Dissertation

Running head: REDUCING THE PREVENTABLE USE OF EMERGENCY SERVICES

Reducing the Preventable Use of Emergency Services

Could Generate Substantial Healthcare Savings

Irina Bubnova

HCA 450A: Critical Issues in Health Care

Professor Ronning

Warner Pacific College

June 26, 2016

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REDUCING THE PREVENTABLE USE OF EMERGENCY SERVICES

Reducing the Preventable Use of Emergency Services

Could Generate Substantial Healthcare Savings

Since the passage of the Affordable Care Act (ACA) in 2010, America entered into an era

of healthcare reform in a desperate attempt to curb ever rising healthcare costs. The Centers for

Medicare and Medicaid Services (CMS) were given unprecedented power to develop and

implement various cost saving pilot programs in the hopes of finding something that works.

Many hospitals as well as numerous private, state, and federal organizations have also been

implementing their own experimental programs, all with the intention of stopping growing

healthcare costs. However, the issues are numerous and no one solution can fix the entire

healthcare system. One aspect that has not been well addressed by the CMS and can be vastly

improved upon is the problem of unnecessary and/or avoidable ambulance transports and

emergency department visits by Medicare and more specifically Medicaid patients.

Background

Prior to examining the issue of the overuse of emergency departments (EDs) and

emergency medical services (EMS), it is important to put these costs on the system in the right

perspective. According to The Pew Charitable Trusts organization, in 2012 the American

government spent $1.3 trillion on healthcare, of which 4 percent went to ED costs (Ollove,

2015). Four percent does not seem like a lot compared to the $1.3 trillion total, however this

percentage is debatable and critics point out that there are multiple formulas that can be used to

calculate this number (The Fiscal Times, 2013). By adjusting for discrepancies and adding more

databases, a secondary source estimated ED costs to be between 4.9 and 5.8 percent of total

health care expenditures (The Fiscal Times, 2013). By using still another database, this same

source found ED costs to be between 6.2 and 10 percent (The Fiscal Times, 2013). It is difficult

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to ascertain the exact percentage of spending that goes toward ED costs, but one thing is

undisputable, and that is the fact that emergency services are exponentially more costly than

office-based care and can be successfully reduced with the right approach.

According to CMS (2014), Medicaid recipients utilize the ED at twice the rate of those

with private insurance. For example, in Oregon 50 percent of all ED expenses are accrued as a

result of just 3 percent of the Medicaid population or 16,000 individuals (CMS, 2014). Many

assume that there is rampant abuse of the system amongst Medicaid beneficiaries, but data shows

that in reality only 10 percent of all ED visits by these patients are non-urgent and all other visits

are indeed appropriate and necessary (CMS, 2014).

There are a number of reasons as to why specifically Medicaid patients have a

disproportionate need for ED services and most of them can be traced back to a poorer health

status and poor access to care. Due to socio-economic disadvantages, Medicaid patients are

generally less healthy than the overall population (Ollove, 2015). They tend to have poor

nutrition and to be prone to numerous chronic disorders that are extremely costly to the

healthcare system. Medicaid recipients also come up against countless barriers when it comes to

getting primary care. Many providers do not accept Medicaid patients due to low reimbursement

rates, or at the very least they severely limit their numbers. In Illinois, more than 35 percent of

physicians will not accept any new Medicaid patients and appointments with specialists are

denied two-thirds of the time (Ingram, 2013). Furthermore, Medicaid patients also often lack

transportation and have jobs that make it difficult for them to get to a doctor’s appointment

during regular working hours (Ollove, 2015). ED’s on the other hand are open 24 hours a day,

and cannot by law turn anybody away from receiving care, making it the perfect place for

Medicaid patient to turn to during a medical crisis. Overall, poor health coupled with a lack of

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good access to care creates a disastrous cycle that easily compounds medical conditions and in

the end, healthcare costs.

As was mentioned earlier, depending on how data is interpreted, ED costs account for

approximately 4-10 percent of annual healthcare expenditures. While this number is not awe

inspiring, it is beneficial in this instance to take a step back and look at the whole picture.

