Healthcare professionals often live in an echo chamber of like-minded, similarly educated, high-income earners.  We can forget that not everyone sees our world as we do.  A recent article by Financial Samurai, “Going To The Emergency Room Is Like Getting Two Kicks To The Groin,” reminded me.  The author is a prominent voice in the FI community, and I’ve often enjoyed reading his material.  He is intelligent, successful, and financially independent but has no medical background.  The title of his article jumped out at me, and after reading the content, I couldn’t help but write a comment, which turned into this article.    

     I teach residents and fellows in the ER that we do not typically see people at their best.  Every single patient and family member we encounter is having a bad day.  They are scared, in pain, worried about their loved ones, confused about what’s happening, or all of the above.  No one wakes up and says, “Let’s go to the ER today!”  

     Financial Samurai’s article demonstrates how confusing the US healthcare system can be to a layperson.  I recommend everyone reads his article as it gives you a perspective on how an educated, financially literate person interacts with our industry.

The Financial Samurai’s Article 

     The article discussed two trips to the emergency department for the author’s children.  One was incredibly necessary (anaphylaxis), while the other was not (nursemaid’s elbow).  The author discussed the financial fallout of the first visit, which led him to question the need for the second.  As an ER physician and an owner of urgent care clinics, I understand the author’s desire to care for his family while being financially responsible.  I will discuss the three main issues that led to his problems and offer five takeaways to help financially minded patients make the right decisions, regardless of their background.

Three Key Issues with Healthcare

          I’d like to start by saying that I know how irrevocably screwed up the US healthcare system is.  I try to do my part by writing about some of its problems in articles such as The Corporate Practice of Medicine Takeover and Contract Management Groups:  Get to Know Your Private Equity Owned Overlord.  I am happy to discuss ways to improve the system, but for the sake of this post, I’m simply highlighting a few issues pertinent to Financial Samurai’s article.    

1. The US Healthcare System is Financially Opaque 

       Try to go to a hospital-based emergency room and ask how much the visit will cost.  I dare you.  You will either be met with a blank stare or laughed at.  The sad reality is that no one working there knows, and they don’t even have a way to find out!  Consider the fragmented costs of an ER visit: 

  1. Transport Services:  If you took an ambulance, you will be charged by a company distinct from the hospital.   
  2. ER Physician Services:  What the ER doctor group receives.   
  3. Hospital Facility Fee:  Charge for keeping the lights on in the ER 24/7/365.
  4. Lab Services:  Bill for drawing and processing laboratory work.
  5. Medications/Interventions:  You are billed for every Tylenol, Band-Aid, and IV.  
  6. Radiology Bill:  You pay for any X-rays, CTs, Ultrasounds, or MRIs performed.  
  7. Radiologist reading services:  The radiologists bill separately for reading your images. 
  8. Consultant Fees:  If you need a consultant, there is a separate charge from that physician.

     Another issue is the fee-for-service model we use.  Generally, the more we do, the more we charge.  Specifically, the billing & coding rules designed by the government are so complex that most doctors don’t understand them.  Most ER doctors have only a vague understanding of their physician charges.  

     The final obscuring factor is the insurance companies.  Even if your doctor knows he is charting at a certain coding level and has access to the group’s fee schedule, he will have no idea about the agreements with each insurer.  At best, he could know the total charge but not what the insurance company had agreed to pay and, more importantly, how much of that would fall on the patient.  If this wasn’t confusing enough, federal and state NSA laws and their arbitration processes have recently poured black paint over an already opaque process.    

2. Medical Insurance is Needless Complex

     Do you have a PPO or HMO?  Are you on a high-deductible plan?  What is your deductible?  Have you met your deductible?  What is your Co-Pay?  Co-Insurance?  Out-of-pocket maximum?  Your local hospital ER may “take” your insurance, but are they in-network?  How about the ER doctors?  How about the radiologist reading your X-ray or the specialist who gets consulted?  Did you know that your deductible changes depending on in-network vs out-of-network status?  What is the difference between an ER and an Urgent Care?  What about a Free-Standing ER and a UC?   If you can’t answer all these questions, don’t feel bad.  Most doctors can’t either.  

