Today's emergency departments are facing traumatic injuries of their own, and in some cases they are turning to outsourcing companies to help them heal.
"The challenges of working in the emergency department are unbelievable," says Russell Harris, M.D., chief of the ED at Our Lady of Lourdes Medical Center in Camden, N.J. "Patients have higher expectations, the risk management environments have gotten much tougher, and the scrutiny under which doctors live includes not only (threats of) malpractice but state and federal regulations and licensing requirements."
In response, hospitals such as Our Lady of Lourdes are outsourcing emergency department functions and other responsibilities to professional management companies. Our Lady of Lourdes hired Dallas-based EmCare a year and a half ago to manage its ED. Harris says EmCare helps the hospital's emergency physicians handle the business end of their profession so they can concentrate on medical care.
Emergency departments and physicians depend on outsourcing companies for any number of tasks. Such companies reconcile the cost, efficiency, reporting and other demands of managed care; prepare paperwork for credentialing and licensing; monitor staffing and scheduling needs; and coordinate their activities with physicians throughout the hospital and medical community.
Healthcare organizations and others "are under enormous pressure to deliver more value, more efficiently," says Michael Corbett, president of Michael F. Corbett & Associates, an outsourcing consulting company in Poughkeepsie, N.Y. Corbett's firm offers outsourcing training programs to executives. "By outsourcing some functions," Corbett says, "organizations are better able to focus their energy and resources on the specific activities that produce the unique value they provide."
Outsourcing also can reduce operating costs because specialized companies often can provide a service more economically. It's difficult to estimate how much the average hospital saves because the cost of outsourcing services varies widely.
"In some hospitals we're able to save a significant amount of money," says Chuck Lentscher, vice president and director of new business development for EmCare. "But just as often, a hospital doesn't have enough (staff) coverage, or they need to do recruiting or have us analyze their ED operations and make recommendations. Or they may want to upgrade the quality of their care by hiring all emergency-department-certified doctors. So, cost is directly related to what the hospital's specific needs are."
EmCare is one of the largest physician practice management companies working with emergency physicians and departments. It serves more than 4,000 doctors and nearly 400 hospitals in 37 states that provide almost 6 million visits annually.
"The absolute complexity of just being able to practice medicine has increased many-fold," says EmCare President David Singley. "You need a back-office function to even understand the system. We have wonderfully trained doctors who face administrative barriers. But if they join a (PPM), we put that together for them."
EmCare; Durham, N.C.-based Coastal Physician Services; and Team Health of Knoxville, Tenn., lead the industry in providing emergency contracting services.
A survey by the Association of Emergency Physicians estimates about one-third of the nation's emergency departments are run by contract management companies.
The concept of outsourcing began in the mid-1960s as a way to recruit quality physicians, according to Tracy Young, vice president of marketing at Team Health. Today, the focus of outsourcing has expanded to include administrative and technological support, continuing education and training, legislative advocacy, and efficient and cost-effective clinical processes.
The cost-control issue is important because, according to EmCare, patient visits to the emergency department constitute 40% of hospital admissions and 30% of laboratory and X-ray activity. On average, 40% of ED patients receive pharmacy services, 35% receive X-rays, 28% receive laboratory services, and 6% receive electrocardiograms.
Although industry experts expected stricter referral and reimbursement policies under managed care to reduce ED visits, the opposite is true. EmCare notes that ED visits have risen approximately 5% annually in the past five years, except in states with high managed-care populations, where they have decreased as much as 10% per year.
Bruce Harris, M.D., medical director of the emergency department at Highland Park (Ill.) Hospital, agrees that managed care's goal of not admitting as many patients means more people are treated in the ED. He says the increased traffic also is due to hospital consolidations and an aging population that shows up at the ED with more acute conditions.
Highland Park is affiliated with Sterling Healthcare Group, a Coral Gables, Fla.-based company that provides emergency medicine practice management.
Sterling, formerly a subsidiary of FPA Medical Management, has been purchased by Coastal. The combined company has 275 contracts for 2,200 emergency physicians who account for 4 million annual patient visits.
Outsourcing organizations can offer ideas and solutions proven to work in the ED, such as protocols and fast tracks. Highland Park used guidelines from the National Institutes of Health to develop a protocol for pediatric and adult asthma. Pulmonologists and primary-care and emergency physicians created the protocol, which gives ED nurses the power to administer care if a doctor is busy.
"It helps us guarantee that patients get a consistent level of care," says Harris, "and it speeds things up." The protocol addresses assessment of vital signs and oximetry, monitoring of peak flow meter readings, use of bronchodilators and corticosteroids, and patient disposition to an observation unit, hospital admission or home.
