Dirty White Coat

Unfunded Mandates: How ER Docs Bear the Cost of America's Healthcare Crisis

• Mel Herbert for FoolyBoo Inc

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Dr Gillian Schmitz former ACEP president and current vice chair of education at Naval Medical Center San Diego, examines emergency medicine's financial crisis and its consequences. She identifies the fundamental contradiction in how America treats emergency care as a universal right while funding it as a privilege, creating an unsustainable system where nearly 70% of ED patients don't cover their care costs.

• Former ACEP president with extensive experience in civilian and military emergency medicine
• Healthcare in America faces a fundamental conflict between right vs privilege approaches
• Nearly 70% of emergency department patients don't pay the full cost of care
• Insurance companies making billions while avoiding fair payment for emergency services
• Boarding and overcrowding have reached dangerous levels affecting patient safety
• Physician groups facing consolidation as independent practice becomes financially nonviable
• Potential solutions include better insurance accountability and reconsidering funding models
• Some physicians consider unionization and collective action as necessary steps
• Media portrayal through shows like "The Pit" helps public understand emergency medicine challenges

We need the public to understand how emergency care is funded – or not funded – and the impact of this unfunded mandate on the entire healthcare system. Without addressing the root cause, boarding, violence, and consolidation will continue to worsen.


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Speaker 1:

ask you to say that again who are you?

Speaker 2:

and what do you do? Hi Mel, I'm Jillian Schmitz, I am a professor at the Uniformed Services University and I currently am the vice chair of education at the Naval Medical Center, San Diego.

Speaker 1:

And you've had a sort of an interesting career. Tell us that you're not active military. Your husband is, but you started and ran a residency for like 11 years.

Speaker 2:

Yeah, so I've been in academics all of my career and I helped start a civilian residency program in San Antonio back in 2011. And we were there for a number of years. And then, because my husband was active duty military, I got interested in military medicine and working with our military residents, and so I worked for a number of years at Brook Army Medical Center, which is a combined Army Air Force emergency medicine residency program, and we just moved to San Diego about 18 months ago. So now I'm with the Navy residents at a four-year program in San Diego.

Speaker 1:

And you were also the president of ACIP. Was it 2020 or 2021?

Speaker 2:

2021. So I've been very interested in health policy and advocacy and that's sort of my way of combating burnout is trying to get involved and trying to make a difference and finding solutions to some of these vexing problems that face the specialty.

Speaker 1:

So you have some history with emergency medicine at the highest level. So this RAND study came out. I talked to Al Cicchetti and Peter Vecelio, dave Schreiger, and they're a little older than you and I in their 70s so they were able to talk about what emergency medicine was like practicing in the mid 80s. It was a really interesting conversation, but I wanted to get your take, having recently been the president of ASEP, about what you think are the take-home points from this RAND study.

Speaker 2:

I think the take-home points to me is the really fundamental question of is healthcare a right or is it a privilege? And we are a little schizophrenic in our country in how we address that. That for years we've been feeling like it is a right and you've heard several US presidents say well, if you need healthcare, you go to the ER. They'll take care of you anywhere, anytime, anyplace, and that is our privilege and our honor of emergency physicians to do that. But we've been funding it as if it's a privilege and those two tenants are really incompatible at best and really you know at this point you know incompatible.

Speaker 2:

And we've said for decades that we are the safety net of healthcare in the United States. But that safety net has become so frayed that we now have giant holes in that safety net that it's really loose threads. We're seeing hospitals closing, physician groups consolidating and I think all of the long-term aspects of boarding, overcrowding, violence in the emergency department, consolidation those are all the aftermath of really how we finance healthcare and this report just a couple hundred pages of light reading really strikes a chord of. We need to figure out how to pay for EMTALA and this unfunded mandate that we've somehow subsidized for the past couple of decades is no longer sustainable and if we don't find a solution to this, healthcare and access to emergency care as we know it will fall apart.

Speaker 1:

There's a new dog in town, and when you were ASIP president, you probably spent some time talking to a lot of Congress people and had a sense of where things might go. Do you have a sense now where things might head now in terms of our current administration?