According to Kaiser Health News, 1 percent of patients account for 21 percent of all healthcare

costs, while 5 percent account for 50 percent of all costs (Boodman, 2013). Now this data is

shocking. Image that a meager 5 percent of patients accounts for half of all healthcare

expenditures. The patients in this 5 percent are commonly called super-utilizers and “nearly all

wind up in emergency rooms because they have enormous difficulty navigating the increasingly

fragmented, complicated and inflexible health-care system” (Boodman, 2013, para. 4).

Furthermore, “because of lack of alternatives or force of habit, they use hospitals, often several

in the same city, for care that could be provided far more cheaply and effectively in outpatient

settings” (Boodman, 2013, para. 4). For example, a certain patient loses his method of

transportation and misses 2 weeks worth of dialysis treatments. He then ends up being

transported by ambulance to an ED, where he incurs a $30,000 hospitalization bill on top of

substantial EMS and ED charges. The takeaway here is that the costliest patients nearly all begin

their journey in the ED, which is why it is important to find a new and innovative approach

towards super-utilizers.

Copayments

Seeing as a good portion of Medicaid spending comes from state budgets, many states

have shown great interest in cutting down unnecessary ED visits. One of the earliest strategies to

do so was to impose copayments and cost-sharing tactics on Medicaid beneficiaries in hopes that

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the token payments would decrease the use of medical services for non-urgent problems

(Siddiqui, Roberts, & Pollack, 2015). During the 2007-2009 Great Recession the Medicaid

program greatly expanded and many states began struggling to contain costs. In response to this

crisis, authority was given through the Deficit Reduction Act of 2005 for states to administer and

enforce copayments and premiums for up to 5 percent of the beneficiaries’ annual income

(Siddiqui, Roberts, & Pollack, 2015). This included copayments for ED visits if they proved to

be non-urgent in nature. Some states went ahead and implemented copayments for non-urgent

ED visits while other states did not.

However, in a recent study done by Siddiqui, Roberts, and Pollack (2015), it was found

that there was no significant change in ED visits in states that implemented copayments, nor was

there any significant change in ED visits when compared to states that did not have a copayment

(Siddiqui, Roberts, & Pollack, 2015). The reason for this may be because ED’s have to provide

care regardless of a patients ability to pay and collecting the copayment after the fact is much

more difficult (Siddiqui, Roberts, & Pollack, 2015). It is also often hard to immediately

distinguish between emergent and non-emergent symptoms, which also creates a lag in payment.

Nevertheless, there are states that maintain that higher copayments are needed in order to reduce

unnecessary ED visits. Utah Governor Gary Herbert is proposing to lower premiums for

Medicaid beneficiaries and increasing the ED copayment to $50 for non-emergent conditions

(Ollove, 2015). California and Arizona are also seeking to raise copayments for non-emergent

ED visits (Ollove, 2015).

Alaska

The state of Alaska took a different approach and launched a 2-year pilot program called

the Alaska Medicaid Coordinated Care Initiative, which focuses on providing one-on-one care to

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willing Medicaid patients. Alaska also suffers from Medicaid patients disproportionately

utilizing emergency services, where “3 percent of Medicaid clients are responsible for 22 percent

of all Medicaid emergency room visits” (Andrews, 2014, para. 1). Under the new initiative, case

managers will be assigned to willing clients and will help them with provider selection,

pharmacy selection, appointment scheduling, and any other problems that may arise during the

course of their care (Andrews, 2014). Seeing as Alaska presents some unique geographic

obstacles, the initiative will also work on removing social barriers such as a lack of

transportation and good housing (Andrews, 2014). The outcomes of this pilot program are not

yet available, but considerable savings are expected.

Oregon

The state of Oregon has a few different experiments under way, one of which is a pilot

program called the Alternative Destination and Transportation study, which was implemented in

Multnomah County by the Portland Fire Bureau and American Medical Response (AMR). The

premise of this study is that individuals who use the ED inappropriately, also often get there by

calling 911 and utilizing an ambulance. An ambulance transport costs in the vicinity of $1000,

while an ED visit can be thousands more. In these situations, often times what is more

appropriate is an alternative source of transportation and an alternative destination such as an

urgent care clinic or a doctor’s office (Law, 2014).

