FACTORS ASSOCIATED WITH CLOSURES OF EMERGENCY DEPARTMENTS IN THE UNITED STATES

Introduction

As the only place in America’s healthcare system that serves all patients, emergency departments (EDs) are the “safety-net of the safety-net.”¹ Federal law requires hospital EDs to evaluate and treat all in need of emergency care regardless of ability to pay.² Although only 4 % of America’s physicians work in a hospital ED, they provide more acute care to Medicaid beneficiaries and the uninsured than the rest of America’s doctors combined.³

Recently, the US Congress enacted legislation to promote regionalization of emergency care, to increase efficiency and improve outcomes.⁴ Despite recognition that emergency care is an essential health benefit,² no federal law ensures the availability of hospital emergency departments.

The number of hospital-based EDs declined 3.3 %, from 4,771 to 4,613 between 1998 and 2008. In this same period, ED visits grew by 30 %, from 94.8 million visits to 123 million visits annually.⁵ ED use by publicly-insured and uninsured patients grew at an even faster pace, largely driven by loss of access to care in other settings.³

Market forces strongly influence access to health care in the United States; however, little is known about risk factors associated with ED closures. We hypothesized that market forces are strongly associated with the ability of an ED to remain open. We analyzed factors that might be associated with the closure of hospital emergency departments, including hospital, community, and market-level characteristics.

Methods

Results

In 1990, our sample contained 2,446 hospitals with EDs in non-rural areas. By 2009, that number had declined by 27 %, to 1779 across the US (Figures 1 and 2). Over the study interval, 1041 EDs closed, or an average of 89 per year. Of the 1041 ED closures, the majority (66 %, or n= 690) were due to the closure of an entire hospital that operated an ED. The remaining 34 % (n=351) were closures of EDs alone where the hospital stayed open. During the study interval, 374 EDs were opened. There was therefore a net loss of 667 non-rural EDs during 1990–2009. The overall sample analyzed (1990–2007) included 2,814 hospitals, contributing a total of 36,335 hospital-years to the analysis.

We found significant differences in the characteristics of local hospital markets and the facilities. (Table 1). Ten percent of hospitals that closed their EDs met our criteria for safety-net centers, compared with 6% of those that kept their ED open. Closed EDs were more likely to be for-profit than EDs that stayed open (26 % vs. 16 %, p<0.000). Smaller facilities were more likely to close their ED (closed EDs reported a mean of 22,404 annual visits, compared with 33,691 in open facilities, p<0.000); and twice as many hospitals that closed their EDs were in the lowest quartile of the profit margin distribution, compared with those that kept their ED open (p-<0.000). We also found that EDs that closed tended to be located in counties with high shares of minorities (36 % vs. 31 %, p=0.005), high shares of populations in poverty (37 % vs. 31 %, p<0.000), and greater than 15% of uninsured in the community (42 % vs. 36 %, p=0.002). Thirty-four percent of hospitals that closed their EDs were in highly competitive markets, compared with only 17% of those with EDs that did not close (p<0.000).

Figure 3 shows the observed Kaplan-Meier survival curves of EDs by the following characteristics: safety-net status, ownership status, profit margin, and poverty level. Figure 3 shows that at the end of the study period, the cumulative probability of an ED remaining open among safety-net hospitals was about 50%, compared with 74 % among non-safety-net hospitals. In terms of hospital ownership, the cumulative survival probability for an ED to remain open was 50% among for-profit hospital compared with 75% for the other two ownership types. Similarly, EDs at hospitals with negative profit margin (i.e., the lowest quartile of profit margin distribution) had a cumulative probability of remaining open of 50% compared with the 75% cumulative probability of remaining open for EDs at hospitals in the other 3 quartiles. EDs in hospitals in counties with a high share of the population below poverty (upper tertile) had a lower cumulative probability (70%) of remaining open compared with hospitals serving a low share of population below poverty.

Comment

Our nationwide analysis of ED closures between 1990 and 2007, identified several risk factors for closure of emergency services that suggest economic drivers are associated with ED closures. Hospital specific characteristics related to higher risk of closure were safety-net status, for-profit ownership, and low profit margin. After controlling for demographic and market factors, safety-net hospitals are at higher risk of closing their EDs compared with non-safety-net hospitals, suggesting that safety-net hospital status reflects other pressures that, although less measurable, are associated with ED closure. For example, some EDs have difficulty maintaining a full on-call specialty panel due to unwillingness of specialists to cover emergency call, especially for poorly insured patients.^33–35 While this particular finding deserves more study, it signals that safety-net hospitals may require particular attention if emergency care access is to be sustained.