Speaker 2:

I don't think anyone knows the answer to that question. I do know that there isn't really an appetite for providing more funding for healthcare. If anything, the government is trying to make cuts and there's a couple of bills being proposed right now that would tie Medicare to at least inflation, which would be a step up from where we are now. We'll have to see, you know, ultimately, if that passes Congress. But the problem and the way I kind of oversimplify it for my residents is you know, obviously every emergency department has their unique payer mixes. But if you could take all 5,500 emergency departments in the country and put them into one big pie chart and you look at who comes to the ED and how is it paid for, over two-thirds of our patients do not pay the cost of care.

Speaker 2:

Let that sink in for a second. How would any other business stay open if, if two thirds or nearly 70% of their customers didn't pay for the cost of services? It's like if they've told you Mel, you know you have to open up a McDonald's and people are hungry and we want you to give them free hamburgers. We're not going to pay you for it, but you have to do it. It's a mandate and if you don't, we're going to fine you for tens of thousands of dollars. The only way to make that sustainable is to charge really expensive milkshakes right to offset and subsidize that cost, and for years the way we've done that is to charge essentially the private payers. So people like Brewcloth, spooshield, united, aetna would help essentially pay that extra cost of the uncompensated care that we're providing.

Speaker 2:

But they're not doing that anymore, right, they are coming up with every sort of reason not to, and downcoding and delaying payments, which ultimately we have now this big gap of who's paying for all this uncompensated care, and we can't. The patients aren't paying it, the government's not paying it and now the insurers aren't paying it, and so at some point, how do we get this funded is kind of the fundamental question. But when we go to Congress every year, you know they are very reluctant to say, well, that's great. You know, as they empty out their pockets, where is that money going to come from? You know who's going to pay for that. You know we can't even pay for Medicare Social Security as it is right now. Where is that funding going to come from?

Speaker 1:

That's a bleak picture. I didn't realize it was 70%. I thought it was like 50%, but nearly 70%. It's crazy. So where does this go? Can you put on your sort of wizard hat and say where do you think this will be in one year, five years? Because, I agree, I don't think that there is any political will to add funding at all. I mean, all we're seeing is reducing funding, and I get it. I'm a fiscal conservative in that. I think our debt is incredibly large and we need to fix it. But is this the place to fix it? So where do you think things are going?

Speaker 2:

So this report kind of calls on state and local agencies to help provide funding for things like substance abuse, for a lot of the preparedness, and some of that makes sense to me and I think when you look at how we fund fire departments and police departments you know it isn't necessarily just for the calls they get, it's for preparedness, right, being ready in case something happens and recognizing that we have to pay for preparedness. And I being ready in case something happens and recognizing that we have to pay for preparedness and I think COVID, you know, really highlighted that that things happen, that we are not anticipating and we have to be ready no matter what. And there is a cost of that. And I think you could make a compelling argument for the government to have some sort of subsidies to pay for that emergency care.

Speaker 2:

But where I really see a difference is holding insurance companies accountable. When you look at how much they are making billions of dollars in profits, like not millions, literally billions, trillions that they should be doing their fair share. And we passed some legislation to try and have some fairness in the no Surprises Act and trying to have patients taken out of the middle. But it is not really being executed to the point where it is holding insurance companies accountable and they continue to kind of get away from paying their fair share. And I think if the government could at least put in some guardrails that would really hold insurance companies accountable and have them really be the person who helps fund that safety net. It would help provide some financial relief for emergency departments.

Speaker 1:

How are other countries dealing with this? The entire Western world is aging. More people are using the emergency departments. On the one hand, it feels good because your job's not going away anytime soon, but it's all about compensation. So how is Canada doing it? How is Australia? How's?

Speaker 2:

England Everyone pays a higher tax rate where you have same and similar access to care. There are certainly pros of that model. There's also some cons, where a lot of places they have to wait months, years to get a hip replaced. So there's advantages and disadvantages. A lot of companies have, or countries have, a two-tiered system where there is a public option and there's a private option, where some healthcare is subsidized by the government and then if you want to pay for additional services or premiums, that those are available. There's a lot of different options that have been put out there.

