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Matt Losinski finished reading an article that provided grim details of a study of the overuse of emergency services in hospitals in central Texas. He smiled that sardonic half smile that meant there was a strong possibility that County General Hospital (CGH) might have the same problem. As chief executive office (CEO), Losinski always saw the problems of other hospitals as potential problems at CGH, a 300–bed, acute care hospital in a mixed urban and suburban service area in the south central United States. CGH was established as a county–owned hospital; however, 10 years ago the county wanted to get out of the hospital business and the assets were donated to a not–for–profit hospital system. The new owner has continued a strong public service orientation, even though CGH no longer receives the tax subsidy it did when it was county owned; it must look to itself for fiscal health.
The study data showed that nine residents of a central Texas community had been seen in emergency departments (EDs) a total of 2,678 times over 6 years. One resident had been seen in an ED 100 times each year for the past 4 years. Given that an ED visit can cost $1,000 or more, the nine residents had consumed $2.7 million in resources. These high users of ED services were middle age, spoke English, and were split between male and female. To Losinski, the problem seemed like a manifestation of Wilfredo Pareto’s classic 80/20 rule.
Losinski forwarded the article on a priority basis to Mary Scott, his chief financial officer (CFO), and asked her to see him after she read it. Scott stopped by Losinski’s office late the next day and began the conversation by asking him why he thought the article was a priority. Scott reminded Losinski that Medicaid paid 75% of costs for eligible ED users and that the cross subsidy from privately insured and self–pay ED admissions covered most of the unpaid additional costs. Losinski had a good working relationship with Scott, but he was a bit annoyed by her rather indifferent response.
Losinksi wanted details on use of the ED at CGH. He asked the administrative resident, Aniysha Patel, to gather data to identify use rates for persons repeatedly admitted to the ED. The findings that Patel gave to Losinski two weeks later were not as extreme as those reported from central Texas; however, they did show that a few persons were repeatedly admitted to the ED and accounted for hundreds of visits in the past year. The clinical details were not immediately available, but a superficial review of the admitting diagnoses suggested that most admissions involved persons with minor, nonspecific medical problems—persons commonly known as the “worried well.” Although Scott was correct that Medicaid covered the majority of costs, the fact remained that over $200,000 each year was not reimbursed to CGH. Were that money available, it could go directly to the bottom line and could be used for enhancements to health initiatives for the community. In addition, repeated admissions to the ED contributed to crowding, treatment delays, and general dissatisfaction for other patients.
Losinski presented the data to his executive committee, which includes all vice presidents, the director of development, and the elected president of the medical staff. The responses ran the gamut from “So what?” to “Wow, this is worse than I imagined.” Losinski was bemused by the disparity of views. He had thought there would have been an almost immediate consensus that this was a problem needing a solution. The financial margins for CGH were already very thin, and the future for higher reimbursement was not bright. A concern echoed by several at the meeting was the requirement of the federal Emergency Medical Treatment and Active Labor Act (EMTALA) that all persons who present at an ED that receives federal reimbursement for services must be treated and stabilized.
Losinski asked his senior management team for recommendations to address the problem of ED overuse.

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