News Release
EMBARGOED for release
Wednesday, March 24, 2004, 12:01 a.m. EST

Jon Gardner

Daniel Danzig



Study Says Patient Access, Capacity Keeping Pace
With Demand At Emergency Departments In California

Health Affairs Paper Also Says Emergency Rooms Not A Financial Drag,
Contribute To Hospitals’ Bottom Lines


BETHESDA, MD — Despite reports of closures and reduced capacity, hospital emergency departments in California have maintained capacity and patient access, and are contributing to hospitals’ profits, according to a new report published today by Health Affairs.

From 1990 to 2001 the number of California hospitals with emergency departments shrank 11.3 percent, from 405 to 359, according to the report, authored by a team of researchers from the University of Southern California and RAND with funding from the California HealthCare Foundation.

Yet the decline in the number of available emergency departments doesn’t seem to have affected emergency department capacity. During the same period, the number of available emergency department beds expanded by 20 percent, more than keeping pace with California’s population growth.

Total emergency department visits, after shrinking in the mid-1990s during the peak of the most restrictive forms of managed care, have been on the rise since 1998. In 1990–1993, visits rose 4.5 percent, while the population grew 5 percent. The 1994–1998 period saw visits fall 5.3 percent, while the population grew 4.9 percent. In 1998–2001, however, the number of emergency department visits rose 13.4 percent, outpacing population growth of 5.6 percent.

The report, published today as a Health Affairs Web exclusive, explains that much of the reduction in the number of emergency departments was related to the closure of hospitals. Only twenty-one hospitals closed emergency rooms from 1990 to 2001, and expansion of capacity in others appears to have more than offset those closures. The share of California hospitals with emergency departments shrank from 86 percent to 81 percent, but emergency department beds per 100,000 residents increased from 14.6 in 1990 to 15.1 in 2002 (peaking in 1996 at 15.3).

Access appears to have remained relatively stable. In 1990, 50 percent of the population lived 1.92 miles or less from the nearest emergency department. In 2000, that distance crept up to 2.19 miles or less, the report says.

“Although there has been turmoil at the hospital level, resulting in a net decline in both the total number of hospitals and the number with emergency departments, the remaining hospitals appear to have responded by adjusting their capacity to meet the growing demand for emergency department care,” said the report, written by a team led by Glenn Melnick, a professor in the School of Policy Planning and Development at the University of Southern California and a resident consultant at RAND.

“Overall, access to emergency departments, as measured by distance to the nearest emergency department, has remained almost constant, despite sizable population growth and shifting distributions of population within California,” the report says.

Four perspectives accompany Melnick’s report. C. Duane Dauner, president and chief executive officer of the California Healthcare Association, the state’s hospital trade group, argues that Melnick’s article does not provide a full picture of emergency care because of outdated data, among other omissions. W. Wesley Fields, president of the California chapter of the American College of Emergency Physicians, argues that capacity is not a good indicator of what is going on in emergency departments because hospitals often board patients in emergency beds until an inpatient bed is available, causing crowding in emergency rooms.

The Melnick report says that while hospitals on average lose money on each emergency department visit, they make up for it by gaining inpatient admissions. On average, hospitals lose $84 on each outpatient emergency department visit. But for every inpatient admitted through the emergency department—roughly one in seven emergency department visits results in an admission, equaling about 40 percent of those hospitals’ total admissions—the hospitals make about $1,220 in profit.

“We see no evidence that emergency departments are unable to survive as part of hospitals’ service offerings,” the report says. “In fact, our analyses suggest that emergency departments are a net contributor. Also, it appears that hospitals have recognized this and are expanding their capacity to meet growing demand.”
The financial analysis did not, however, include hospitals that are designated trauma centers because those emergency departments rely on a complex mix of state and local subsidy programs.

Melnick’s coauthors were Amar Nawathe, a resident consultant at RAND and a research associate in the USC School of Policy, Planning, and Development; Anil Bamezai a resident consultant at RAND; and Lois Green, a consultant at USC.

In addition to perspectives by Dauner and Fields, Arthur Kellermann, professor and chair of the emergency medicine department at the Emory University medical school, and Bruce Siegel, research professor at the George Washington University School of Public Health and Health Services, offer their comments. Melnick and colleagues respond to those perspectives.

The article can be read at

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.

The California HealthCare Foundation (CHCF), based in Oakland, is an independent philanthropy committed to improving California’s health care delivery and financing systems. Visit for more information.

©2004 Project HOPE–The People-to-People Health Foundation, Inc.