Paying for hospital emergency care under a single-payer system

Hospital emergency services are one of the key drivers of hospital activity, yet there has been surprisingly little attention paid to appropriate funding models for single-payer systems, in which funders must be concerned with issues of access and financial viability of emergency departments. This article analyzes the dynamics of hospital emergency services in terms of the key products and cost drivers. It reviews the currently available systems for categorizing emergency activity and evaluates their applicability for funding purposes with particular emphasis on the susceptibility to gaming of both triage and disposition. It identifies and evaluates 3 models for use in single-payer health systems for funding hospital emergency services (fully variable, fully fixed, and mixed variable/fixed) in terms of the key products and cost drivers in the ED. Approaches to the setting and rebasing of fixed grants are considered. Problems of potential incentive effects and double payment for admitted patients make the setting of variable payments problematic, particularly for patients subsequently admitted as inpatients. Key characteristics of an ED funding model in single-payer systems are proposed.