3. It is Difficult to Get Useful Information on How to Navigate the System

     It is hard for the non-medical public to get guidance on where to appropriately seek medical care.  If your child is sick or injured, you can barely think straight.  Should you go to your primary care doctor, an urgent care, or the ER?  Most people don’t know, and our litigious society makes it hard to get a clear answer.  Call an ER to ask them a medical question, and you will hear some variation of “I can’t give any medical advice over the phone.  If you think you have an emergency, you’ll have to come in and be seen.”  Everyone is terrified of giving the wrong advice and being sued. 

Your primary care physician’s office likely has an after-hours voicemail telling you to go to the ER if you are worried.  In my area, we have a nurse hotline (###-68-NURSE) sponsored by two local hospitals that is supposed to help with this issue.  Nurses staff it to help answer your questions.  We call it 68-GoToTheER because that seems like the only advice they can offer.  

Five Tips for Financially Minded Patients 

        Outlining the problems with our healthcare system is enlightening but doesn’t offer the reader any solutions.  Here are five tips for the financially minded layman to assist them in maximizing their healthcare dollar.   

1. Know Your Local Health Care Options

     What options are available within a 5-mile radius of your home?  How about 25 miles?  In a true emergency, time matters.  If your condition is life or death, you always want to go to the nearest ER.  If they can’t handle it, they’ll stabilize and transfer you.  There are federal laws in place to ensure this.  In these situations, you shouldn’t worry about money.  However, most ER visits are not for immediately life-threatening conditions.  In fact, most are not emergencies at all.  

     According to data from the CDC, only 13.1% of patients seen in the ER are admitted to the hospital, with only 2% going to the critical care unit.  87% of patients are discharged.  These stats don’t imply that if you are discharged, you shouldn’t have been in the ER, but it is fair to say that 50% of ER patients could have been more economically treated elsewhere.  I work in a busy, high-acuity hospital.  Our admit rates are twice the national average.  Yet half of our patients are seen at “fast-track,” the ER version of urgent care.  

     For non-life-threatening conditions, you generally have time to travel to the most appropriate place to receive care.  Note this may not always be the closest facility.  Make a map of all ERs and urgent care clinics within your radius.  This map will be your starting point for Step 2.  If you don’t know the difference between an Urgent Care, Free-Standing ER, and a Hospital-Based ER, you can read about it at https://vitalcaretx.com/urgent-care-vs-er.  Keep in mind that not all urgent care centers are the same.  An UC owned by a hospital system can charge a facility fee of $1,000 or more, just as if you were seen in the ER.  If the UC in your area is owned by a hospital, call them to see if they charge a facility fee.  If they do, find another option that doesn’t.  

2. Understand Your Medical Insurance 

     The first step is to learn the answers to the questions I posed above.  You can find some on your insurance card, and a glossary of terms can be found at https://www.healthcare.gov/sbc-glossary/.  Many people in the FI community tout a high-deductible plan so that you qualify for an HSA, but understand that it’s like having catastrophic insurance only.  You’re paying for everything out of pocket unless something terrible happens.   

 

BCBC Healthcare
Healthcare Emergency Room Co Pay

     

Your insurance company’s network is the most important thing to understand if you want to save money.  Unfortunately, this may take some legwork on your part.  Start with which hospitals in your area are in network with your insurance company.  Next, call each hospital to ensure the emergency room physicians and radiologists are also in-network.  You may have to make several calls, get transferred a few times, and dig for this information, but stick with it until you have the answers.  Since most of your bills will come from the hospital, the one you choose must be in-network.  However, it would be great if you could find a facility where all three components are in-network.  

     Many other network concerns exist, but I consider those less critical in an emergency.  The trauma surgeon or the anesthesiologist may not be in-network, but if you need emergency trauma surgery, your life is on the line, and you’ll just have to deal with the cost.  That is what the out-of-pocket maximum is for.  For outpatient elective surgery, you have time to explore options.  

3. Have Someone to Ask

     Having someone to ask medical questions can help you choose the appropriate level of care for your illness or injury.  Your primary care physician will occasionally give you their personal phone number; if they are part of a large group, they might also have an after-hours number to call.  If you have a nurse or doctor in your family, they can be a great resource. 

