Unnecessary ED visits from chronically ill patients cost $8.3 billion

The report, released Thursday by Premier, found that six common chronic conditions accounted for 60% of 24 million ED visits in 2017; out of that 60%, about a third of those visits—or 4.3 million—were likely preventable and could be treated in a less expensive outpatient setting.

Premier's findings are in line with other research on patients with chronic diseases, finding they are more likely to use the ED and get admitted to hospitals because they experience poor care coordination.

"Value-based care is managing a chronically ill patient in a coordinated way, and the traditional payment model hasn't rewarded that. It's episodic," Damore said.

The six chronic conditions used in the analysis are asthma, chronic obstructive pulmonary disease, diabetes, heart failure, hypertension and behavioral health conditions, such as mental health or substance abuse issues. They were selected because they are often cited in the academic literature as the most common and costly conditions in the healthcare system, Premier said.

The data from the 24 million ED visits at 747 hospitals comes from Premier's database, which has information on 45% of U.S. patient discharges, according to Premier. To get the results, Premier identified hospitals with the lowest quartile visit rate, or those that had the lowest ED admission rates by condition, and calculated how many visits at the remaining hospitals could be prevented if all hospitals achieved those rates for the six chronic conditions.

And then to arrive at the $8.3 billion in costs, Premier used the average cost for an ED visit estimated by the Health Care Cost Institute, which is $1,917.

Damore said that although the industry is "mostly fee-for-service at this time," he expects an eventual transition to value. "More and more providers are convinced that the future is going to be value-based payment," he said.