Reader Question: Financial Crunch

Question: How will facilities APC-induced financial crunch affect physician emergency practice groups?

Louisiana Subscriber

Answer: For hospitals to prosper, or even survive, under ambulatory payment classifications (APCs), administrators will want some degree of uniformity in emergency physician resource use for given diseases or clinical conditions. This will be especially true concerning pharmaceuticals administered to Medicare patients who are discharged from the emergency department.

For example, emergency physician groups will have to be able to collect and analyze practice data on all group physicians to provide clinically effective and cost-efficient care to the Medicare population. Most physicians in a group may treat a given infection with a $20 prescription for Amoxil, while one or two usually administer one gram of the far-more-expensive Rocephin IV or IM for the same infection. The cost disparity for pharmaceuticals will show the physicians who use Rocephin to be cost-ineffective outliers who are likely to convert an APC profit into an APC loss for the hospital.

Financially strapped hospitals certainly will look to the emergency department physician group to develop practice guidelines that will minimize the hospitals financial risk under APCs. Most emergency physician groups currently do not possess the data necessary to develop relatively uniform practice guidelines. As such, they may find it difficult to convince the facilities that they are doing their part to help limit the financial exposure.

Hospitals will demand that emergency physicians exercise financial as well as clinical judgment in their selection of pharmaceuticals to be administered to patients who are ultimately discharged from the emergency department. They also will demand that physicians make admission or discharge determinations rapidly, so the facility may obtain reimbursement for pharmaceuticals, supplies, blood products, etc., under the better-paying inpatient DRGs, rather than the APC system.


- Published on 2000-05-01