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Pharmacist Stacia Woodcock
Pharmacist Stacia Woodcock administers a flu shot last month for Walgreens in New York. The pharmacy said it has seen higher sales of flu-related drugs as well as vaccines.
Photo credit: AP PHOTO

Volume on high

Winter emergency-room influx caps off busy year

By Posted: February 9, 2013 - 12:01 am ET

For 10 days in January, Bayhealth Medical Center was near gridlock as patients with winter ailments jammed its emergency department and created bottlenecks that reverberated throughout the facility.

The 310-bed hospital in Dover, Del., saw a “tremendous influx of patients” with influenza, as well as norovirus and higher-than-usual cases of pneumonia, said Ann Keane, director of patient care services. “Essentially what happened is that things came to a halt in terms of patient flow.”

The volume was so great that the emergency department ultimately went on diversion, and the hospital opened another medical/surgical holding unit to accommodate the extra patients.

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Bayhealth offered existing staff members incentives to work overtime and brought in additional agency and travel nurses. “It's a very expensive proposition, but that's what we need to do to provide care for our patients,” Keane said.

It's a scene that repeated itself at hospitals across the country as the flu season last month reached epidemic levels as measured by mortalities.

It also capped off what was already a busy year for hospital emergency rooms.

At Bayhealth, for instance, ER volume in 2012 increased about 15% over the course of the year, Keane said. A newly opened satellite campus was supposed to relieve some of the pressure, but while it saw twice as many patients as anticipated, it did not make a dent in the number of patients seen at the main campus.

It's unclear whether overflowing emergency rooms will translate into improved margins as financial results come in—or whether the additional resources needed to care for patients with lower-acuity conditions might be a net strain on hospital balance sheets.

Darren Lehrich, an analyst at Deutsche Bank, wrote in a note to clients that while the flu caused December visits to the emergency department to spike, the same dramatic uptick wasn't seen in admissions—a trend he expected to continue in the early months of this year.

In an earnings report last week, HCA, Nashville, the nation's largest investor-owned hospital chain, reported that ER visits increased 12.7% in the fourth quarter of last year compared with the same period the previous year.

However, same-facility inpatient admissions saw a more modest 4.3% boost. The hospital giant also saw an increase in both the number of uninsured patients at its facilities as well as bad debt and charity care as a percentage of its quarterly revenue.

While winter ailments bring in patients, their conditions are generally less severe and bring in lower reimbursement. As a result, James Lebuhn, senior director at Fitch Ratings, noted that the ratings agency expects this year's flu season to be overall credit-neutral.

And there are other challenges for hospitals, including increased staffing demands, uninsured patients who use the ER as a safety net and even the threat of readmissions penalties.

For payers, that means this year's flu season will be a costly one.

Humana, one of the largest health insurance companies, adjusted its earnings-per-share guidance for 2013, noting in an earnings release that it incurred higher flu-related costs than it previously anticipated. Retail pharmacies such as Walgreens also attested to higher sales of both flu-related prescriptions and vaccines.

Like its hospital clients, TeamHealth, an outsourced physician staffing firm, reported that an earlier and more severe flu season helped boost the volume of patients it saw. However, it noted that pricing growth on its fee-for-service contracts was essentially flat as it saw less reimbursement as well as a more adverse payer mix.

Dr. Louis Isaacson, an emergency department medical director at TeamHealth, said the flu season exposes what is already a fault line in primary care, as patients without a regular doctor flood ERs for same-day treatment. Some of these patients are uninsured, but others simply have not fit routine care into their hectic schedules. And it's a situation that the staffing firm had been seeing for the past year.

“It's becoming a perfect storm, in a sense,” Isaacson said. “That's another reason you're seeing the ED volume spike.”

Grady Health System, Atlanta, similarly saw a double-digit percentage increase in patient visits in 2012, tracking 119,000 patient encounters compared with the previous year's roughly 105,000.

Dr. Leon Haley, chief of emergency medicine for the system, whose flagship facility is 660-bed Grady Memorial Hospital, noted that more patients are coming in with low-acuity conditions such as the flu, as well as high-acuity conditions such as stroke and trauma. “The increase is across the board,” he said.

Haley added that emergency departments nationwide have been seeing additional patient volume every year for the past 10 to 15 years, attributing the increase to patients without access to primary-care providers, as well as fewer emergency departments in operation.

Grady, for its part, has been working to streamline processes and has tapped a consulting firm to evaluate a potential redesign of its emergency department. “We've got pretty strained hospitals,” Haley said. “We're working on adding more resources, but you can't flip a switch and have things pop up.”

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