« Markets in everything | Main | Cads and Dads »
The problem with emergency rooms
Inadequate emergency rooms are one of the most neglected policy issues in the United States. Read this depressing article. Excerpt:
Emergency medical care in the United States is on the verge of collapse, with the nation's declining number of emergency rooms dangerously overcrowded and often unable to provide the expertise needed to treat seriously ill people in a safe and efficient manner.
Long waits for treatment are epidemic, the reports said, with ambulances sometimes idling for hours to unload patients. Once in the ER, patients sometimes wait up to two days to be admitted to a hospital bed.
As a system, U.S. emergency care lacks stability and the capacity to respond to large disasters or epidemics, according to the 25 experts who conducted the study. It provides care of variable and often unknown quality and depends on the willingness of doctors and hospitals to lose large amounts of money.
That's the grim conclusion of three reports released yesterday by the Institute of Medicine, the product of an extensive two-year look at emergency care.
This is one reason why we are less well suited to defend against a pandemic or a major terrorist attack than many people think. Note that emergency rooms are unpriced resources for many users, so this outcome should not surprise the economist. Did you know that the number of emergency rooms has decreased since 2001?
Are any of you willing to return to pre-1986 policy, when emergency rooms were not obliged to treat all comers? Is there evidence on how big a difference this law made? If we expanded emergency room capacity, but kept current law, would we in effect have national health insurance, paid for by an (implicit) tax on other forms of medical care?
Here is an article on how emergency rooms work. Here is a claim that most people don't need to go. A cross-country comparison of the economics of emergency rooms would make for a fine dissertation, and then some.
Posted by Tyler Cowen on June 17, 2006 at 07:54 AM in Medicine | Permalink
Comments
This post about overloaded emergency rooms and the declining supply of emergency rooms is a classic example of what is wrong with public debate in the USA. The elephant is standing in the room, trumpeting loudly, and making an awful mess of the place. Yet, almost everyone pretends they can’t see the elephant and in fact, the elephant doesn’t exist. The elephant is, of course, immigration, particularly illegal immigration.
Type ‘“emergency room” “illegal alien” closure’ into Google and you see what I mean. Remove “illegal alien” from the search and the first hit is an article making the same point I am. The unwillingness of politically correct discourse to admit the obvious. Unskilled immigration has significant negative externalities and little positive value. We “know” that unskilled immigration is only marginally valuable because Cowen/Tabarrok insist that the labor demand curve is essentially flat.
However, this is just one example of the larger problem. A long list of topics are publicly debated in this country without using the “I” word. Yet the “I” word is at or near the core of many of these topics. A few examples would include declining public education (why exactly are California’s schools so bad), declining wages (just in case the labor demand curve isn’t flat), unaffordable housing (cheap labor should make California’s housing affordable…), gridlock (not in California of course), crime, the growing uninsured population, Medicaid burdens, taxes, air & water shortages, foreign oil dependence, etc.
All of these issues are more or less immigration problems. Some more (education, wages, housing), some less (oil dependence). However, none can be reasonably understood without careful consideration of the immigration component. Yet, the “I” word is no where to be seen.
Posted by: Peter Schaeffer at Jun 17, 2006 10:10:17 AM
Peter, do note I blogged this problem of immigration and emergency rooms -- and it is a real one -- a few weeks ago.
Tyler
Posted by: Tyler Cowen at Jun 17, 2006 10:39:43 AM
Interesting post. If you blogged on immigration and emergency rooms a few weeks ago, I missed it, so I'm glad you blogged about the topic again. Tragedy of the commons it sounds like.
What about using a voucher system for emergency care. Every citizen in the United States could be allocated a coupon for emergency care. Coupons could each buy you $x worth of emergency care. Families of 4 would receive coupons, etc. Make the vouchers transferable so that markets could move the vouchers to those who need them the most. And you could even make it so that citizenship is only a precondition for receiving the initial allocation, but make non-citizens able to buy (and sell) them on the market.
Posted by: Jason Voorhees at Jun 17, 2006 10:52:20 AM
quote:
["Every citizen in the United States could be allocated a coupon for emergency care. Coupons could each buy you $x worth of emergency care."]
