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Comment by bloopernova | Hacker News Reader

Question: What's broken about the economics of ERs such that more are not being created to satisfy demand?

My assumption is that people are unable to pay their medical bills, but I was wondering if there were other factors involved too.

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Emergency departments basically never make money. When they are economically viable, emergency departments effectively function as a loss leader to get patients admitted to the (sometimes profitable) inpatient facility. You therefore can't really build an emergency department unless there is also demand for inpatient facilities in the area.

The idea that hospitals are supposed to make a profit at all seems ridiculous to me.

Voters don’t want to pay for it via taxes so that doesn’t really leave any other options. Employees and vendors need to get paid somehow.

It's not really a matter of making a profit, it's a matter of covering costs. Emergency rooms are really expensive because you want enough capacity to cover a bus accident but that implies having more capacity than you need at most other times. (And "profit" is just the cost of capital in general.)

Markets can handle this, but the answer is to have the specialists standing around waiting for something to happen and then charge enough when it actually does to cover the idle time, and use insurance to spread the risk of being the one to incur that high cost. But this handles people without insurance poorly.

This is also the same basic issue that causes cities to have fire departments, and could be handled the same way, i.e. the city operates an emergency room the same way it operates a fire house and then pays for it from local taxes. But then emergency rooms are still really expensive to operate and meanwhile the feds still have a bunch of tax provisions encouraging employer-provided health insurance so most people do actually have health insurance, which creates a lot of pressure for the city to stop funding it and let the insurance companies pay for it, and we end up back at the first option.

So ironically, the problem is caused by too many people having health insurance.

The largest factor has been identified.

You need permission to build a hospital in most jurisdictions.

BUT WAIT... THERE'S MORE!!

The new hospital must get approval......from the incumbent hospital. Yes, Burger King must seek permission from McD to open across the street.

About two years ago we had a new surgery center proposed in our area. Right now there is one, owned and operated by the local hospital.

They nixed the idea that a local clinic could run a surgery center, and threw up every road block they could in the process.

Their argument was that the increased competition from the other surgery center would drive prices up.

The local county and city board tasked with deciding whether or not to allow it listened to them for two years. Two years of this nonsense.

The board gets mostly replaced by new members because of this issue and the new surgery center gets approved. . . and the prices at the existing surgery center drop to half of their previous levels overnight.

WTF

Perhaps not the answer, but I noticed that a lot of people don't know that urgent care exists and go to emergency room even if their issue would be handled better, cheaper and faster at urgent care facility. It doesn't help when medical staff will also direct people to emergency room instead of urgent care when their office is closed.

There is also a law (that was good intended, but causes more issues) that ER can't reject anyone who comes to ER, no matter what the issue is.

Anyway when seeing doctor depending on urgency you should ask for same day appointment, if it is weekend or same day appointment is not available you go to urgent care. Even if you have terrible pain if it is not threatening your life urgent care is better.

If you have something that threatens your life (you shouldn't go to urgent care of you have problems breathing, bleeding etc), but also broken bones, giving birth go to ER. Anything that calling an ambulance doesn't feel like an overkill.

My perception is that what is broken is that the emergency departments are filled with patients (1) for whom a disposition has already been made, (2) and that disposition is to an inpatient ward inside the hospital, but (3) no bed is yet available.

Creating more EDs doesn't actually solve that problem.

As was mentioned in the article, many users of emergency rooms do not have health insurance or are on government funded health care.

There is a law in the US that an ER can not turn down someone that needs care. So emergency rooms end up flooded with non emergency issues, but have to staff like it is all emergencies.

It is essentially the most inefficient method of health care. Hospitals typically lose money on emergency room services on the whole because of the uninsured that will not pay at all and the government funded insurance that pays much lower than the hospital's actual cost to provide the care.

> ... uninsured that will not pay at all ...

Or, you know, cannot.

That was entirely unintentional in connotation. Please refrain from picking fights. It is very unproductive.

I'm not picking anything. I was stating a fact. A good number of those people would pay their bill if they could. It was presented as though they would not.

Why would someone not pay their bill if they could? You realize that their wages will be garnished and bank accounts frozen, right? So they will be forced to pay as much of the bill as they can. There is no distinction between "can" and "will" as the have to pay it. Outside of bankruptcy which would again take all of their available assets and apply it to the bill before releasing the remainder of the debts through bankruptcy.

You don't just get a medical bill will a statement at the bottom that says "Only pay this if you feel like it". There is no one that does not pay a medical bill that can actually pay it. You are derailing this discussion on language semantics. Why?

The question was "What's broken about the economics of ERs such that more are not being created to satisfy demand?" My response was to illustrate that ERs lose money. How are your comments in any way productive in providing any insight into that question?

When you add "at all" to "Uninsured will not pay" it implies that they are refusing to do so.

They are not given a choice to "refuse to do so". It is not an option. Please explain how they can "refuse to do so".

1) Vast amounts of regulation.

2) Liability.

3) Special interests (not just pharma and insurance, hospitals, doctors, nurses as well).

4) Supply constraints from the above listed reasons.

5) People who go to ER instead of primary or urgent care, some who can't afford it others just from ignorance or panicking.

Probably more reasons I'm unaware of.

In a lot of places, you need to ask permission before you're even allowed to build a hospital. I think that fact, and the process attached to it, helps keep the supply low.

Yup https://en.wikipedia.org/wiki/Certificate_of_need

That map shows California (which OP's article is about) as one of the states where CONs are not needed

Hospital complexes are large, distinctive, and attract a lot of traffic. Check your city’s zoning map - existing hospitals are probably in a zoning category of their own, and they’s unlikely to be any spare hospital-zoned land. At minimum it would take a big land use fight, before even getting into medical and public health regulation.

ERs typically cannot deny anyone care for financial reasons.

It seems like what might help is if they could deny care for "this is not an actual emergency, please go schedule an appointment with a non-emergency care provider" reasons.

Lack Of Doctors.

As decided by the cartel of med schools

The supply of doctors is limited by the availability of residency positions, not medical school seats. Congress needs to start funding more residencies or relaxing the regulations on foreign doctors coming to practice in the US.

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