City Emergency Rooms Closing - Linked to Profit Motive - While ER Use Increases

A significant new study reported in the May 18, 2011 issue of the Journal of the American Medical Association, has found that a net 27% of Hospital Emergency Rooms in U.S. cities closed between 1990 and 2009, and those operated for-profit, generating low profit margins, facing market competition, or providing care to uninsured, Medicaid and poor patients (so called “Safety Net” Emergency Departments), were significantly more likely to close than others.

Yet, during the same time period, total U.S. Emergency Room visits increased by 30%, from 94.8 million visits to 123 million visits annually, the study authors reported.

The findings that Safety Net hospitals were significantly more likely to close their Emergency Departments than other hospitals were “especially compelling,” the researchers commented, “given that vulnerable populations, including those in minority groups and both uninsured and underinsured patients, use EDs [hospital Emergency Departments] for acute care at greater rates than other populations.”

Since 2000, federal law (the Emergency Medical Treatment and Active Labor Act of 2000) has required hospital Emergency Rooms to evaluate and treat all patients in need of emergency care regardless of ability to pay.

The study was led by Dr. Renee Y. Hsia, from the Department of Emergency Medicine, University of California, San Francisco; and included scientists from RAND Health, Washington, DC; the Graduate School of Business and Public Policy, Naval Postgraduate School, Monterey, California; and the National Bureau of Economic Research, Cambridge, Massachusetts.

The researchers analyzed data of hospital emergency room closings between 1990 and 2007, obtained from the American Hospital Association, as well as financial data from the Centers for Medicare & Medicaid Services (CMS) and other sources.

They found that over this period, after taking into account new Emergency Rooms opened, the total number of hospital-based Emergency Departments (ED’s) in urban areas declined by 27% from 2,446 to 1,779.

They analyzed financial data regarding all city-based ED’s in the study, and their patient populations and surrounding communities. After adjusting for certain other potential factors, they found that ED closings in U.S. cities over the period studied correlated significantly with market-driven factors. Specifically, the study results showed that:

• City hospitals with profit margins in the lowest quartile among U.S. hospitals were 90% more likely than other city hospitals to close their ED’s;
• For-profit city hospitals were 80% more likely to close their EDs than not-for-profit or government hospitals;
• “Safety-net hospitals” (those that “organize and deliver a significant level of health care and other related services to uninsured, Medicaid and other vulnerable patients”) were 40% more likely to close than other EDs;
• EDs “in communities with the highest percentage of population in poverty” were 40% more likely to close than other EDs; and
• EDs which faced the competition of another ED located within a 15-mile radius were 80% more likely to close than EDs that did not face such competition.

In summary of their findings, the study authors wrote, “From 1990 to 2009, the number of hospital EDs in nonrural areas declined by 27%, with for-profit ownership, location in a competitive market, safety-net status, and low profit margin associated with increased risk of ED closure.”

Thus, the study showed that market-driven factors were significantly associated with the ED closings, and the closings affect the poorest, uninsured, and most vulnerable patients, who depend on “safety net hospital emergency departments” for their care, the most.

“As more of these patients lose access to primary care, an increasing number of EDs are meeting criteria as safety-net facilities, which suggests that more EDs may be at risk of closing in the future,” the researchers observed. “ED closures can have substantial effects on vulnerable communities, causing a decline in care as hospitals serving poor and minority populations select to provide services based on profitability rather than community health needs.”

Further explaining the profound and alarming effect that these profit-driven Emergency Room closings can have, the authors said:

“The closure of an ED can have profound repercussions for a community. Closures can adversely affect access to emergency care for everyone—insured and uninsured alike.​ Hospital closures significantly affect access to care not only by increasing the distance to the nearest hospital but also by increasing the patient load at neighboring hospitals. ED crowding degrades quality of care, not only by prolonging patient waiting times and increasing the rate of patients who leave without being seen, but also in terms of outcomes, including increased rates of morbidity and mortality.​ Because Medicaid, SCHIP, and uninsured patients are highly reliant on hospital EDs for acute care, ED closure can displace tens of thousands of uninsured and low-income patients to other EDs, worsening crowding and potentially setting the stage for additional closures.”

The authors point out that their study analyzed Emergency Room closings only through 2007, before the severe economic recession of 2008, which they surmise most likely brought increased financial pressures on hospitals that may actually have increased the rate of Emergency Rooms closed after the study period.

“Our findings underscore that market-based approaches to health care do not ensure that care will be equitably distributed,” the researchers concluded.​ “In fact,” they said, “the opposite may be true.” “As long as tens of millions of Americans are uninsured, and tens of millions more pay well below their cost of care, the push for ‘results-driven competition’ will not correct system-level disparities that markets cannot—and should not—be expected to resolve,” the study authors concluded.

The Full Study Report, entitled Factors Associated With Closures of Emergency Departments in the United States, is available in the May 18, 2011 issue of JAMA, the Journal of the American Medical Association.

See also, coverage by:

MedPage Today; and

The New York Times.

See, generally, our coverage of issues concerning health care reform, in our VoicesForCare™ section.

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