...and how would you calculate the 'supply' of "emergency-care" (current & future) when issuing your $x vouchers ?
How would you calculate/control/guarantee the 'quality' of that 'supply' ?
What penalties would you impose against the suppliers & users of your voucher-system ... if they misused or did not comply with that system's rules ?
How would you calculate your administrative/legal 'cost' of ensuring a satisfactory 'supply' system, and policing the overall system ?
Where would you get the money for your system ?
What is the probability that your system would work as you envison it ?
Posted by: Dennis at Jun 17, 2006 12:09:21 PM
... allocated a coupon ...
This is your brain on illegal immigration. How about using credit cards for emergency care? No silly gov't allocation required.
Posted by: Mike Linksvayer at Jun 17, 2006 1:11:42 PM
Are any of you willing to return to pre-1986 policy, when emergency rooms were not obliged to treat all comers?
Absolutely.
- Josh
Posted by: Wild Pegasus at Jun 17, 2006 2:30:14 PM
...and how would you calculate the 'supply' of "emergency-care" (current & future) when issuing your $x vouchers ?
Do you mean how much money would the government be willing to subsidize free emergency care? Insofar as its a policy goal, the government would need to estimate the demand for low income emergency care, and create vouchers corresponding to that aggregate number. Issuing as the vouchers are enforceable, excludable and transferable, then sellers will sell emergency care to redeem the coupons.
How would you calculate/control/guarantee the 'quality' of that 'supply' ?
If emergency care is a competitive market, and if people prefer quality care, then it should be provided up to the point where the marginal costs of providing it are equal to the marginal revenue gained from a coupon, just like any market, right?
What penalties would you impose against the suppliers & users of your voucher-system ... if they misused or did not comply with that system's rules ?
I'm not sure what rule-breaking you're talking about. Fraud and counterfeiting of vouchers?
How would you calculate your administrative/legal 'cost' of ensuring a satisfactory 'supply' system, and policing the overall system ?
Unless I'm missing something in your objections, issuing vouchers that can be redeemed, and assuming the market is competitive, will cause the sellers with least cost to provide emergency care. Markets lead low-cost providers into the market and escort the high-cost providers out, so shouldn't the market outcome be the one with lowest cost? Households will be selecting their provider, too, keep in mind, not administrators.
Where would you get the money for your system ?
Well, before I answer this, note that it sounds like from what Tyler said that the US government already has made it a policy objective to provide emergency care to low income families. To do this, they're going to have to do more than simply put price caps on what emergency hospitals can charge, though. If they put price caps at zero, not only does this create a moral hazard problem for people who may overuse emergency care, take unnecessary risks, or sub-optimally invest in insurance, but it may lead to sellers leaving the market altogether, which is what it sounds like Tyler is describing to me. So, if the stated goal is to provide emergency care to poor families, and assuming efficient allocation of emergency care is our goal, then pricing the care is an important starting point. Vouchers have been used successfully in other markets, such as tradable pollution permits, and have the advantage of letting the low-cost providers remain.
So, to answer your question, the money has to come from the state. How they fund that is another matter altogether, but if the state has already made it their goal to provide emergency care to poor families, then markets may get them there without suffering the negative effects from price controls. That's my point.
What is the probability that your system would work as you envison it ?
Markets work pretty well all the time. Since emergency care is a scarce resource, it sounds like markets might help allocate them without causing the supply side to disappear. Transferring money to households is going to have the least cost to the system, and will create incentives for firms to provide emergency care, assuming the property rights are well-defined.
Of course, I'm just throwing all this out there. I don't immediately see why this would be so different from pollution, or education vouchers, or any other kind of thing like that. Emergency is a scarce resource; markets allocate scarce resources.
Posted by: Jason Voorhees at Jun 17, 2006 4:59:38 PM
... allocated a coupon ...
This is your brain on illegal immigration. How about using credit cards for emergency care? No silly gov't allocation required.
Apparently, enough people in the country want provision of emergency care to poor families. I'm not making that up. If the US government has a stated policy goal of doing so, then vouchers will do the job better than price ceilings. Come on man, this is Marginal Revolution. I'm stating the obvious here.
