Confronting the ER Spend Crisis

Moving to Value Alliance
2 days ago
3 min read

The cost of ER visits is skyrocketing faster than almost any other hospital service, becoming a critical challenge for self-funded employers and patients alike.

Al Lewis, founder of The Validation Institute and the gamified health literacy platform Quizzify, joined a recent episode of Moving to Value Unscripted to discuss why ER spending is spiraling out of control and what to do about it.

Anatomy of Rising ER Costs

ER visits now account for approximately six percent of total health plan spend, with costs rising faster than almost any other hospital service. This crisis is driven by several key factors:

Systemic up-coding: Hospitals are increasingly billing visits at higher intensity codes even when the patient's condition may not warrant it. The rate of high-level coding has tripled even as hospital admission rates for these patients have remained flat.
Shifting profit center: Hospitals leverage the Emergency Medical Treatment and Labor Act (EMTALA), which requires them to treat everyone, to justify price hikes on insured patients to cover the costs of treating uninsured patients.
Gaps in primary care access: A lack of after-hours access to primary care frequently leaves patients with no choice but the ER for ambulatory care-sensitive conditions.

Taking Power Back

Individual agency serves as a powerful tool. By taking proactive steps, consumers can directly challenge the lack of transparency that often characterizes emergency department charges.

The 18-Word Solution: One strategy for reclaiming financial control is known as the 18-word Prevent Consent. Patients can protect themselves by writing a specific limitation on hospital intake forms: "Superseding other consents, I consent to responsibility (including insurance) for up to 2 times Medicare if coded correctly."
Hold Your Ground: Hospitals may attempt to dismiss the modified consent by claiming a prior agreement with an insurer, but it’s a fundamental principle of contract law that two parties cannot bind a third party to a contract against their will. By treating the patient after they have explicitly written their terms into the intake form, the hospital has legally accepted that performance constitutes a contract.
Health Literacy: Improving health literacy can help patients understand their rights, as well as which services they need. Distinguishing between "urgent" and "emergent" care can prevent unnecessary and costly ER visits for manageable conditions.

Systemic Solutions

Employers can move beyond individual action to implement broad protections and help move the needle for entire populations.

Auto-Consent Strategy: Employers can proactively write to area hospitals stating that, for their specific account, the facility agrees to a set rate (e.g., 2 times Medicare) unless the hospital explicitly opts out.
Insurance Card Integration: Employers can print QR codes or language on insurance cards referring to a "consent on file," ensuring the agreed-upon pricing is recognized at the point of intake.
Performance Validation: Leveraging organizations like the Validation Institute helps employers identify high-value disruptors like virtual orthopedic or diabetes management companies that provide more cost-effective alternatives to ER-centered care.

The stakes of the emergency care crisis extend far beyond individual medical bills. When ER spending consumes six percent of a total health plan, it drains capital that could otherwise be used for wage increases, improved benefits or lower premiums. Normalized up-coding and opaque pricing is not merely an administrative issue, but a systemic racket to extract maximum revenue from unsuspecting plan sponsors.

Movement toward value-based care depends on a shift toward radical transparency. While the broader healthcare system remains locked in with inefficient, high-cost models, real change is occurring from the ground up, from employers and even patients. We can work to push a transition to clinical outcomes determining the value of care.

Listen to our full conversation with Al to learn more.

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