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Freeing up Space (and Money) in the Emergency Room

A surefire way to cut health-care costs is to steer frequent ER visitors to less costly care.

The tipping point, wrote author Malcolm Gladwell in his best-selling book of the same name, is “the moment of critical mass, the threshold, the boiling point” when “ideas and products and messages and behaviors spread like viruses do.” It appears that point is near for a highly successful program that targets frequent emergency room users.

Over the past few years, a number of states, cities and counties have come to the same conclusion: identifying those who use the emergency room the most and steering them to less costly care elsewhere saves money for everyone.

Kelly Harder, now the director of Dakota County Community Services in Minnesota, had an “aha moment” five years ago when he was director of human services in rural Steele County, south of the Twin Cities. He heard about the financial pressure the community hospital faced caring for uninsured and underinsured patients in the ER and, adhering to the 80/20 rule, knew that a few people likely accounted for most of the cost. A quick glance at those patients revealed they were often the same folks Harder dealt with in other human services programs. “They were all struggling with the same life stressors, like poverty, homelessness or lack of transportation,” says Harder.

At the time, Harder had just established a program to reduce recidivism in local jails, in which a social worker helped parolees find housing and jobs. “We had success with that,” he says, “[so] why wouldn’t that work in the ER?” In 2009 he brought together the hospital, the county-based managed care organization (MCO) and the state to fund the Hospital In-Reach Program. For $75,000, the program hired a social worker and set up an office to track “frequent users” of the ER for one year. The hospital and MCO each ponied up 45 percent of the cost, the state the remaining 10 percent.

The social worker’s job was to steer the ER’s most frequent users toward primary-care doctors when appropriate, answer questions about medications, make sure patients had transportation to get to their appointments, get them into chronic care case management programs and use a variety of other strategies to ensure they receive proper care without resorting to ER visits.

“When Kelly brought this to us, it was a perfect fit for what we try to do in the county, which is to connect different agencies and players to leverage all the resources,” says Tom Shea, Steele County commissioner. “This is a problem that everybody recognizes, but it’s the collaboration that makes it solvable.”

The hospital tallied a 39 percent decrease in ER claims and hospital admissions dropped 44 percent for a cost avoidance of $272,849, while the MCO saw reductions in ER claims and hospital admissions for a total savings of $141,462 -- a combined return on investment of about 450 percent.

These numbers echo similar in-patient assistance programs in other areas:

• California: The Frequent Users of Health Services Initiative, a five-year project funding six California communities, has reduced ER use by 35 percent during the first year of the program and 61 percent during the second year. The savings for that second year alone were $10.3 million.

• Seattle: Plymouth Housing Group’s one-year program saw an 88 percent decrease in hospital admissions and a 74 percent decrease in ER visits. Overall savings were approximately $1.5 million during the first year, about four times the $372,000 cost of the assistance program.

• Boston: When chronically homeless patients, who averaged 32 ER visits per year, were found housing, their average annual health-care costs were $6,056 compared to $28,436 for those not housed.

This spring, Harder approached state Rep. Patti Fritz about sponsoring a bill authorizing medical assistance reimbursement for in-reach care coordination programs statewide. As a licensed nurse and welfare advocate, she jumped at it. Despite Minnesota’s legislative lockdown this summer, the bill managed to pass. “I said at the legislative hearings that health-care reform has many components,” Harder says. “This is one sliver, one strategy that improves quality and decreases overall costs.”

The Hospital In-Reach Program One-Year Pre/Post Analysis

Allina Hospital in Owatonna, Minn., tracked 24 individuals for one year prior to the start of the program and for one year after its start. There was a 39 percent decrease in emergency department visits and a 44 percent decrease in hospital admissions.

Cost Savings
In Emergency Departments: $163,451
In Non-Emergency Departments: $109,398
Total Medical Savings: $272,849

South Country Health Alliance, a county-based managed care organization, tracked 14 individuals for one year prior to the start of the program and for one year after its launch.

Reduction in Paid Claims
Emergency Department Visits: $43,398
Hospital Admissions: $97,064
Total: $140,462

Caroline Cournoyer is GOVERNING's senior web editor.
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