The English language somehow manages to be precise and yet allow people to invent words and phrases to describe new things and new situations.
“Total reroute” is the expression recently created to describe a hospital emergency room that is so full it cannot take in new patients. In these situations, ambulances with emergency-care patients are rerouted to other hospitals that haven’t yet reached capacity.
Sometimes that isn’t easy. A recent report out of Hawaii, for example, says that it isn’t uncommon to have four or more Oahu emergency rooms on “total reroute” status at the same time. Similar reports from other parts of the U.S. indicate that the crowding problem is widespread and not going away. The most reliable estimate we have is that “turn-aways,” or rerouting of ambulances with patients in them, total more than 500,000 a year, and the number appears to be growing.
One reason for the growth in ambulance rerouting is that there simply aren’t as many hospital emergency rooms as there used to be. Over the past decade, more than 400 of them have shut their doors. If you are used to the big numbers of federal deficits or WorldCom busts, a mere 400 closures may not seem like a lot. But that translates into a large number of patients and a big gap in medical care.
The emergency room problem is described as a crisis by the Institute of Medicine, an arm of the National Academy of Sciences, and anyone who has visited an ER lately would likely agree – and can probably bring you up to date on what waiting times are like these days.
The visible reaction to this problem, including media reports, has been generally focused on demands that government do something. But since the problem has been worsening over the past 20 years and governments of all political persuasions seem disinclined to do anything about it, economics decided that it couldn’t wait. It would just have to start reshaping things on its own.
Economics in action can be pretty exciting to watch. It is hard not to get a little caught up in the excitement when the bell starts clanging to open the New York Stock Exchange.
Other parts of economics move more slowly, and less visibly, although not less forcefully. Watching this kind of economics in action requires a bit more patience and perspective, and maybe some time-lapse photography, but it is no less exciting.
The reasons for the decline in the number of emergency rooms are almost all economic ones. Emergency rooms have become treatment centers for millions of people who lack money or medical insurance, or both – with the result that fully half of all treatment provided by ERs involves non-emergency ailments.
Federal law requires that emergency rooms provide treatment whether the patient can pay or not. The government pays when patients are unable to do so, but there has been a growing gap between what it costs hospitals to deliver the care and the amount they are reimbursed by the government.
There is also a growing gap in philosophy between the way government sees the issue and the way hospitals, doctors, and other caregivers see it. Government views its reimbursement payments as a cost-cutting incentive. That is, if the payments are fixed and ungenerous, the hospitals will figure out a way to lower their costs to meet that amount.
As a management technique, or policy, this wasn’t really the worst idea ever hatched, certainly not by Congress. The budget constraint approach, or something like it, underlies a lot of the planning and budgeting functions in both the public and private sectors in America.
Things do not always work out as planned, though, and in this case it is because the federal government didn’t consider the long-term economic effects along with the short-term impact. Rationing the payments probably did have the desired effect of containing costs. In the longer run, though, losses caused by the lower compensation caused many hospitals to decide that emergency room care was not a business they could afford to be in.
What Congress, on our behalf, has to decide is how to balance the long- and short-term economics of its policy. And the big question is whether the cost-containment strategy is working properly or has gone too far and is making health care dangerously scarce.
Health care is more than just economics, but economics plays an important part in it. And economics doesn’t have a short attention span. In between the times when health care issues capture Congress’ interest, and the public’s, economics just keeps on working. We need to make sure it is working on the right things.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.
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