Code Blue.

• Author: ISENSTEIN, HOWARD
• Position: Managed care is putting emergency care into shock

How managed care is putting emergency care into shock

Most Americans take it for granted that if they have a heart attack or get in an accident, highly qualified help in an emergency room is but a short drive away. Don't believe it. Growing numbers of hospitals around the country--and their emergency departments--are shutting their doors due to financial pressures. Those that remain are reducing emergency services by pooling their resources with other hospitals or simply by cutting quality.

Emergency departments are the bulwark of the country's health care system. Not only are they the first line of defense when there are actual emergencies, such as plant explosions, airline disasters, and the like, but they are also critical in saving more routine heart attack and auto accident victims. Emergency physicians say that patients such as these need to be seen in the so-called "golden hour" immediately after the onset of their problem or risk irreparable harm. Emergency departments also serve as the primary health care provider to tens of millions of poor and uninsured Americans who lack the means to access more conventional settings like doctors' offices.

But such a safety net doesn't come without a price. Emergency departments must maintain high levels of readiness 24 hours a day, seven days a week, by employing skilled teams of physicians, nurses, administrators and other highly trained staff, and by keeping up with the latest life-saving technology. While surgical and other hospital departments are equally or more expensive to maintain, they enjoy well-insured patients who can pay their bills. Emergency departments, by contrast, are perennial money losers because their patients often cannot.

Until the 1990s, insurance companies and their employer clients were willing to shell out to support emergency departments and pricey healthcare in general. But that changed with the rise of managed care, a euphemism for rationing. Employers, stunned by double-digit premium increases, answered the siren call of managed care organizations, including HMOs and preferred provider organizations, which promised negligible rate increases. Today, about 85 percent of all employees with health insurance are in some sort of managed care plan.

For much of the mid-to-late 1990s, HMOs delivered on their claims by negotiating steep discounts with hospitals, doctors, and other health care providers. HMOs also delivered by limiting--sometimes harshly--access to and time...