Speaker 2:

I think politically it has been difficult, as we've had discussions on Medicare for all if that's something our country could support how that would affect Medicare and Medicaid. But when Medicare was enacted right, there weren't as many people who were 65 and older and, as we've seen, that baby boomer generation now get into their 70s, 80s, 90s and patients are becoming sicker. They're consuming more resources. We don't have the funds to continue supplementing it the way that we have. But politically nobody wants to take anything away from seniors. So how do you thread that needle and how do we continue to fund it?

Speaker 2:

I've seen over the last 10 years a shift, I think, in physicians, where 20 years ago, talking about Medicare for all or having some kind of public system was untenable. I'm hearing more and more at the AMA and other organizations about really advocating for this, and I think part of it is recognizing that we can't continue what we're doing, that it's not sustainable and that we need to have a better system. In particular, the way that insurance companies and this vertical consolidation that we've seen is changing the landscape of healthcare, I think is concerning people and recognizing that we have to do something different.

Speaker 1:

The numbers when you look at the summary of the RAND report, all in the wrong direction. The complexity of patients is going up, the age of the patients is going up and the payments are going down. There's only one outcome for that if things don't change, and that is the collapse of the system. And what we're seeing is, I think, that collapse right now, with boarding and other things going on. Where it's interesting because Peter Fogelio said we've had this crisis for 40 years Now. He was talking about this in the 80s and there was some really strong discussion between those guys, but I've never seen it this bad. I've been here for 33, 34 years and I've worked at UCLA. When I first got here and it looked completely different than it does today, the residents today have 60, 80 patients waiting. They are doing hallway medicine. We didn't do any of that when I did my residency in the early 90s. That wasn't a thing.

Speaker 2:

So it is worse, and I hear that from almost everybody. Yeah, I think boarding has been around a long time but to the point now where the majority of patients we're seeing are actually in the waiting room is becoming the norm and that's frightening and that's dangerous. And yet we've had so many studies showing that increases mortality that this is obviously bad for patient satisfaction. It's high risk management but it continues because of the financial structures that hospitals aren't staffing half of the floors upstairs, we don't have enough nurses and people are trying to figure out how do they cut staffing in the emergency department to save costs when, if anything, you should be investing and having more staffing so we can get to these patients. And it really is infuriating.

Speaker 2:

But I think this is all a trickle-down effect of how we pay for health care and if we got paid, if we could even keep up with just inflation, that would help subsidize some of those costs. That would allow us to be more proactive. This report also calls for an increased primary care net right of recognizing that some of what we do in the emergency department is not just emergency care but acute, unscheduled care and having a system that would better take care of those patients where they have a medical home and a place to go where we can be both primary care, emergency care, preparedness, like there's limits to what we can do in an eight-hour shift, like there's limits to what we can do in an eight hour shift. And until we fundamentally recognize that and pay for it and set up a structure that supports that with more coordinated care, it's going to continue to be a challenge for us in the emergency department.

Speaker 1:

So there was a suggestion, two suggestions from the prior panel, and one of them came from Dave Schroeger said the only way we're going to fix this problem is if we go on strike that we keep year after year, decade after decade, just solving the problem. Nobody's going to listen. This isn't going to get fixed until there is basically a we unionize as physicians and go on a national strike and say we can't do this anymore. So that was one radical suggestion. And then Al Cicchetti was on the other side. Like I can't do that. I'm an ER doc, I'm in there, I'm seeing patients If they're sick. I can't not do that. So where do you stand with? We're at a bad place. Is it time for radical solutions like Dave Shredarigo is suggesting, or is that just going to fail because ER docs are just going to go to work and look after people, because that's what we do going to go to work and look after people?

Speaker 2:

because that's what we do. What a great question. We were actually just talking about this yesterday. There's a resolution in the AMA and their code of ethics of what do physicians do about unionization? What do we do about striking? And fundamentally it seems like that is a contraintroduction to what we do with our Hippocratic oath that we guarantee that we're going to take care of patients and that by striking, by definition you're putting patients potentially at harm.