Posted by: Jason Voorhees at Jun 17, 2006 5:01:57 PM
Virtually unpriced ER care certainly is a tragedy of the commons, but immigration legal or otherwise is not to blame. The 1986 rule change for ER care making it a commons likely accounts for much of the shortage of ERs as well as higher costs for other medical services. Similarly, with education, the U.S. has compulsory education laws that require every child to attend school and because public schools are "free," where do you think poor immigrant families will send their children. Immigration is not the problem, unpriced resources are. If compulsory care and attendance laws were done away with, we wouldn't see overuse of resources on such a scale and all of us (natives, immigrants) would learn a valuable economic lesson--there's no such thing as a free lunch or education or hospital visit.
Posted by: TP at Jun 17, 2006 5:41:34 PM
I posted about this a day or two ago, from USAToday I think.
http://amateureconblog.blogspot.com/2006/06/emergency-medical-care-listed-in.html
Posted by: Christopher at Jun 17, 2006 7:25:09 PM
I don't think much of the voucher idea. It looks to me like it solves little or nothing and creates a large administrative burden. What is the difference between vouchers and direct government subsidy of hospital ER's? If the claim is that market forces will significantly improve care I don't buy it. After all, in emergencies the best care is often simply the closest. And if there are choices, and the patient is in position to choose, it seems doubtful that the information available will lead to optimal choices.
And some problems won't go away. What will you do when someone shows up at the ER without a voucher (or unconscious, so you can't tell)? Do you expect someone in need of emergency care to go buy vouchers before coming in?
In general, the reason people don't have health insurance is the cost. Financial concerns will motivate voucher sellers also, and we will be back with the problem of uncompensated care.
Posted by: Bernard Yomtov at Jun 17, 2006 7:28:55 PM
I don't think much of the voucher idea. It looks to me like it solves little or nothing and creates a large administrative burden.
Would the administrative costs be significant? My understanding of the tradeable permits experiments was that these costs were low. It's been a while since I've read that literature so I may be wrong, but my understanding was that the market approach had lower administrative costs, not more, since it was unnecessary to monitor the trades, only the initial allocation.
What is the difference between vouchers and direct government subsidy of hospital ER's? If the claim is that market forces will significantly improve care I don't buy it.
Pricing the common resource is needed, however it's done, if the policy goal is to provide emergency care to the least well off of society. Otherwise you end with tragedy of the commons - crowded emergency rooms and emergency care declining. Vouchers force consumers to pay a price for their care, which sounds like is not currently taking place. Subsidizing hospitals directly does not - at least as I'm thinking about it - address that problem.
A voucher should, in principle, provide incentives to innovate to keep costs lower. Innovation is one manner by which sellers are competitive. A voucher therefore would provide some incentive for firms to keep costs down.
After all, in emergencies the best care is often simply the closest. And if there are choices, and the patient is in position to choose, it seems doubtful that the information available will lead to optimal choices.
The market would presumably be national, not local, even if choice of emergency care was local. The goal would be to price demand in order to allocate the emergency care more efficiently.
And some problems won't go away. What will you do when someone shows up at the ER without a voucher (or unconscious, so you can't tell)? Do you expect someone in need of emergency care to go buy vouchers before coming in?
Probably not. Unless purchases can take place at emergency rooms.
In general, the reason people don't have health insurance is the cost. Financial concerns will motivate voucher sellers also, and we will be back with the problem of uncompensated care.
I agree about that reason. But, as the problem was stated, it sounded like a typical common resource problem. The good is non-excludable, since anyone can use it. This probably leads to some moral hazard. The price controls also mean that you should expect excess demand of the good, which could be what is going on with declining emergency care. The voucher idea I proposed is just a thought I had in reading Tyler's post, because it addresses both of those fundamental problems. It would make the good private again, and force people to pay prices for their use, which should make them take more precautions ex ante from accidents and be selective in when they choose to use emergency care and when they do not. How many cases that go to emergeny care are non-emergency cases?
