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Freestanding Emergency Departments Slow to Reach Rural U.S.

In some states, the freestanding emergency department (FSED) movement is quickly catching on. Currently Texas has over 200 of these “hub hospitals” and other states, such as Colorado and Ohio, are also experiencing steady FSED growth.

Researchers with Brigham and Women’s Hospital conducted a study that found the number of stand-alone emergency departments grew from 222 in 2009 to 360 across 30 states as of March 2015. Texas currently houses a large majority of FSEDs, driven by a 2009 law that allowed private, for-profit ventures to provide the kind of emergency services that hospitals offer.

HCA Expanding

Recognizing this trend, HCA Holdings recently announced plans to spend $2.7 billion to expand patient access in its FSED markets. The Nashville-based, investor-owned hospital chain says it will develop more than a dozen free-standing emergency rooms in its markets through 2017 to go along with the 57 currently open. Ambulatory surgery centers, urgent-care centers, diagnostic centers and new hospital wings to provide convenience will also be added during this expansion.

Though healthcare demand has been up 4% and more across the country, HCA estimates this number is likely to taper to a more traditional 2% rate and wants to be ready to capture those patients at any point in the continuum. HCA has 169 hospitals and facilities developed over the past nine years, but says in the past two years business has especially benefited from the growing economy, Medicaid expansions in some states and the newly insured from the ACA exchanges.

HCA says it has largely avoided buying hospitals to concentrate on building out delivery networks around its big city hubs, including Miami, Dallas, Houston, Tampa, San Antonio, Nashville and Richmond, Va.

Uneven Expansion

While the business of FSER is seemingly booming in urban locals, critics say the trend has done little to help those in rural areas with dire medical needs, while it monopolizes skilled ER physicians and often leaves the patient with significant medical expenses.

An analysis by the Colorado-based Center for Improving Value in Health Care found the cost of treatment at FSERs exceeded urgent care center rates by $400 to more than $800. Grant Douglass, president of Southwest Medical Associates, estimates that at least 1,500 doctors have been lured from Texas hospitals with the promise of better pay, less stress and a smaller volume of patients.

“It’s created a tremendous strain on us to staff the small rural (hospitals),” Douglass said, adding that his company often must double the pay of doctors to ensure it can provide adequate staffing levels for hospitals.

FSERs located in zip codes with an attractive payer mix typically have more patients with private insurance, higher incomes and fewer Medicaid reimbursements. According to lead author of the Brigham and Women’s study, Dr. Jeremiah Schuur, the are also more likely to open in areas already served by traditional hospital emergency rooms.

“Depending on your viewpoint, they offer competition or a duplication of services,” says Schuur, “It is important for policymakers to know that this is a service that’s locating to serve one part of the population and not everyone.”


Source(s): Rice, Sabriya, “Are Free-Standing Emergency Rooms Helping Only the Wealthy?” Dallas Morning, August 2, 2016; “As the Number of Freestanding ERs Grows, so Does Scrutiny,” Health Leaders Media, August 22, 2016; Barkholz, Dave, “HCA Pouring $2.7 Billion into Hub Hospitals and Markets,” Modern Healthcare, September 8, 2016