How do figure that it will lower the total cost of health care. Look at it from the vantage point of the ER. They have x amount of staff to pay, y amount of fixed costs, and some profit margin. Whether they charge 10 patients $1 million each and get paid on 30% of them or they charge $300K each and get paid on all of them doesn’t change the total cost of health care at all. Those 10 patients brought in 3 million dollars to the ER. It just changes who’s paying for it. Suppose this scenario.
The ER sees 7 patients cuts the $1 million charge to $500K and gets paid on all of them. The ER just made an addition $500K and total health care costs went up even though each individual patient was charged less.
Now if the ER responds by cutting their workforce (costs) because they see less patients the total costs could go down but nothing in Obamacare makes them do that.[/quote]
Ignoring professional staff for the moment, there are other marginal costs for running an ER. Drugs, consumables, DME, admin costs and salaries. Using the beginning of your example, instead of 10 pts with 8 paying, they may only have 9 pts with all of them paying. Some ER visits for formerly uninsured will remain, but some will entirely disappear as covered patients see non-ER physicians with a much lower cost, and some visits entirely disappear as a result of preventive care.
The cost savings in having more people covered (as specifically related to ER’s only) will come from two areas. First, preventive care is less expensive than acute care. (e.g., successfully treating for hypertension is significantly less expensive than treating for a heart attack.) Second, treating in a non-emergency clinical setting is significantly less expensive than treating in an ER.
One of the by-products will be a reduction in cost-shifting. Currently non-profit hospitals that are required by law to treat indigent patients (where zero-pay patients often reach 20%, in some hospitals much higher) must charge insured patients to cover the cost of their zero-pay patients. With a reduction in indigent patients, that cost-shifting will be reduced.