The way the program works, is when an eligible individual calls 911, specially trained

paramedics work with that person to either get them to their primary care physician or to an

urgent care clinic via taxi or private vehicle. Unfortunately, because the rules of eligibility were

so strict and only Medicaid and Medicare patients were qualified to participate, only about 100

people were ever candidates for this program (Law, 2014). Of the 100 candidates, many would

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not give written consent to go to an alternative destination, and still others were unable to get an

appointment soon enough. In the end, only 16 people were actually transported to an alternative

destination and not to an emergency room (Law, 2014). While the idea was good, there were too

many limitations and not enough incentive for patients to decline an ambulance that was already

there in lieu of getting care at a later time.

The latest efforts from the state of Oregon to control unnecessary ED costs comes in a

much more comprehensive form. In 2012, Oregon received a federal grant of $1.9 billion to

reorganize its Medicaid delivery system into Coordinated Care Organizations (CCOs), which

would bring an estimated $3 billion worth of savings over the course of 5 years (Broffman,

2014). This type of organization would form “regional public-private partnerships that accept a

single global budget and are accountable for the physical, mental, and dental health care of their

Medicaid population” (Broffman, 2014, para. 2). While this structure was not strictly made to

cut Medicaid related ED costs, that was one of its goals and there has already been some success.

Going from year 2013 to 2014, the rate of avoidable ED visits decreased from 8.6 percent to 7.4

percent even with the large inflow of new Medicaid members (Oregon.gov, 2016).

Under the CCOs, super-utilizers are identified by the organization and assigned to a

community health worker who then helps the patient and providers to coordinate all needed care.

One such individual, 45-year old Jeremie Seals lived in his car and had multiple ongoing chronic

medical conditions. In 2011 he visited the hospital ED 15 times and was hospitalized 11 times

(Foden-Vencil, 2013). This got the attention of the CCOs and he was asked if he would

participate in their program. He accepted and his coordinator went on to help him purchase

shoes, a sleeping bag, a pillow, helped him schedule medical appointments, made sure he

understood doctor’s instructions, and got him passes to a community center so he could shower.

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As a result, in 2012 he had only 4 visits to the ED and 4 hospitalizations (Foden-Vencil, 2013).

According to CareOregon, one of the health plans for Medicaid and Medicare patients, it takes

less than one hospital admission to more than pay for all the services that the community health

workers provide to the patient (Foden-Vencil, 2013).

Washington

The state of Washington has been perhaps the most aggressive in their search for ways to

cut down on unnecessary ED expenditures. In 2011, the Washington State Health Care

Authority released a mandate that in a one-year period it would pay for no more than 3 non-

emergent ED visits per Medicaid beneficiary. The expected savings from this mandate were

going to be approximately $35 million a year (Ollove, 2015). This plan, however did not sit well

with the state’s doctors and they filed a lawsuit to block it. What was problematic to the doctors

was that the state classified 700 diagnoses as non-emergent, including chest pain, abdominal

pain, and shortness of breath (Ollove, 2015). It would be inappropriate to tell a 60-year-old man

with chest pain not to go to the ED even though the last 3 visits of a similar nature came up

negative for a cardiac event. The fourth visit could easily prove to be a true emergency. The

doctors won in court, which resulted in negotiations between the state and hospitals to work out a

system that would work. “Those sessions ultimately led to Washington State launching the most

comprehensive effort to reduce unnecessary emergency room visits among Medicaid

beneficiaries” (Ollove, 2015, para. 25).

In the end, what Washington created was a network between all the hospitals, so that

information could be shared in order to identify frequent ED users amongst Medicaid recipients

(Ollove, 2015). Once such an individual is identified, hospital personnel work with that person

to get him/her an appointment to see a primary care physician within 96 hours of the ED visit.

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Education is also a big part of the plan and is offered to patients in order to guide them to a better

understanding of what does and does not constitute a real emergency. A 24-hour hotline staffed

with qualified nurses is available to Medicaid beneficiaries for cases where they are not sure if

their complaints and symptoms warrant a trip to the ED. “In the first year of the program,

emergency department visits by Medicaid enrollees declined by 9.9 percent and the rate of visits

by frequent users… fell by 10.7 percent. The savings for 2013 totaled $33.6 million” (Ollove,

2015, para. 29). It appears that Washington’s assertive approach has thus far paid off and has

resulted in millions dollars worth of savings.

