the ER despite changes in reimbursement rules

Jessica Perry//April 29, 2016

With the increase in urgent cares and a focus on primary care utilization from more insured individuals, thanks to the Affordable Care Act, the emergency departments at hospitals should be quieter, right?

The data says differently, for now.

A look at unaudited financial data collected by the New Jersey Hospital Association from its members from 2014 to June 2015 shows that at least 45 percent of all admissions in that period were through the emergency departments.

The nonprofit hospitals with the highest percentage of admissions from the emergency room are Lourdes Medical Center in Burlington and Holy Name Medical Center in Teaneck, with more than 90 percent of admissions in 2015.

On the lower end, with fewer than 50 percent admissions, are University Medical Center of Princeton, Saint Peter’s University Hospital in New Brunswick, as well as the Cooper University Health System in Camden. 


Hospital executives are not surprised by the findings.

Despite the push toward a value-based, outcomes-based payment method — which is supposed to push physicians into the light as the first point of contact — the need for emergency rooms continues to exist in a big way.

In fact, Hackensack University Health Network CEO Robert Garrett said it will become a more privatized environment and more focused on specialized needs such as bariatric, geriatric, cancer and pediatric.

“The place for emergency rooms is where patients really need that level of care,” Garrett said. “The hospitals are investing to be sure (rooms) are state of the art and meet the needs of consumers.

“Patients are looking for privacy and dignity in their care.”

The point has often been brought up among hospital executives to highlight a change in the large semi-private emergency ward of years gone by. The previous setup was identified as a cause of hospital infections and not logistically sound for patient bed assignments when dealing with different gender identities.

But the health care industry continues to push against the use of ERs as a first resort, which is somewhat contradictory to touting wait times on websites.

ER wait times used to be billboards, but now they are hot buttons at the top of hospitals’ home pages.

In addition, many hospitals offer check-in options and scheduling of emergency visits or procedures on the website.

CarePoint, though not a nonprofit acute facility, is located in the neighborhood of one of the highest ER-utilizing populations in the state.

The percentage of admissions from the emergency department at the Hoboken campus is 84.6 percent, while Jersey City is 89.7 percent and Bayonne is 99.8 percent.

CarePoint CEO Jeff Mandler says that stems from the fact there is a large uninsured and undocumented immigrant population in Hudson County.

“You can’t change the population that comes through the door, and you have to care for them,” Mandler said. “We have to be very creative and efficient and effective. We are a small, community-based hospital and there are big hospitals around us.”

Health care executives say the overall picture looks something like this:

  • Hospitals are pushing patients out of the emergency room;
  • Medicare is cutting reimbursements, which is the majority payer for inpatient visits;
  • Medicaid is expanding to increase the number of insured patients a hospital sees;
  • Commercial payers are interested in value-based payments, but the cost shift is risky;
  • Hospital cash-on-hand has increased on average, but most hospitals also have hefty debts;
  • Capital investments require a certain amount of cushion in the margins;
  • Municipalities want their share of the taxable portions of the business.

Simply put, the current value-based system is not sustainable, many say.

About the data

As the effects of the Affordable Care Act are trickling down, the local pressure is starting to be felt in New Jersey. With changes to the types of payment for health care, a shift in risk and the ongoing chess match of hospital and physician consolidations, a lot of attention is being placed on the finances of the state’s nonprofit hospitals.

NJBIZ obtained unaudited information about hospital finances and metrics, collected by the New Jersey Hospital Association but not released to the public. The data, from 2014 and up to June 2015, sheds light on just how some of the systems can be affected by issues such as municipal tax assessment concerns, tiered networks and charity care.

This is the third story NJBIZ has presented that is crafted from this data:

Day One: Taxes and nonprofits

Day Two: Tiered networks and payer mix

Day Three: Emergency rooms and fee-for-value

Financial experts, however, say the system is not changing nearly as fast as it should to handle the economic pressures.

“Hospitals are limited in how much they control prices,” said John Harris, a health care consultant with Philadelphia-based Veralon. “Hotels can charge per room (based on how) they are affected by the market. Hospitals have contracts with insurers that often limit how much they can raise rates for their true price, versus the list price with insurers.”

Linda Schwimmer, president and CEO of the Health Care Quality Institute, said that while models of care are trying to keep people out of the ER, there are access-to-care issues that prevent it from happening.

“In many parts of the state there is a lack of after hours care. Also, for Medicaid beneficiaries and in some parts of the state there is a shortage of specialists that will accept their insurance. From the patient’s perspective, it is much easier to go to the ED and have everything done in one place at one time, especially if it’s open 24 hours and near public transportation,” she said. “We still have a ways to go in providing convenient access to care for everyone. Tele-health, urgent centers, mini-clinics, more team-based care, work site health centers and other models will help and should be supported.”