Emergency departments lose money on each patient they treat, but they generate 20% of a hospital's profits when examined in context of hospitalwide operations instead of traditional accounting by department, according to a new study commissioned by the California HealthCare Foundation. The study examined California's 245 nontrauma emergency departments. The ERs generated more costs than traditionally recognized but also more revenue, researchers said. The average ER loss per patient was $84, but the average profit on the 1-in-7 patients who needed to be admitted was $1,220 -- more than covering losses on patients not admitted. "While (emergency departments) consume a disproportionate share of hospital resources, they also provide a significant and growing percentage of new patient admissions, making them an increasingly valuable source of hospital profits," said the study's lead author, Glenn Melnick, a healthcare finance professor at the University of Southern California. Overall, one-third of hospital admissions come through ERs, but none of the revenue is credited to the operation nor is revenue generated by ER patients' use of ancillary services, the study said. Read an issue brief or download the study. -- by John Morrissey
Time to think of ERs as moneymakers: study
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