Corporate and Hospital Profiteering in Emergency Medicine: Problems of the Past, Present, and Future

Abstract

Emergency physicians should be aware of the many changes happening to the specialty and practice of EM resulting from corporate control, influence, and changing federal and state health care financing issues.

Growth of for‐profit involvement in emergency medicine graduate medical education and association between for‐profit affiliation and resident salary

“…Studies should also examine the role and impact of contract management groups (CMGs) in clinical sites involved in EM GME. Many emergency rooms in the United States are staffed by large corporate‐owned CMGs 24 . CMG staffing is independent of the overall profit status of the hospital; therefore, even in nonprofit affiliated programs, corporate interests could be impacting residency experiences via CMG influence.…”

Trends in Visits to Acute Care Venues for Treatment of Low-Acuity Conditions in the United States From 2008 to 2015

“…The magnitude of the increase in ED prices is consistent with that in other work, which has reported an increase in ED prices of 85% . Reasons for the rapid increase in ED prices may include treatment of sicker patients; an increase in the provision of high-acuity ED care; upcoding (using a code for a provided service that is higher than what was performed to increase profitability); greater provider consolidation among hospitals as well as among emergency medicine physicians, which facilitates more market power; and greater use of guidelines and protocols that may increase potentially unnecessary testing …”

The High Stakes of Outsourcing in Health Care

“…CMGs' tactics can include reducing costs (often by reducing payroll), raising physician productivity metrics, taking a larger share of physicians' professional fees to cover overhead expenses than is warranted, and increasing prices and volume of services used. [34][35][36] Emergency medicine appeals to CMGs because it is episodic care requiring minimal follow-up and is well compensated in the US clinical reimbursement system. Moreover, emergency clinicians are more mobile because emergency medicine does not involve ongoing patient care.…”

“…However, as for-profit companies, CMGs have a laser focus on financial performance, potentially encouraging policies that put high-quality care at risk, for example, by establishing aggressive patient-per-hour quotas and rewarding more procedures and ordering of tests that add marginal value and may harm patients. 35 Physicians who work for a CMG often have to divide their loyalties between their employer and the outsourcing health system, navigating the two organizations' different value systems and priorities, which may lead not only to physicians' conflicted loyalties but also to organizational disunity and poor teamwork d an especially fraught dynamic in a medical specialty that frequently involves life-and-death clinical scenarios. In one study, 34% of CMG-employed emergency physicians reported concerns about losing their job if they raised questions about over-testing, quality of care, or patient treatment d compared with 18% of non-CMG physicians.…”