Hospitals in counties where a high proportion of residents live below poverty were more likely to close their EDs than hospitals in more economically secure communities. Factors such as crowding and the increasing challenges of providing high-quality care in the face of burgeoning demand could contribute to difficulty in recruiting and maintaining staff at all levels. These community characteristic findings are especially compelling, given that vulnerable populations including minorities, the uninsured, and under-insured patients use EDs for acute care at greater rates than other populations.^36,37 As more of these patients lose access to primary care, an increasing number of EDs are meeting criteria as safety-net facilities,³⁷ this suggests that more EDs may be at risk of closing in the future. ED closures can have substantial effects on vulnerable communities, causing a decline in care as hospitals serving populations below poverty and minorities select to provide services based on profitability rather than community health needs.³⁸

Local market competition is strongly associated with the ability of an ED to remain open. The presence of other EDs within a 15-mile radius and highly competitive markets are both associated with increased risk of ED closures. Previous literature reported that emergency services in areas with poor payer mix are often money-losers.¹⁸ Our study extends this, showing that market forces, beyond profit margin alone, are substantially related to the ability of an ED to remain open.

Our findings expand the evidence base by showing that economic factors related to ED closures are similar to those related to hospital closures, and may be even stronger.^18,39 All factors (except for the increased risk of hospitals serving a higher proportion of patients in poverty) identified in our study can be shown to be market-driven. Profit margin, for example, is influenced by a number of factors ranging from patient payer mix, reimbursement decisions from payers (and negotiated discounts between hospitals and payers), to competition. Market factors may also be the reason that many for-profit hospitals choose not to provide emergency services.

In some areas, the episodic closure of EDs may be of little consequence, particularly in competitive health care markets where nearby facilities can deliver the needed clinical care for patients who seek ED treatment. Some might assert that such “creative destruction” is a manifestation of a healthy marketplace. However, the market economics of US health care, particularly emergency care, are distorted by the fact that 51 million Americans lack health insurance, and another 48 million are covered by Medicaid and other forms of public insurance that reimburse well below cost.⁴⁰ With health care reform, the numbers of people on Medicaid and other forms of public insurance are likely to increase substantially, with far-reaching implications if these patients cannot access timely and adequate care. In most of the US health care system, an effective business strategy is to minimize uncompensated costs by declining to treat these patients, but EDs cannot do so.

The economic challenge of operating an ED in the face of a federal obligation may explain, in part, why for-profit hospitals were twice as likely to close their EDs as facilities that are non-profit or publicly owned. It may also explain why hospitals in the lowest quartile of profitability (essentially, negative profitability), and those in highly competitive markets were more likely to close their EDs. Yet, even after controlling for these and other characteristics, we observed that safety-net hospitals were significantly more likely to close their ED than hospitals that did not serve this role.

The closure of an emergency department can have profound repercussions for a community.^41–43 Closures can adversely affect access to emergency care for everyone – insured and uninsured alike.⁴¹ Hospital closures significantly affect access to care not only by increasing the distance to the nearest hospital but also by increasing the patient load at neighboring hospitals.⁴⁴ ED crowding degrades quality of care, not only by prolonging patient waiting times and increasing the rate of patients who leave without being seen, but in terms of outcomes, including increased rates of morbidity and mortality.^45–47 Because Medicaid, SCHIP, and uninsured patients are highly reliant on hospital emergency departments for acute care,³ ED closure can displace tens of thousands of uninsured and low income patients to other EDs, worsening crowding and potentially setting the stage for additional closures.^48–50

Our analysis has several limitations. We were only able to analyze factors that are regularly quantified across hospitals and communities. A decision to open or close a hospital or its ED may depend on a wide range of factors, including political considerations, community pressures, local philanthropic support, and a hospital’s ability to fill its bed with non-ED admissions. We also did not examine federal hospitals, such as those operated by the Veterans Administration, which provide ED access to certain populations. Also, our financial data and analysis of risk factors associated with ED closures are based on data through 2007, the most recent year for which complete data were available. We suspect that with the economic recession that following in subsequent years, some hospitals most likely faced increased financial pressures that may have influenced decisions regarding maintaining or closing their EDs.

It is critical to determine whether and how to engage society in decisions to maintain or close emergency departments and other safety-net services. Should such decisions be dictated strictly by market forces, or should other considerations apply?⁵¹ Calls for legislation to regulate the closure of hospital emergency departments were first made over 2 decades ago.⁵² Experience has shown that such measures are difficult to enact and even harder to implement. ⁵³ Although some might consider it prudent to require detailed patient outcome data before taking action to regulate ED closures, waiting to quantify these potential adverse consequences is far from ideal, especially because no government or non-governmental body is charged with monitoring and reporting these trends.

Our findings underscore that market-based approaches to health care do not assure that care will be equitably distributed.⁵⁴ In fact, the opposite may be true. As long as tens of millions of Americans are uninsured, and tens of millions more pay well below their costs, the push for “results-driven competition”⁵⁵ will not correct system-level disparities that markets cannot – and should not - be expected to resolve.

In summary, this study demonstrated that from 1990 to 2009, the number of hospital EDs in non-rural areas declined by 27 %, with for-profit ownership, location in a competitive market, safety-net status, and low profit margin associated with increased risk of ED closure.

Supplementary Material