Hospital outpatient departments treat sicker and poorer patients in need of more extensive care and resources than do physician offices, says a study released Feb. 26 and prepared for the AHA.

The study by Rockville, MD-based KNG Health Consulting LLC said patients treated in HOPDs are about two-and-a-half times more likely to be uninsured or covered by Medicaid than are patients treated in a physician’s office. The study also said HOPD patients have more severe chronic conditions, including congestive heart failure, hypertension, diabetes and obesity; and are more likely to have sought care in a hospital emergency department in the previous 90 days.

“The needs of patients cared for in hospitals are different from those seen at physician offices; treating them like they are the same does not make sense,” said AHA President and CEO Rich Umbdenstock in a statement on the study.

The study’s findings were discussed at an AHA- sponsored briefing today on Capitol Hill, where hospital leaders shared with congressional members and staff their deep concerns with proposals for Medicare to pay hospitals the same rates as physician offices, ambulatory surgical centers and others for certain services.

Those proposals include paying hospital care at the physician office rate for evaluation and management services and 66 specific ambulatory payment classifications. That would amount to a $3.6 million cut for Eastern Connecticut Health Network in Manchester, CEO Peter Karl told Hill staffers.

“You can’t bundle all care together,” he said. “You can’t bundle care for a 20-year-old who needs his knees done and a 90-year-old with comorbidities who needs her knees done and say it’s all the same.”

“Cuts like these are not health care reform,” Karl said. “They are cuts to hospitals that take care of everyone who walks through their doors.” He also described them as “fracturing the bridge we are trying to pass over to get to a more coordinated system of care.”

Sherry Bea Smith, CEO of Lead-Deadwood (SD) Regional Hospital, part of Rapid City, SD-based Regional Health, said the proposal would cut the system’s payments by $16.5 million, and “erode our ability to care for our communities.” 

For example, she noted that Regional Health has contributed $1.5 million to support a Rapid City crisis care center that provides 24-hour services for adults struggling with mental health or substance abuse. It helps people dealing with problems – from thoughts of suicide to feeling overwhelmed – to get quick access to mental health professionals who can evaluate their situation and get them the level of care they need. And it provides an alternative to costly hospital stays and incarceration.

But Smith cautioned that the system’s “funding for the center will be quickly eroded if we have to give up $16.5 million in revenues.”

Carl Josehart, CEO of TIRR Memorial Hermann, a Houston-based rehabilitation hospital, called the equalized payment concept a “misdirected way of looking at cost containment…that removes people from receiving an appropriate level of care and will lead to more people receiving care in the emergency department.”

Photo from 2/26 Capitol Hill briefing

Capitol Hill briefing. From left are Lane Koenig, president of KNG Health Consulting; Carl Josehart, CEO of TIRR Memorial Hermann; Peter Karl, CEO of Eastern Connecticut Health Network; and Sherry Bea Smith, CEO of Lead-Deadwood Regional Hospital.