Triaging patients in a fast track keeps those with less critical symptoms separate from the acute side of the emergency department, explains Djiby Diop, M.D., assistant professor of emergency medicine at the University of Massachusetts Memorial Health Care in Worcester. Diop chaired a May conference in Chicago on achieving maximum efficiency in the ED. "It allows us to get those patients in and out. If they were in the main ED, I would bypass an ankle sprain to take care of someone with chest pain. So it helps with patient satisfaction."
Creating a diversion
Diverting patients before they arrive at the ED is a goal of MedAmerica, a medical practice support company founded by California Emergency Physicians Medical Group, an Oakland-based physician and staffing management company for emergency departments. CEP staffs 47 EDs and 15 ambulatory-care centers in California.
Wesley Curry, M.D., president and chairman of CEP, says the MedAmerica Oncall telephone triage system helps managed-care patients decide if they should visit the ED, an urgent-care center or their primary-care physician. "Some primary-care physicians have found it not to be economical to see patients in their offices and are more willing to refer them to the emergency department," Curry explains.
While emergency physicians are aware of managed care's increased role in healthcare, so far their daily responsibilities have not been touched directly by its demands.
"Managed care has impacted ED physicians because they often need to consult primary-care physicians or specialists before admitting patients," explains Harris of Highland Park Hospital. "But day-to-day care has not been affected. Managed-care companies are not asking anything of us nor are they giving us any incentives to make changes, like not ordering as many labs or using less-expensive drugs. If they want us to do that, that would be fine. But we would want to be rewarded."
Emphasis on efficiency
Even without being asked to watch the bottom line, emergency physicians often realize they must do so. Many times they seek the help of outside managers.
Team Health, which has 375 hospital contracts and works with 1,800 ED physicians, makes sure doctors receive benchmarking information about drug costs and utilization rates. "We don't tell them what to do," says H. Lynn Massingale, M.D., the company's president and chief executive officer. "But we give them data. If they are using resources inappropriately, it puts the patient at risk and it puts the doctor and hospital at risk for malpractice."
Most physicians are contractors, not employees, of PPMs, Massingale says. In fact, some companies don't even have on-site staff at the hospitals. Instead, regional directors oversee operations at several hospitals. Physicians usually receive a fixed salary or hourly rate, while busier hospitals often give doctors financial incentives.
Paul Kolodzik, M.D., chief medical officer of Premier Health Care Services in Dayton, Ohio, says it's essential to operate more efficiently to "meet the demands of the managed-care environment. That involves changing the way we practice and improving our case processes."
Premier, founded in 1987 as a four-member emergency medicine physician practice group, has grown into a multispecialty physician-owned group that includes more than 175 doctors. The group usually designates a point person to lead change, focusing on quality of care, service and cost. One example would be creating a chest pain unit, which can decrease the time a patient stays in the ED and lower costs.
"Local leadership is key," and physicians must be involved in the process, Kolodzik says. "If there's one thing we've learned from the PPM industry, it's that physicians need to work with and for fellow physicians -- and for themselves -- to have an equity stake and not just be independent contractors."
Despite its advantages, not everyone is quick to embrace outsourcing. "There's been a level of contention and controversy among emergency physicians," says Highland Park's Harris. "A lot of people feel they're siphoning money out of doctors' pockets." But Harris says he's been happy with his hospital's affiliation with Sterling.
He says the company has "brought to us a lot of ideas that we might not have been able to come up with. I think there's a very legitimate role for contract management companies."
He advises physicians to "get a good idea of exactly what the role of these companies is and ask them what value they will bring to your practice, to your patients and to your hospital. And demand accountability from them.
"They're not going to show you their books, but you have every right to know where the money is going, how much is taken off for management or given to stockholders. If you're turning some of your hard-earned money over to them, you can make some demands."
All these changes provide more evidence that being a doctor today involves much more than simply taking care of people. "The days of the 'doctor czar' are over," concludes Massingale. "Good care is just not enough. Doctors need to be team players and have the attitude that healthcare is changing and they must change with it."
Group hugFinding the right outsourcing company isn't easy, but establishing criteria can help.
Physicians and hospitals should contract with a group that:
- Is capable of partnering with a hospital in a managed-care setting.
- Has managed-care experience as well as knowledge of payer requirements and needs.
- Has a dedicated emergency department information system that is integrated to the point of providing outcomes data and physician-profiling data.
- Can optimize ED operations through on-site consultation.
- Is capable of providing innovative, cost-effective services, such as fast tracks and observation units.
Moving outOutside management companies can offer the following benefits to emergency departments and physicians:
- Physician recruitment, credentialing and staffing
- Billing and collection services
- Managed-care and hospital contracting
- Information systems management
- Resource utilization management
- Risk management and legal consultation
- Professional liability insurance
- Fast-track and protocol development
- Customer satisfaction enhancement training
- Continuing education
- Opportunity for advancement or relocation
- Preparation for accreditation reviews from organizations such as the Joint Commission on Accreditation of Healthcare Organizations
Robin F. DeMattia is a Warrenton, Va.-based business writer and editor.