The Cost Shifting Economics of United States Emergency Department Professional Services (2016–2019)

Abstract

Study objective: We estimate the economics of US emergency department (ED) professional services, which is increasingly under strain given the longstanding effect of unreimbursed care, and falling Medicare and commercial payments. Methods: We used data from the Nationwide Emergency Department Sample (NEDS), Medicare, Medicaid, Health Care Cost Institute, and surveys to estimate national ED clinician revenue and costs from 2016 to 2019. We compare annual revenue and cost for each payor and calculate foregone revenue, the amount clinicians may have collected had uninsured patients had either Medicaid or commercial insurance. Results: In 576.5 million ED visits (2016 to 2019), 12% were uninsured, 24% were Medicare-insured, 32% Medicaid-insured, 28% were commercially insured, and 4% had another insurance source. Annual ED clinician revenue averaged $23.5 billion versus costs of $22.5 billion. In 2019, ED visits covered by commercial insurance generated $14.3 billion in revenues and cost $6.5 billion. Medicare visits generated $5.3 billion and cost $5.7 billion; Medicaid visits generated $3.3 billion and cost $7 billion. Uninsured ED visits generated $0.5 billion and cost $2.9 billion. The average annual foregone revenue for ED clinicians to treat the uninsured was $2.7 billion. Conclusion: Large cost-shifting from commercial insurance cross-subsidizes ED professional services for other patients. This includes the Medicaid-insured, Medicare-insured, and uninsured, all of whom incur ED professional service costs that substantially exceed their revenue. Foregone revenue for treating the uninsured relative to what may have been collected if patients had health insurance is substantial.