(Bloomberg Politics) — Steve Klasko, the chief executive officer of Thomas Jefferson University Hospital in Philadelphia, wants to see fewer patients walking into his emergency room.
Jefferson is investing $20 million to open two urgent-care centers, including one three blocks from the existing ER, to treat patients with routine medical needs, and build a program to allow physicians to perform consultations using video apps so that other patients never have to leave home. “The best way to save the system lots of money is to keep them out of the hospital,” Klasko says.
Hospitals account for a third of the $2.9 trillion annual U.S. health-care bill. Academic medical centers such as Jefferson, which has almost 1,000 beds and $2.1 billion in operating revenue, are among the most expensive places to get care because they’re equipped to handle the most complex cases. The Patient Protection and Affordable Care Act (PPACA), combined with pressure from employers to tamp down health-care costs, is nudging providers to treat people in the lowest-cost settings possible.
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That approach, doctors and economists agree, is better for patients and is essential for controlling medical spending in the U.S., which is higher than anywhere else in the world. It isn’t, however, great for hospitals. Insurers and the government pay medical providers mostly by volume: More tests, fancier treatments, and longer hospital stays mean more revenue. That’s why many hospitals are adding capacity. Two miles west of Jefferson, the Hospital of the University of Pennsylvania is planning a new tower to accommodate more patients.
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