Make friends with a doctor at your kids’ school, the gym, or church.  I answer these types of questions all the time.  Don’t abuse the privilege, but most of us don’t mind a legitimate question, especially if it’s on where to go.  I got a call recently from a neighbor who had fallen and hurt her ankle.  After listening to her story, I advised her to visit an UC, as this would be the most appropriate and economical option.  It took less than 5 minutes, and my kids will probably get extra candy from her next Halloween.  

     As I read the Financial Samurai’s article, I immediately suspected a nursemaid’s elbow in his child.  If he had my number, I would have advised an UC visit instead of an ER visit.  Even if it were something like a supracondylar fracture, unless it was severely displaced or swollen, it would be an outpatient treatment with orthopedic follow-up.  Having a trusted source to ask can save you time and money in seeking the most appropriate level of care.  

     If you don’t have anyone to call, go with any local resources, such as our 68-NURSE hotline.  While we joke about them, they likely save some people from unnecessary ER visits.    

4. Plan for an Emergency

     Everyone should have a logistical plan in case of a medical emergency, especially if you are concerned about your finances.  There are around 140 million ER visits in the US per year, or 42.7/100 Americans (1).  So, the odds are that you will need our services sooner or later.  If you follow steps 1-2, you know which hospitals and doctor groups close to your home are in network with your insurance company.  

Decide ahead of time where you will go in case of a severe injury/illness, write it down, and keep a copy in your wallet and on the refrigerator.  Step 3 prepares you to call someone for advice on where to go.  Choose an urgent care when appropriate, go to an ER when necessary, and never go to a Free-Standing ER.  Finally, how will you get there?  Who will watch your kids if you don’t take them with you?  Plan ahead so it’s easier to act rationally during an emergency.  

5. Have an Emergency Fund and Some Perspective 

     One of the basic tenets of personal finance is having an emergency fund.  Many in the FI community think of this as 3-6 months of expenses put away for a rainy day.  Well, get your umbrella.  An ER visit for a severe illness or injury is the definition of an emergency.  Financial Samurai did the right thing in immediately taking his child to the ER, as anaphylaxis can be life-threatening.

   We can discuss whether we should have universal healthcare coverage or if access to healthcare is a human right, but for now, we must deal with the reality of our current situation.  If someone asked you in the moment if you’d pay $5,000 to keep your child alive, you would absolutely say yes.  You’d pay ten times that much without blinking.  But afterward, when the adrenaline of the moment fades away, we understandably start stressing about the cost.  Accept that emergency healthcare in the US is expensive and be thankful that you have a fund to cover the cost and are alive to utilize it.    

   

Conclusion 

     A trip to the emergency department can be scary, confusing, and expensive.  There are no quick fixes to the US healthcare system.  We are currently patching a broken, obsolete machine.  While I can’t change the system, hopefully, this article has outlined some of the more obvious problems in the emergency medical system and offered some solutions for the financially conscious patient.  

    As an ER physician, I hope nothing bad happens to anyone, but if it does, I want to be there to help.  I also hope nothing bad ever happens to you or your family, but plan ahead just in case.  Being proactive is the key.  Once an acute illness or injury occurs, most people can no longer make rational decisions.  Having a written action plan will help you properly traverse the minefield that is our emergency medical system.   

     I’m happy that the Financial Samuri’s kids were ok.  After 20 years in the Emergency Room, nothing much affects me except dead kids.  The only times I have cried at work have been because of children dying.  Knowing that it happens and how devastating it is gives me perspective on the financial costs associated with emergency care.  Money can be replaced.  People can’t.  

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     Our purpose at Business is the Best Medicine is to teach medical professionals about personal finance and the business of medicine.  We believe if every physician and APP were FI, it would be easier to transform our healthcare system.  Financial independence equals the ability to speak out about the problems you face as a provider without fear of repercussions and the capacity to advocate for change.  Leave a comment or subscribe to our blog for more articles like this.  

References 

  1. https://www.cdc.gov/nchs/fastats/emergency-department.htm