Hospitals and health care systems with ambulatory clinics can meet a breadth of medical care needs ranging from treating an earache to managing a trauma from a major accident. Hospital emergency departments are staffed with qualified emergency physicians and advanced practitioners to address highly acute to critical issues 24/7, urgent care facilities and retail clinics are equipped to treat episodic conditions requiring immediate care. Though not as prolific, Free Standing Emergency Departments (FSEDs) are an alternative care venue for emergency medical situations.
What is a FSED?
The American Hospital Association (AHA) defines a FSED as “a facility that provides unscheduled outpatient services to patients whose conditions require immediate care in a setting that is geographically removed from a hospital… (FSEDs) can be either independently licensed facilities or satellite hospital emergency departments (EDs) that are physically separate and distinct from the conventional hospital ED.”
Free Standing Emergency Departments have risen in popularity over the last decade to increase access to emergent care services in communities with limited hospital-based emergency departments. The growth of the FSED has also been in response to increasing consumerism and demand for convenience. So, it is of no surprise that FSEDs are marketed as a more convenient emergency site of care promising shorter wait times and customer-friendly payment plans.
Since 2008, FSEDs have proliferated, growing more than 155%, with much of this surge occurring in Texas, the first state to permit FSEDs. According to UnitedHealth Group there are now at least 566 FSEDs in the US, with approximately 266 in Texas. With relatively low barriers to entry, these high profit care models are often independently owned and highly attractive to investors. According to Becker’s Hospital Review, nationally, 30% of FSEDs are investor owned.
Roles and Regulations
The role of FSEDs is highly dependent on state regulations and local market characteristics. Traditional, hospital-based emergency departments are federally required to treat all patients, regardless of ability to pay. FSEDs are not subject to this requirement and are therefore able to limit their care to only those who do have private insurance unless they are hospital affiliated, which some states like Ohio require. In states such as Texas, where there is no hospital-affiliation requirement, the vast majority of FSEDs are for-profit, non-hospital affiliated. Geographically, these facilities are positioned to cater to patient populations that seek and can afford convenient emergent care services. They are often clustered in high density populations which allow them to take advantage of certain economies of scale.
Despite being equipped to care for emergent needs, not all cases may be appropriately cared for at an FSED, however. Higher acuity situations such as stroke or cardiac arrest that require an immediate transfer to a hospital may be better suited for hospital based-EDs. Because of such cases, California is one state which stipulates that all EDs have both surgical and intensive care, and therefore do not allow FSEDs to operate. And in states like Ohio, where hospital affiliation is mandated, the FSEDs appear in zip codes that lack hospital based EDs and serve to increase access to emergent care. States like Texas lack these requirements– focusing on access to emergent care services with differentiated convenience for commercially insured and self-pay patients that do not require hospital transfers, leaving hospital-based emergent departments in these areas to see a higher mix of patients that are unable to pay.
FSED versus Urgent Care
FSEDS are an attractive option for many patients who want to skip the long wait times typical of hospital based EDs. But what constitutes a trip to the FSED vs the urgent care on the opposite corner and how does the delivery of care (and cost) compare? There have been numerous news articles about consumers who do not understand the difference between urgent care and ED’s and are surprised when they receive a large bill.
A study by Weinick, Burns and Mehrotra, found that urgent care clinics could potentially care for between one sixth to one quarter of all ED visits, helping to ease hospital-based ED congestion at a lower cost of care. According to a separate study published by The Annals of Emergency Medicine, there was a significant overlap (75%) in the diagnoses presented in FSEDs versus in urgent cares and 60% between hospital EDs and urgent care. The study, which focused on trends in Texas, found that over a 4-year period, the average cost was comparable between FSEDs and Hospital Eds and both FSED and Hospital ED costs were 10 times higher than the cost at urgent care. And in this study, the facility fee accounted for nearly 80% of the encounter charge and was driven by the level type used during billing. The higher the level number (4 or 5) the higher the charge to the insurer and to the patient.
Conclusion
As patients continue to navigate the ever complex health care system, helping them understand options and the value of different sites of care is vital to curbing costs and increasing access to high quality, timely and appropriate care. Hospitals and health care systems would be served well by offering urgent care options to their patients in proximity to their own hospitals to improve patient throughput and relieving busy EDs from non-emergent episodic conditions requiring immediate care. They may also consider expanding into suburban areas with their own FSED models which will capture the referral of highly complex patients with multiple comorbidities to their flagship site. For those developing privately owned FSEDs it is critical to understand that the competitive advantage over hospital based EDs may not only be by creating differentiation in convenience and timeliness but to be a lower cost alternative as well.
Are you considering adding an FSED or an urgent care facility to your hospital system? The Innova Group has accumulated years of information, data and current healthcare trends to determine the proper size and scale of your future health care delivery system. E-mail us at innova@theinnovagroup.com to learn more about how we can help you with your health care planning.
Sources:
Ho, Vivian PhD, Metcalfe, Leanne PhD et al. “Comparing Utilization and Costs of Care in Freestanding Emergency Departments, Hospital Emergency Departments, and Urgent Care Centers”. Annals of Emergency Medicine, vol. 70, no.6, 2017, pp 846-857.
Schuur, Jeremiah MD, MHS, Baker, Olesya PhD et al. “Where Do Freestanding Emergency Departments Choose to Locate? A National Inventory and Geographic Analysis in Three States”. Annals of Emergency Medicine, Scholar.Harvard.Edu
By Bryan Hannley PT, MBA | January 2020