But the point I made was that the initial allocation could be according to some fairness rule - issue emergency care coupons bi-annually, one per citizen, including children. Let people trade them. This does provide at least some lower income people with emergency care initially.
I'm not sure whether this would work for the most extreme cases, like homeless people. For those people with significant discount rates, they may be willing to trade their coupons on the market every time they get it. But, the general rule is that some sort of pricing should be introduced in order that the scarce resource gets to its highest valued use, and in order that low cost providers remain in the market.
Posted by: Jason Voorhees at Jun 17, 2006 8:12:48 PM
I'm sure there's plenty of folks(but a minority of the U.S. population, to be sure) who are absolutely chomping at the bit to go back to the pre-1986 policy. Whatever the validity of the arguments pro or con, however, it's simply not going to happen. We have a sort of de facto situation of universal care. I'd argue that it's an inefficient and wasteful system, and that if we're going to have universal care we might as well try to do it a bit better. The emergency room is the most expensive place to treat anything. What if everyone waiting in the emergency room right now had a primary care physician? Would the wait times drop in half? I don't know, but I'm sure it would be a significant drop.
Going from what we have now to a single payer health care system would be trading one set of problems for another. In its favor, single payer health care compares favorably to the U.S. system in all measures of public health and it's cheaper. I think that as long as we're going to have a universal care system we might as well try to do it for less.
Posted by: MjrMjr at Jun 17, 2006 8:25:39 PM
Just a few comments:
I thirty years I can never remember the IOM issuing a positive report on any aspect of the health care system.
In case of a epidemic or pandemic the entire hospital will likely go into a different mode of operation (e.g., no elective surgery) and so it really is not an ED problem per se (in healthcare we call them Emergency Departments, on tv they are ER).
Hospitals have disaster plans but no hospital can ever claim to be fully prepared becuase no one knows what the disaster will be (plane crash, train wreck, chemical leak, NBC terrorism).
I think you are trying to discuss EMTALA and pre-EMTALA, but this is hardly a thorough discussion based on one article. There are numerous complex issues involving hospital privileges and on-call status for physicians, especially specialists (orthopaedists, neurosurgeons, etc.) who take most trauma call. There are also complex issues regarding involving transfers up the care chain, i.e., should a pelvis fracture be reduced and pinned in the community hospital or in a university medical center.
Yes, EDs are overutilized, this too being a complex issue of access to primary care, after hours and weekend care, lack of insurance and etc. Major problem.
Posted by: save_the_rustbelt at Jun 17, 2006 11:07:44 PM
"Emergency medical care in the United States is on the verge of collapse, with the nation's declining number of emergency rooms dangerously overcrowded"
This may be true in some areas. But there are many hospitials where I live where the ERs are seldom crowded and the facilities and care are outstanding. I would venture to say that this is true in most areas of the US. I am sure there are exceptions, like along the southern border or near poor areas of major cities. But I would say the quote above is overly alarmist.
Posted by: Dan Morgan at Jun 18, 2006 12:24:43 PM
Jason,
I think you are trying to solve two problems with one solution. Nice if you can do it, but I don't think you have here. The first problem is the cost of uncompensated care delivered by emergency rooms, whether in true emergencies or not. The second, which much worsens the first, is the use of emergency rooms for non-emergency care.
Eliminate or reduce the second and you have gone a long way towards solving the first. So maybe we should give vouchers for ordinary office visits and other routine care, or even have another system - like insurance for example - that lets people get problems looked at elsewhere than in the ER.
You argue that the ER is a free resource (to some people), so it suffers from a commons problem. But this is not really true once you reduce non-emergency cases sharply. There is a cost to going to the emergency room, even if the care is free. It's unpleasant, and you have to have an emergency, which is not fun. Nobody sits around and says, "I have nothing to do tonight, so I guess I'll get in a car wreck and take advantage of free emergency care." It's not like free food.
Now certainly, if the care is free there will be people who, at the margin, will decide that something is an emergency that isn't, but how big a problem will this be?
Posted by: Bernard Yomtov at Jun 18, 2006 4:35:13 PM
Some hospitals are using a triage system that shulffles non-emergent cases to a minor care clinic staffed primarily by Nurse Practitioners and Physicians Assistants (the physicians are across the hall if needed).
