If you're handed an emergency room (ER) report showing rising costs and the first instinct is to increase the ER copay, take a stepback. Before making plan design changes, it's important to understand what'sdriving the trend.

Cost vs. Utilization: Start with the Basics

Rising ER spend doesn't automatically mean members are overusing or abusing the ER. Total costs are often presented by two factors:

1. Use - how often members are visiting the ER
2. Cost - how much each visit costs (per visit basis)

The first question should be whether utilization is truly increasing. Rather than focusing on total visits, evaluate visits per 1,000 members to account for workforce growth, demographic shifts, and enrollment changes. Normalizing utilization rates allows for a more accurate assessment.

When reviewing utilization, focus on visits that are realistically actionable. While one could make a case that virtual care can support many situations; member circumstances, preferences, and access barriers need to be considered.

Side Quest! - Examine Days of the Week

If the info is available, analyze:

·       ER visits by day of the week

·       Weekend and holiday utilization patterns

·       Friday and Monday spikes

·       Visits occurring outside urgent care or primary care operating hours

These patterns can reveal whether utilization is driven by convenience, access challenges, or limited care alternatives. Understanding when members seek care often provides valuable context that raw utilization numbers cannot.

Financial Data and Clinical Data Tell Different Stories

A big mistake is assuming a high-cost ER visit represents utilization which needs to be impacted and may be inappropriate.

However, if you think about a true ‘emergent’ claim, pricing metrics aside, that claim could involve imaging, lab work, IV therapies, observation, specialist consultations, or emergency interventions. In these cases, the ER functioned exactly as intended and without getting into specifics, probably does have a notable cost associated with it. The more severe ER cases are, the higher the cost, but also the more warranted ER visit.

Conversely, a relatively low-cost visit may represent care that could have been delivered in a lower-acuity setting or avoided altogether which doesn’t include markers for emergency intervention.

Cost alone does not determine whether utilization was appropriate. Clinical context matters.

Use Clinical Classification Tools

Many carriers and analytics vendors categorize ER visitsbased on clinical necessity. These tools can help determine:

• Which visits were truly emergent
• Which were potentially avoidable – based on service or diagnosis markers
• Which could have been treated in primary care

This level of analysis is far more meaningful than reviewing costs and visit counts alone.

Identify Chronic Condition Drivers

Another valuable exercise is identifying the diagnoses most frequently contributing to ER utilization.

Common examples include:

• Asthma exacerbations
• Diabetes complications
• Behavioral health crises
• Reoccurring Migraines
• Frequent Visits for MSK (musculoskeletal) related pain
• Multiple urinary tract infections

Recurring diagnoses can indicate opportunities foreducation, preventive care, disease management, or targeted interventions. Rather than broadly increasing member costs, organizations may achieve better outcomes by addressing the conditions driving avoidable utilization.

Review Frequent ER Users

A small number of members often account for a disproportionate share of ER visits. Questions worth exploring include:

• Are members repeatedly visiting for the same condition?
• Do they have an established PCP?
  
  • Are they even attributed to a primary care provider?
• Are behavioral health concerns or social determinates of health contributing to utilization?

In many cases, proactive support pathways/relationships and care coordination can be more effective than broad plan design changes.

Use Benchmarks Carefully

Benchmarks provide useful context, but they should not beviewed as absolute targets. Every population is unique, and utilization patterns should always be evaluated relative to the needs and characteristics of the group being served.

The goal is not simply reducing ER visits. The goal is determining whether utilization is appropriate and identifying opportunities to improve member outcomes.

Ask the Right Questions

Before making plan changes, consider the following:

• Are members repeatedly visiting for the same condition?
• Do they have an established PCP?
• Are visits occurring when alternative care options aren't available?
• Is a chronic condition poorly managed?
• Are mental health or personal challenges contributing to repeated ER visits?

The goal isn't simply to reduce ER visits, it's to ensure employees receive the right care at the right time while managing health effectively.

The Response

Once the drivers of ER utilization are understood, organizations can begin implementing targeted solutions. Educational efforts can help members better understand appropriate care settings, chronic condition management, medication adherence, and preventive care opportunities. Employers can also partner with health systems, community organizations, and condition-specific programs focused on populations managing diabetes, asthma, hypertension, and other chronic conditions commonly associated with recurring ER utilization.

Strengthening primary care engagement should be another key priority. Connecting members to a consistent PCP, implementing Direct-to-Primary care models, and expanding virtual care access can provide effective alternatives to non-emergent ER visits while improving access to timely care. For frequent ER users or individuals with complex needs, partnering with care management teams can provide personalized outreach, care coordination, and navigation support that addresses clinical, behavioral, and social determinants of health. Together, these strategies can reduce avoidable ER utilization while improving both member experience and overall healthoutcomes.

If these trends sound familiar within your own population, OVD would welcome the opportunity to help analyze your data and identify actionable solutions.

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