Speaker 2:

But there are ways you can set it up. Where you have other people, you make sure you have coverage, that there's no gaps where people can make a stand, and we've really ASAP has looked into this of what are the benefits and the cons of unionization, of striking, as we're seeing that more and more across our specialty over the last couple of years, of trying to have a collective voice and collective bargaining to improve our workplace environment, and in some places it can be very effective. I think one of the things people have to understand is not everybody can strike and not everybody can unionize. So, by definition, if you are an independent group and you have ownership in your practice, you can't be part of a union. So there's limits on if you're hospital employed, depending on your employment structure, of whether you are allowed to be in a union really limits potentially what you can do. But I do think there is a role for collective bargaining, of really making this more of a public issue.

Speaker 2:

Clearly, the legislators are not hearing how desperate the situation is, and I think this was the intent of the RAND report was to the audience. Is not emergency physicians right? We all know that boarding, crowding, violence this is our everyday life. The audience here is really a wake up call to legislators of like this situation is getting dire and we need to address it now. But if this doesn't work and if policy is not working, I kind of understand Dave Treiger's point of maybe this is the time that we have to kind of band together and speak out and do it in a way that's safe, that doesn't jeopardize patient care, but really highlights to hospitals and to the public who ultimately we need their voices to stand up and say, yes, we need to do better in order to affect change.

Speaker 1:

I don't know if you watched the Pit.

Speaker 2:

Ooh, I love it.

Speaker 1:

Excellent. I'm so glad To the writers of the Pit. I'm going off to to the writers' room here in a little while. What would you ask them to do? What message would you like them to give to the general public as part of what is really a public health show? It's entertaining, but it's also a lot about what's wrong with emergency medicine right now. What would you have them say to the millions of people that watch every episode?

Speaker 2:

First of all, thank you for doing that show and for all the writers. I think it has really helped us be seen as emergency physicians and help the public to understand many of the challenges that we face day to day. I think the example that we talked about of financing most of the public doesn't realize how emergency care is funded or, in this case, not funded, and how this unfunded mandate is causing boarding, is causing this backup of staffing. And if we could explain to people that the vast majority of patients don't actually pay the cost of care and that emergency physicians are required by law and we are proud to do so, but we can't continue to see everyone everywhere every time without financing it and ultimately that's going to cause more boarding and crowding and giving them that example of the majority of patients don't pay the cost of care. How would any other business maintain their operations and keep their doors open if two-thirds of their customers got free labor or free goods? So we need to fundamentally address how we do this and until we really get to that root cause, there's going to be boarding, there's going to be violence, there's going to be more consolidation and I think you just did a great job on the pit of kind of examples about patient satisfaction scores and boarding times and having their contract at risk. You know, this report really highlights that the people who are most at risk are those like Dr Ravi's.

Speaker 2:

It's the independent groups that are staffing emergency departments that this system is really making it a big concern that that may not be a viable practice anymore in the future, that you may have to be a large mega group in order to be able to fairly negotiate with insurers and if we don't have a system that disrupts that consolidation, that business model of independent practice, it may not be financially viable.

Speaker 2:

And that is a big concern and should be a concern for physicians, for patients, for the public of recognizing that competition in the workplace is a good thing. We want to be able to drive patient satisfaction to really address quality. But without having those guardrails and that financial guarantee in place, we're going to see more consolidation and I think that concern that many of us have as much as people don't like big corporate groups. Well, what if the insurance companies own us right groups? Well, what if the insurance companies own us right? If we see consolidation? Where now the insurance companies whose whole business model is to deny care to not cover costs. Now, own physicians like that should terrify everybody because ultimately, their goals are in direct conflict of ours of providing patient care, of covering expenses, of covering access. That that could be where we're headed if this is not addressed.

Speaker 1:

As always, a huge shout out to Joe Sachs, who made the first season of the Pit so good, so medically accurate and brought up so many of these things. We all in emergency medicine should tap him on the back and say thanks, joe, for letting us be seen. He did such an amazing job on that first season and I'm hoping the second season is going to be just as good. Thanks to Dr Schmitz and thank you all for listening and we'll continue these discussions and if you've got any suggestions of people you'd like me to interview, let me know. I'm a little more time constrained right now because of the pit, but let's cue some of these smart people up and get them on the show. Talk to you soon, herbert out.

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Mel Herbert, MD

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