Not a solution but a help.
Financing of indigent care is the real 800 pound gorilla.
Posted by: save_the_rustbelt at Jun 18, 2006 9:22:28 PM
"I would venture to say that this is true in most areas of the US"
The article gave actual numbers, on closing ERs and shrinking bed space, and 73% of surveyed ERs on a Monday evening having two or more patients stuck in a hallway. I'll go with the statistics, not your anecdote. I'd also note that it's not ER/area but ER/population which matters.
As far as anecdotes go, Cook County Hospital (Chicago area public) is cutting its beds by 25%.
Posted by: Damien at Jun 19, 2006 1:40:51 AM
Bernard, right. My proposal depends on the problem being a commons problem. And, presumably emergencies are things that cannot be planned very well. A few thoughts.
1. If the price of an emergency is zero, then it does lower the cost of various risky activities at the margin. Therefore, there is a moral hazard problem created by unpriced emergency care. The degree to which this is effective depends upon things like the elasticites of demand for risky behaviors. There is also simple uncertainty which if I understand Frank Knight correctly will stay the same regardless of these prices. Still, pricing emergency care should influence some risk behaviors.
2. Pricing emergency care also would deal with the shortage problem, insofar as it was a realistic mechanism where real transfers to sellers can occur. Even if demand for emergency care is inelastic, supply is not. More doctors can be hired, rooms can be expanded. So, pricing the scarce resource should expand supply even if it has no affect on demand due to the inelastic demand for emergency care.
3. All of this is assuming there are some kinds of market failure in regards to the provision of emergency care and/or US policy is driven by normative rather than economic arguments. I'm not making the argument that the government should be providing emergency care to low income families, but if they do decide to do that, then they do need to price it otherwise it does become a tragedy of the commons with potential moral hazard. So, assuming that, shouldn't we be thinking about market allocations?
Posted by: Jason Voorhees at Jun 19, 2006 8:56:38 AM
"I think that as long as we're going to have a universal care system we might as well try to do it for less."
The risk in going into a universal care system would be an expansion of government regulations on medicine that might dry up the supply of new drugs, for example.
De-regulation and outsourcing of medicine will reduce costs, or at least free up people to pay enough for the amount of care they want and can afford.
Posted by: Mr. Econotarian at Jun 19, 2006 10:21:07 AM
Jason.
there is a moral hazard problem created by unpriced emergency care. The degree to which this is effective depends upon things like the elasticites of demand for risky behaviors.
My guess is that this elasticity wrt price is extremely low. Elasticity wrt availability of emergency care is probably a little higher for some things, like risky hobbies. But overall this is surely a small part of the problem. Knowing that care is available if needed might induce you to go rock climbing or something, but will it make you more inclined to drive drunk?
Even if demand for emergency care is inelastic, supply is not. More doctors can be hired, rooms can be expanded.
Yes, but subsidies would also increase supply.
I'm not making the argument that the government should be providing emergency care to low income families, but if they do decide to do that, then they do need to price it otherwise it does become a tragedy of the commons with potential moral hazard. So, assuming that, shouldn't we be thinking about market allocations?
I do think we should provide emergency care to low income families. What I was saying is that I doubt the commons problem would be severe, if ER's really were only used for emergency care. And if it is created by low-income patients who have no alternative sources of non-emergency care, perhaps the solution is to provide such sources.
Posted by: Bernard Yomtov at Jun 19, 2006 10:46:27 AM
My guess is that this elasticity wrt price is extremely low. Elasticity wrt availability of emergency care is probably a little higher for some things, like risky hobbies. But overall this is surely a small part of the problem. Knowing that care is available if needed might induce you to go rock climbing or something, but will it make you more inclined to drive drunk?
Probably. But at the margin, some people will be impacted by a zero price on emergency care. Raise the price of emergency care, and the expected value of certain activities will change. Either that means the people will change their ex ante behavior or they'll change their ex post behavior. Either way, the only people who go to receive emergency care will be people whose willingness to pay for care is greater than the coupons' values. Some people will select to wait and see. Some people will have taken more precautions ex ante and avoided the accidents altogether. And some people will still be the victim of drunk driving, regardless.
