Variation and Drivers of Spending Within 30-Day Emergency Department-Based Episodes of Care

Emergency department (ED) visits are a starting point for treatment of acute illness and may set a trajectory of care with substantial implications for quality and cost. Episode of care models, a strategy for measuring population-level utilization and quality associated with the full treatment of an illness, are a promising method for characterizing ED care with the goal of identifying sources of variability and targets for improvement. We therefore examined hospital-level variation in ED-based episode spending and its drivers focused on 3 conditions which are often targets of quality measurement and bundled payment programs: congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), and pneumonia.

We conducted a multi-payer, claims-based, cross-sectional study of 83 Michigan hospitals. Participants were adult ED patients with CHF (n = 150,385), COPD (n = 156,833), and pneumonia (n = 114,867) between 2017-2022. Outcomes were risk-adjusted, price-standardized, 30-day total and component (index ED and hospitalization if present, post-acute care, post-index hospitalization, professional services) ED-based episode payments. Risk adjustment models included patient age, gender, comorbidities, payer type, and prior 6-month health care payments and were fitted to generate expected payment values for health care utilization within each episode.

Hospitals in the highest vs. lowest payment quartiles had mean total episode payments of $19,397 vs. $14,601 for CHF (difference 24.7%, P<0.001), $13,048 vs. $8,723 for COPD (difference 33.1%, P<0.001), and $13,466 vs. $9,168 for pneumonia (difference 31.9%, P<0.001). For CHF, high-payment hospitals had 33.3% higher index ED/hospitalization costs, 15.3% higher post-acute care costs, and 33.4% higher professional fees, with similar post-index hospitalization costs. Patterns were consistent across conditions, although post-index payments varied more for COPD and pneumonia. Index ED/hospitalization payments were strongly correlated with total episode payments (CHF: r=0.82; COPD: r=0.90; pneumonia: r=0.80; all P<0.001).

ED-based 30-day episode payments vary substantially across hospitals for CHF, COPD, and pneumonia, largely driven by costs from the ED visit and associated hospitalization. Future work should assess whether this variation reflects differences in quality or efficiency.