Maryland

In many areas around the country where the state itself is not as interested in actively

pursuing limiting preventable ED use, hospitals are picking up the slack. In Maryland where

healthcare reform is in full swing and value-based reimbursement is well under way, hospitals

find it imperative to cut all unnecessary spending. The ED happens to be the best place to start

because of how much more expensive the care is versus other outpatient care settings. Anne

Arundel Medical Center located in Maryland decided to focus on the top 500 patients seen most

often in the ED and in the organization by giving willing participants free in-home support

(Letourneau, 2015). As part of the in-home support plan, care managers visit patients at their

home and assess their social needs and ability to access necessary care. They also provide

education on medication administration and on how to create a better lifestyle. There is no data

yet on how successful this program has been but it shows much promise in keeping patients from

needing to access more intensive and costly medical services (Letourneau, 2015).

Anne Arundel Medical Center did not stop at just free in-home support services for its

patients. The hospital also identified that an inordinate number of 911 ambulances were bringing

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in patients to the ED from a nearby low-income senior housing facility for the treatment of

chronic medical conditions that could easily be treated by a primary care provider (Letourneau,

2015). In response, Anne Arundel applied for and received a grant to build a one-doctor primary

care clinic on the first floor of this senior facility, which gave the residents easy access to a

doctor who also had the ability to make house calls. Since the clinic has been up and running,

there has been a 50 percent reduction in the number of 911 calls from the residents and therefore

a 50 percent reduction in the number of ED visits (Letourneau, 2015). It stands to reason that

with time, and the continuous presence of an on-site doctor, the health of the residents will

increase, and the number of ED visits will decrease even more.

Texas

The Area Metropolitan Ambulance Authority, better known as MedStar, provides

emergent and non-emergent ambulance services to the Forth Worth area in the state of Texas. In

2009, MedStar observed that in a 12-month period, 21 of their patients were transported to local

ED’s a total of 800 times (EMS1.com, 2012). These 21 patients generated $950,000 worth of

ambulance charges that were unpaid or scarcely reimbursed due to the fact that they were either

Medicaid beneficiaries or completely uninsured (EMS1.com, 2012). MedStar’s medical director

decided that it was time for an intervention and launched a pilot Community Health Program

(CHP) that aimed at decreasing unnecessary ambulance transports and ED visits.

In this program, super-utilizers are identified through ED and caseworker referrals, as

well as through the company database. Specially trained paramedics then make contact with the

patients and offer them their services. If a patient agrees, the paramedics conduct an in-depth

home visit where they make a full medical assessment and help the patient build “an

individualized care plan that outlines their needs and responsibilities related to managing health

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and health care on an ongoing basis” (EMS1.com, 2012, para. 15). After the initial home visit,

paramedics continue to conduct 2-3 shorter visits per week, which later taper off as the patient

begins making progress. Patients are also able to telephone the CHP paramedics any time an

urgent need arises. When the paramedics deem a patient is able to sufficiently manage their own

health, that patient then graduates from the program. Graduates continue to have access to a 24-

hour hotline that will activate the CHP paramedics for a visit within an hour if they should call.

To date, the CHP has been widely successful and MedStar has even launched several

more similar programs directed at patients who would otherwise utilize an ambulance transport

and the ED (Jacob, 2014). Between the programs launch in 2009 and 2011, “the volume of 911

calls from the program’s 186 enrollees fell by 58 percent” (EMS1.com, 2012, para. 27). With

the decline in calls and transports, MedStar saved $2.8 million on ambulance charges and local

hospitals saved an estimated $9 million in ED charges (EMS1.com, 2012). As of 2014, CHP has

had 264 graduates with an 85 percent reduction in ED use in the year following graduation

(Jacob, 2014).

The barrier to this type of program for many EMS systems is that traditionally,

responders only get paid when they transport to an ED. With the lack of reimbursement, there is

often little incentive for ambulance companies to provide this type of service to the community.

