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Senate Bill 016 gives hospitals an emergency room monopoly

In 2013, University of Colorado School of Medicine researchers concluded that people covered by Medicaid and Medicare use emergency rooms because they lack timely access to primary care. Thanks to the Colorado legislators who voted to expand Colorado Medicaid, an estimated 275,000 more people will ultimately enroll in the program, according to estimates by the Colorado Health Foundation.

The Oregon Health Insurance Experiment showed that when non-disabled people are enrolled in Medicaid, their overall emergency room use rises by as much as 40 percent. With little or no increase in the number of primary care physicians they can see, many of them likely will seek care in already crowded emergency rooms.

Some Colorado legislators have shown impeccable timing in seeking to exacerbate the problem. Sen. Irene Aguilar, D-Denver, and Rep. Dominick Moreno, D-Commerce City, have introduced Senate Bill 016, which would force the closure of already existing freestanding emergency rooms unless they are owned by a hospital. SB 016 provides an exemption for emergency rooms more than 25 miles from a licensed hospital. Given the geographic structure of the Front Range corridor, however, the practical effect of the bill would be to give hospitals monopoly control of all emergency facilities.

Freestanding emergency rooms — some owned by hospitals and some not — already serve patients in metro Denver. They locate in areas that are underserved by the emergency rooms attached to hospitals. Different from urgent care centers, they charge more because they can do more. They typically have board-certified physicians on duty 24 hours a day, every day, and are equipped to diagnose and stabilize cardiac arrest, stroke symptoms and trauma.

Ambulances do not deliver patients to freestanding emergency rooms, and patients who arrive at them needing surgery or specialist care are transferred to hospitals. Under the federal Emergency Medical Treatment and Labor Act, all emergency rooms must treat and stabilize life-threatening conditions regardless of a patient’s ability to pay.

Without question, closing emergency rooms would harm patients. Patients visit emergency rooms because they are ill, though only about 17 percent of emergency room visits comprise conditions that result in admission to a hospital.

According to a 2013 Annals of Emergency Medicine study, patients wait longer and are more likely to leave without being seen in emergency rooms that handle large numbers of patients. As one would expect, these are often found at trauma centers. Freestanding emergency rooms can improve patient care by reducing travel times, waits for care and missed work. In doing so, they also may lessen pressures on the emergency departments that handle major trauma cases.

Why introduce a bill that harms patients? Competition from freestanding emergency rooms has the potential to reduce the amount that monopoly hospital emergency rooms can charge for their services. Like other special interest groups, Colorado’s existing hospitals have developed a loyal group of state legislators who are willing to vote for them without regard for the harm that protecting hospital cashflows inflicts on ordinary citizens in need of health care.

In 2009, these legislators supported a tax on hospital bills that had removed $2.9 billion from taxpayer wallets by 2012. Disguised as a fee to evade the Taxpayer Bill of Rights requirement for a vote on tax increases, this tax has increased health care costs. In addition, the hospitals have convinced legislators to pass laws prohibiting physician-owned specialty hospitals, even though research has shown that such hospitals help patients by improving care and reducing health care costs.

Colorado’s hospitals are big businesses. As the bill to close competitive emergency rooms shows, they would rather outlaw competitors than outproduce them. Colorado legislators need to remember that handing hospitals a monopoly over freestanding emergency rooms does not serve the best interests of their constituents. It will increase health care costs while reducing health care access, and increase the pain for ordinary citizens already suffering from Obamacare cost increases.

Linda Gorman, Ph.D., is director of the Health Care Policy Center at the Independence Institute, a free market think tank in Denver. This op-ed originally appeared in the Greeley Tribune.