Emergency departments: The economic engine of hospitals - Evidence from California

It is important that policy makers, emergency physicians, hospital administrators, and health system planners understand the expanded role of hospital emergency departments (EDs).

We sought to document the expanded role hospital EDs and their economic impact on overall hospital activity between 2002 and 2017.

This is a retrospective analysis of hospital ED capacity, utilization, and financial data from all general acute care hospitals in California (2002 through 2017). We calculate changes in ED capacity, annual ED visits and admissions through the ED, and the share of total hospital charges associated with ED generated utilization.

EDs now account for well over half of all inpatient admissions to the hospital and ED outpatient visit volume has also grown substantially over time. By 2017 EDs within California's general acute care hospitals generated 67% of the total hospital economic activity (as measured by charges), up from 40% in 2002.

Overall, our data reveal that EDs are now the economic engine of hospitals and play a much larger role in the overall health care system, suggesting many unexplored policy, manpower, market, and health system design implications for further research.