Fortunately, with the shift toward value-based and coordinated care, there is now room for EMS

systems to be part of the team. For example, MedStar now has several agreements with local

accountable care organizations (ACOs) to fund an Observation Admission Avoidance program, a

Hospice Revocation Avoidance program, and a 911 Nurse Triage program (Jacob, 2014). The

Observation Admission Avoidance program allows patients to be observed by paramedics

overnight at their homes instead of the hospital, while the Hospice Revocation Avoidance

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program works to prevent high-risk patients from calling 911, as that would revoke their hospice

status. Lastly, the 911 Nurse Triage program redirects non-emergent 911 calls to MedStar’s call

center, where a trained nurse helps the callers find appropriate medical resources. In a seven-

month stretch, more than 500 patients were diverted from using the ED via the 911 Nurse Triage

program (Jacob, 2014). Since the start of these programs, “MedStar estimates its mobile

healthcare programs have saved more than $3.3 million in healthcare expenditure” (Jacob, 2014,

para. 16).

Conclusion

Healthcare expenditures in the United States are steadily rising and many private, state,

and federal organizations are working hard to reverse this trend while still retaining a high

quality of care. One area of the healthcare system that can be substantially improved is the

overutilization of EMS and ED services. The top 5 percent of patients in the United States are

responsible for 50 percent of all healthcare expenditures and the majority of these patients are in

and out of the ED on a regular basis (Boodman, 2013). If a system were in place that could catch

these individuals early on to provide them with self-management skills, perhaps many of the

consequential hospitalizations and health complications could be avoided, thus effectively

decreasing healthcare spending.

Statistics say that Medicaid patients utilize the ED at twice the rate of those with private

insurance, with only 10 percent of those visits being non-emergent (CMS, 2014). This is

indicative of a much bigger problem, which is the egregious lack of access to primary care. Due

to low reimbursement rates, Medicaid beneficiaries often have a hard time finding providers that

will treat them in the primary care setting. Medicaid patients are also generally less healthy,

frequently lack transportation, and often work hourly jobs making it difficult to make doctor’s

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appointments during business hours (Ollove, 2015). Making access to primary care more

available to this population would go a long way in cutting down on preventable ambulance

transports and ED visits.

While the federal government has not been as involved in undertaking this challenge,

many States and private organizations have been hard at work. Several states have been

especially interested in cutting avoidable ED visits by Medicaid recipients, as that would mean

huge savings for their budgets. Alaska, Oregon, and Washington have each invested in various

forms of patient-centered systems that focus on providing one-on-one care to problem

populations. Those systems have generally showed improvement in how often the ED was used

and in the health of the patients themselves. It appears that teaching and educating patients on

how to care for themselves is better then any punitive approaches that have been taken in the

past, such as increasing copays.

The last innovative idea that was explored is the Community Health Program

implemented by MedStar in Texas. This program allows specially trained paramedics to identify

individuals who frequently call 911 for transport to the ED and to work with them to get their

medical needs under control. As of 2014, MedStar has seen an 85% reduction in ED use from

the individuals they have worked with in the year following their graduation from the program

(Jacob, 2014). If this type of program were widely implemented it could become the first line of

defense for people battling chronic conditions and not knowing how to self-manage their health.

Paramedics make great candidates for this job as they already work out in the field and have

experience in administering care in the patient’s personal environment.

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Recommendations

Reducing avoidable EMS and ED utilization is feasible and can be achieved by doing the

following: expanding access to care for disadvantaged populations, creating a communications

network between hospitals, switching to an integrated and value-based system of patient care,

and by incorporating ambulance based community programs for super-utilizers. Expanding

access to primary care would be the first step in the process. If patients are to be diverted from

using the more expensive services in the ED, then they have to have a place to go to instead. The

first method by which access to care can be improved by is extending primary care hours to

cover evenings and weekends. According to CMS (2014), two-thirds of all visits to the

emergency room occur after business hours. It is estimated that an annual net savings of $4.4

billion can be realized if this type of access was increased (CMS, 2014). In a rural area of

Georgia, four clinics were opened with extended hours and as a result over a 3-year period,

33,000 patients were served with savings of approximately $7.3 million (CMS, 2014).

