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Diverting patients may divert money

Study sees cost of turning away ambulances

Ambulance diversions - the practice of hospitals refusing to accept ambulance-delivered emergency patients, instead diverting the ambulances to other hospitals with less crowded emergency departments - have become increasingly common nationwide and in Portland in recent years.

But a researcher at the Oregon Health and Science University School of Medicine thinks the sometimes life-threatening diversions do not need to happen as often as they do.

K. John McConnell, a researcher and economist at OHSU, has been studying how hospitals can reduce diversions. Last year he published a study that showed if hospitals increased the number of beds available in their intensive care units, emergency rooms could dispatch their patients faster, lessen overcrowding and reduce diversions.

Last week McConnell added one more piece to the diversion puzzle when he published a new study that showed hospitals lose money when they turn away ambulances.

Portland hospitals go on diversion - notifying ambulance dispatchers they will take no more patients - fairly regularly.

Providence Portland Medical Center is on diversion about 100 hours a month. OHSU diverts about 10 percent of the time, and as much as 40 percent of the time during the winter, when more people get sick. But until McConnell's study, nobody was sure whether the practice was costing hospitals money.

'There's an idea that ambulance patients were always uninsured or always Medicare patients,' McConnell said. 'We wanted to get an idea of what their breakdown was.'

ER called a 'loss leader'

One thing McConnell learned is that ambulance patients generally represent more profitable patients than people who walk into the emergency department. In fact, McConnell's study found ambulance patients ended up with bills that were, on average, almost three times higher than walk-in patients.

Even more surprising, McConnell's study shows that the emergency department isn't the money loser many assume it to be. 'The emergency department does a good job for the hospital,' McConnell said. 'You could call it a loss leader. It brings in the customers.'

McConnell reviewed billing data for OHSU emergency patients for a two-year period and found that every hour of ambulance diversion cost the hospital approximately $1,100 in revenue. For a hospital such as Providence, on diversion 100 hours a month, that could theoretically represent $1.3 million in lost revenue over the course of the year.

The goal of his work, McConnell said, is to convince hospitals they can and need to reduce diversion time. But McConnell said he recognizes that he's fighting an uphill battle in proposing that hospitals maintain extra empty beds that can be used when emergency departments become overcrowded.

'It's still kind of uncertain if hospitals are going to sit up and take notice,' he said. 'The incentive for hospitals is to fill those beds. If you're keeping it open you're not making any money.'

Psychiatric beds also in play

Kathleen Ramey, head of emergency services for Providence Health System, said McConnell's findings probably wouldn't apply to her hospitals because the cause of diversions for Providence isn't a lack of intensive care beds. Ramey says emergency department overcrowding at Providence is primarily due to a lack of in-patient beds for psychiatric patients.

In recent years, emergency departments have been besieged by patients suffering mental illnesses. Leaving a psych bed empty so that it is available for an emergency room visitor just doesn't make sense, Ramey said.

'You can't really do that because there's always somebody in either our emergency department or somebody else's that wants that bed,' Ramey said. 'There's always somebody waiting to get in.'

The solution, McConnell said, might be hospitals receiving a bonus from Medicare for maintaining open beds.

Currently, he said, the federal government's Centers for Medicare and Medicaid Services offer hospitals financial incentives for meeting standard-of-care benchmarks such as rapid treatment of heart-attack patients.

A similar incentive for hospitals moving patients out of the emergency department more quickly might lead to fewer ambulance diversions, he said.

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