Yes, but subsidies would also increase supply.
Yes, but subsidies don't address the externalities created by over-consumption. In fact, it could amplify the problem, since extending supply while holding price at zero would still lead to a longrun shortage of care combined with more commons problems. It's not enough to extend supply if you never address the price problem, otherwise the care won't be allocated appropriately.
I do think we should provide emergency care to low income families. What I was saying is that I doubt the commons problem would be severe, if ER's really were only used for emergency care. And if it is created by low-income patients who have no alternative sources of non-emergency care, perhaps the solution is to provide such sources.
I think I agree for the most part that if ER was used only for emergency care, then the problem would not matter as much. The question is whether price caps at zero induce non-emergency users into the emergency rooms, and crowd out the legitimate needs. It sounds like the commons problem causes a mixture of types in the emergency rooms, not all of whom need critical care. Some mechanism is needed to separate the two types. One possibility is a voucher system. There's an equity-efficiency tradeoff with that, but hey what else is new. At least it deals with the two problems noted - the pooling and moral hazard problems, and the excess demand problems among hospitals.
I am not well read in this area, so Im going just off what Cowen had linked to. To the degree that some people sort themselves into emergency rooms who don't need to be there and/or some people respond to the deflated prices by increasing their risk consumption at the margin, subsidies won't do anything to counter that. It's ultimately an empirical question, I grant, as to whether those demand problems are there. But to the degree they are, then what except for a price is going to address them?
Posted by: Jason Voorhees at Jun 19, 2006 2:31:01 PM
One possible solution is the commercailization of clinics (my wife get here eye exam and contacts at Wal-Mart).
The biggest problems with emergencies, pseudo-emergencies and illnesses in general are:
1) they are quite random
2) the patient cannot always tell the difference
3) anything outside of normal business hours for physician offices tends to be steered to the Emergency Department (often by family practice docs who are already sleep deprived from being on call).
Posted by: save_the_rustbelt at Jun 19, 2006 3:11:07 PM
Jason,
I'm not advocating that all emergency care be free. Most people have insurance, so their use of ER's is subject to the same costs as other medical care. The way I view the problem is that much of it is caused by non-emergency use by uninsured individuals, because for them it may be free. Provide other ways for these people to get care and you have reduced the size of the problem greatly.
What are you left with? Well, the use by those with insurance presumably is not a problem, so it's legitimate emergency use by the uninsured. Not having some allocation in place would, I concede, tend to increase this. But I think the excess use would be small for precisely the reasons I cite above. It does not seem to me that setting up a voucher system to deal with it is worthwhile. I disagree with you both as to the complexity of such a system, its benefits (we are still going to treat people without vouchers - so what do they accomplish?), and the savings they would produce in any event. Lots of problems have no perfect solutions.
Posted by: Bernard Yomtov at Jun 20, 2006 11:52:10 AM
lust verpleegster ^^^ blonde actie op kantoor ^^^ spavaldo amatoriali ^^^ comfortable allievo ^^^ osseuse cliche ^^^ la plus jolie flic amour ^^^ premier quarante trois ^^^ maman ejaculation ^^^ afabile lesbiche ubriache ^^^ funny cowgirl masturbate ^^^ hapnadsvackande amator full ^^^ kaninaktig snut tillverkningen alska ^^^ di bell aspetto agente di polizia sex ^^^ soprannaturale giovane ubriache ^^^ bukkake vieux vagin ^^^ heet liefste maagdelijk ^^^ naken bigpenis orgasmi ^^^ kalu wwwsilkki ematin ^^^ varmest fantastisk paps ^^^ het hanlig jomfru ^^^ hetere mork ^^^ kjolig vidunderlig sonn ^^^ akreos erasitehnis praxi ^^^ exipnos xanthos piomenos ^^^ fils anal ^^^ le plus froid mama film ^^^ tolmiros diplo ^^^ tolmiros karfoma ^^^
Posted by: levan at Sep 8, 2006 6:08:32 AM