Another problem that is often encountered with access to care is the lack of same day

appointments. Patients who are experiencing a medical event of some kind and are ready to go to

the ED are not likely to wait for weeks or even days to get an appointment with their doctor. To

solve this problem, a system called open-access can be implemented. Open-access is a

scheduling model that a number of medical practices use to consistently offer their patients same

day appointments. This system works by allowing the majority of time slots to be available for

same or next day appointments. The other portion of the time slots, which is smaller, remains

reserved for patients who want to schedule further in advance. In addition, in the open-access

model, all appointment types are the same and interchangeable which allows for maximum

flexibility (Carlson, 2002). This is in stark contrast to conventional scheduling practices, where

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provider’s book appointments by type and assorted exclusion and inclusion criteria make the

system uncompromising and appointments difficult to move around (Carlson, 2002). Data

clearly shows that open-access scheduling is profitable and generally drops the number of no-

shows from approximately 20 percent to nearly zero (Jones, 2014). Going to this type of system

would significantly benefit patients as well as providers.

The second step in reducing avoidable costs associated with the use of EMS and the ED

is to build a communications network between all the hospitals. Due to the scope of this

endeavor, the state may have the best advantage and the necessary authority to accomplish

developing such a network. A network that includes all area hospitals would be instrumental in

identifying super-utilizers and individuals who frequent many different hospitals on a regular

basis. After these individuals were identified, they could then be referred to a caseworker or a

community paramedic program where they would receive one-on-one education and instruction

on how to manage their health. The state of Washington has this kind of network in place and

they use hospital personnel to help direct patients to a primary care clinic as well as to provide

education (Ollove, 2015), which is also a viable option.

The third step is to establish Accountable Care Organizations (ACOs) and/or any other

type of value-based care system that would encourage the formation of programs that could

individually work with patients to address their medical needs and their inability to effectively

manage their health. This could take on many different forms as each population greatly varies

by location and culture. In Oregon, CCO’s developed at the state level have been the driving

force behind the one-on-one care being done by community health workers while in Maryland,

the federally implemented value-based reimbursement system is what is triggering hospitals to

pursue free in-home health and individualized care through caseworkers. Having some type of

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value-based system in place is important because it is what provides incentive for physicians to

coordinate care and to work with patients to stop unnecessary over-utilization. In a value-based

system, coordinating care is key, which is why all kinds of relationships are being created with

both public and private health organizations opening doors for new and innovative ways to

provide better care and to decrease spending.

The last step in decreasing unnecessary ED costs and EMS transports is to incorporate

more ambulance based community paramedic programs, such as the one MedStar began in

Texas. Many super-utilizers of the ED are also super-utilizers of 911 ambulances, especially

when it comes to disadvantaged populations who may lack their own transportation (Ollove,

2015). Moreover, patients who are prone to using the ED for their primary care needs often go

to multiple different hospitals, which puts the ambulance companies in the best position to more

quickly identify who these individual are. Once identified, these individuals can be enrolled in a

community paramedic program, which will provide them with education and the necessary

management skills to successfully manage their health, all from the comfort of their own home.

Paramedics are uniquely suited for this type of program because they are mobile, have medical

training, and are experienced in providing care outside the medical setting.

Expanding access to primary care, creating a communications network, providing

healthcare on a value-based system, and integrating community paramedic programs are four

elements that are all important and necessary in decreasing avoidable ED visits and EMS

transports. While some of these elements are being applied individually, they would be most

effective when used as a collective. It is important to take note that certain elements are not

likely to exist without the other. For example, EMS companies have no incentive to create

community paramedic programs because they would not be reimbursed for those services.

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However with the development of ACO’s reimbursement becomes possible, thus making the two

rely on each other. The same can be applied to the communications network. What is the point

of communicating if there is nowhere the patient can be directed? The network depends on the

existence of primary care access, caseworkers, and community paramedic programs.

If implemented, these four elements could make a huge impact on the quality of

healthcare in the United States and the amount of money spent on it. Not only is there the

potential to cut costs by stopping unnecessary and preventable ED visits, but there is also the

potential to stop future costs that individuals with poorly managed chronic conditions will incur

in their lifetime. Catching these problem areas as early as possible and offering individuals a

chance to take their life back through personalized education and assistance will no doubt results

in a higher level of care for the patient and significant savings for the county.

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Internal Medicine, 175(3), 393-398. doi: 10.1001/jamainternmed.2014.7582

The Fiscal Times. (2013). Emergency room costs have skyrocketed to as much as $151 billion.

Retrieved from http://www.businessinsider.com/er-costs-skyrocketed-to-151-billion-

2013-4

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