Outpatient Services

Ambulatory visits can occur in multiple settings, including a physician’s offices, emergency rooms and hospital outpatient clinics.  A Statistical Brief issued by AHRQ examines utilization and costs associated with each type of setting, based on the 2008 MEPS data.   (AHRQ Report) There were about 1.09 billion ambulatory visits that year, about 90.7% occurred in physician offices, 4.9% in hospital outpatient and 4.4% in emergency rooms.  Those visits cost a total of $309 billion, but only 63.5% of that expense is in the physician office visits, 22% is in the hospital outpatient and 14.4% in the ER.

The average cost for a visit was $199 in a physician office, $922 in an emergency room and $1,275 in an outpatient setting.  Median expenses were much smaller in all three settings, indicating that a few high cost visits skew the average.  In addition, ambulatory visits in the hospital were more likely to involve some surgical procedure, which greatly adds to cost.  While almost 28% of hospital ambulatory encounters included a surgery, only 7% of ER ones and 3.8% of physician office ones did.  If no surgery was involved, ER visits were the most expensive on average.  Out-of-pocket expense was incurred in 56% of physician office visits, 42% of ER visits and 42% of  hospital ambulatory encounters, but the average expense per visit when there was an out-of-pocket amount due was much higher in hospitals and ERs, $242 and $228 respectively, versus $50 in a physician office.

ERs had the highest proportion of their overall visits from children and their lowest from people over 65, who have Medicare coverage.  As expected, ERs have the highest proportion of visits from the uninsured.  While there is definitely a subset of visits that have to occur in the ER or the hospital, you can see that being able to move those that don’t to the physician office would create very significant savings.  Using the median cost, for example, every million hospital visits moved would save $165 million and every million ER visits would save $317 million.  Given that there are around 50 million hospital encounters and 45 million ER ones, changing the site for 10 or 20% of those would save billions of dollars.