Variation and Drivers of Spending Within 30-Day Emergency Department-Based Episodes of Care

Abstract Background Emergency department (ED) visits are a common starting point for treatment of acute illness and may set a trajectory of care with substantial implications for quality and cost. Yet ED visits are rarely used to define episodes of care. Objective To examine hospital-level variation in ED-based episode spending and its drivers for commonly encountered conditions of congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), and pneumonia. Design Claims-based, cross-sectional study of 83 Michigan hospitals. Participants Adult ED patients with CHF (n = 150, 385), COPD (n = 156, 833), and pneumonia (n = 114, 867) between 2017 and 2022. Main Measures Outcomes were risk-adjusted, price-standardized, 30-day total and component (index ED and hospitalization if present, post-acute care, post-index hospitalization, professional services) ED-based episode payments. Key Results Hospitals in the highest vs lowest payment quartiles had mean total episode payments of 19, 397 vs 14, 601 for CHF (difference 24. 7%, P < 0. 001), 13, 048 vs 8, 723 for COPD (difference 33. 1%, P < 0. 001), and 13, 466 vs 9, 168 for pneumonia (difference 31. 9%, P < 0. 001). For CHF, high-payment hospitals had 33. 3% higher index ED/hospitalization costs, 15. 3% higher post-acute care costs, and 33. 4% higher professional fees, with similar post-index hospitalization costs. Patterns were consistent across conditions, although post-index payments varied more for COPD and pneumonia. Index ED/hospitalization payments were strongly correlated with total episode payments (CHF: r = 0. 82; COPD: r = 0. 90; pneumonia: r = 0. 80; all P < 0. 001). Conclusions ED-based 30-day episode payments vary substantially across hospitals for CHF, COPD, and pneumonia, largely driven by costs from the ED visit and associated hospitalization. Future work should assess whether this variation reflects differences in quality or efficiency.