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Breaking News: Could Freestanding EDs Be Good for EPs?

Shaw, Gina

doi: 10.1097/01.EEM.0000434471.21956.8b
Breaking News
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Eric McLaughlin, MD, used to plod home and crash at the end of his shift in the emergency department at the Kingwood Medical Center northeast of Houston, barely waking up in time for the next shift. He fretted about burnout after only 10 years in practice, and wondered if he would need to retire or change career paths before 50. He'd duck and dodge when anyone asked him if he would “do it all over again.”

That was about four years ago. Today, Dr. McLaughlin has time for the gym and dinner with friends. “I see myself working a longer and more fulfilling career,” he said. “I can't imagine a day when I will walk away from all this and be glad that I don't have to go back again. In a heartbeat, I'd sign up all over again. I'm having fun. I love my job.”

The difference? Dr. McLaughlin no longer works in a hospital-based ED, or at least not most of the time. He still occasionally picks up shifts at Kingwood, but the lion's share of his focus is spent on Elite Care Emergency Centers, a privately owned group of freestanding emergency rooms with six locations in the Dallas, Houston, and San Antonio area. He's a part owner of Elite and the medical director of the group's Houston-area Rice Village location.

“Almost every physician in the freestanding ED world says, ‘This is the way I always hoped emergency medicine would be,’” Dr. McLaughlin said. “If you had control over the marketing, the patient satisfaction, if the buck stopped with you, this is how you'd do it. Every patient gets treated as a client. It's so satisfying to work with a staff that has very high morale and the highest level of training. There's very little turnover among staff. Patients are grateful — they only waited five minutes to see you. Our philosophy is a patient-centered approach to emergency medicine.”

Sounds like utopia, but not everyone sees it that way. The rapid growth of freestanding emergency departments over the past decade has provoked fears that they may threaten the solvency of existing hospital-based EDs by “poaching” patients with greater resources, and leaving the hospital EDs with a larger proportion of their patients uninsured and unable to pay. After all, a 2011 study found that the presence of at least two emergency departments within a market increased the likelihood that one would close. (JAMA 2011;305[19]:1978.)

Meanwhile, some freestanding EDs have been accused of inflating their costs and charging excessive and unjustified “facility fees” as if they were associated with full-service hospitals. Aetna last year sued physicians who operate two freestanding Texas EDs, Trinity Healthcare Network and ER Doc 24/7, along with a hospital that the insurer says engaged in a sham management contract with the EDs to obtain facility fees using the hospital's tax ID number as a “front.” (Aetna's attorney did not return calls seeking comment.)

So what's the reality? Are freestanding EDs the new paradise for emergency physicians and patients, or are they shooting down beleaguered hospital-based EDs?

The answer is at neither extreme — and to some extent, there still isn't an answer. That's in part because a lot of numbers related to freestanding emergency departments are murky at best.

There are two primary kinds of freestanding EDs, says Carlos Camargo, MD, MPH, PhD, an associate professor of medicine and epidemiology at Harvard Medical School and an emergency physician at the Massachusetts General Hospital in Boston who founded and directs the Emergency Medicine Network (EMNet). “But the distinction is often not recognized, and the existing data are terrible.”

One recent American Hospital Association survey listed 191 hospitals operating some type of freestanding ED. “We looked at the AHA data set, and only 56 of those actually were freestanding EDs,” Dr. Camargo said. The number of hospitals with satellite EDs is above 200 in the latest AHA figures, but the question of accuracy remains. Dr. Camargo's study combined the 2007 AHA survey with the 2007 National Emergency Department Inventory-USA database, and used Internet searches and telephone research. They found 80 freestanding EDs, mostly hospital satellites, operating in 2007. (J Emerg Med 2012;43[6]:1175.)

Meanwhile, a 2009 report from the California HealthCare Foundation found approximately 31 freestanding EDs in the United States, mostly in Texas, which has a rapidly-growing population, a business-friendly environment, and does not require a certificate of need to open such facilities. Today, reports indicate that the Houston area alone has at least four dozen privately owned freestanding EDs, but again, no reliable regular surveys track these facilities nationwide.

A picture does start to emerge, however, based on the chunks of data out there. It's certainly true that freestanding EDs are far more likely to pop up in underserved communities that are well insured, said Emily Carrier, MD, an emergency physician and senior health researcher at the Center for Studying Health System Change in Washington, DC, who co-authored a 2012 study on hospital expansion.

“Hospital executives will say, ‘This was a rapidly growing community, and we felt we were needed,’” when they open a satellite ED, Dr. Carrier said. (None of the communities in her survey had privately-owned freestanding EDs.) “Still, they tended to open in communities that were fairly well insured. We didn't find examples of freestanding EDs being opened in relatively uninsured areas that had similar needs for additional access.”

On the other hand, while they may be serving a more upscale population, no evidence so far suggests that freestanding EDs have driven up the overall percentage of non-paying patients at hospital-based EDs. Charles Begley, PhD, a professor of management, policy, and community health at the University of Texas Health Science Center at the Houston School of Public Health, does an annual survey of 26 hospitals that represents two-thirds of all hospital-based ED visits in the metropolitan Houston area. “With data through 2011, we show no evidence of an upward shift in the percentage of [hospital-based] ED visits by the uninsured,” he said. “The percentage continues to be about 35 percent.” He cautioned, however, that they didn't break down the data to compare urban-core EDs with suburban EDs.

Freestanding EDs in the Akron, OH, area also don't appear to be a threat to existing emergency departments, said Erin Simon, DO, an emergency physician and the emergency medicine research director at Akron General Medical Center and a clinical assistant professor of emergency medicine at Northeast Ohio Medical University. Akron General has opened three freestanding satellite EDs since 2007, and all have been very successful, with patient volume between 14,000 and 20,000 visits per year and Press Ganey scores in the 99th percentile, significantly besting the widely-fluctuating patient satisfaction scores for the main ED using the same emergency physicians. “We attribute part of our freestanding ED success to our turnaround times which are under 90 minutes for treated and released patients. No hospital-based EDs have closed in our area since those freestanding EDs have opened,” Dr. Simon reported.

But has the patient mix changed? That's unknown at this point. Dr. Simon is in the process of collecting data to see if patients with insurance are fleeing the main ED in Akron for the three suburban satellite EDs.

A freestanding ED for some hospitals is much more than just an emergency department. Seattle's Swedish Medical Center has opened three freestanding EDs since 2005. The first, in Issaquah, helped to establish Swedish's presence in that market while the medical center prepared to open a 175-bed community hospital there. The freestanding ED became its traditional ED when that facility opened.

The other two freestanding EDs, in Microsoft-wealthy Redmond (remember Dr. Carrier's point that freestanding EDs don't usually open in substantially uninsured areas?) and more geographically isolated Mill Creek, also boast primary care and common subspecialty services, as well as imaging suites and urgent care facilities. Mill Creek, because of its location, also has a 23-hour observation unit.

“It cost us $400 million to build the new hospital,” said John Milne, MD, the chair of emergency medicine for Swedish Medical Center-Issaquah. “The freestanding EDs, on the other hand, can be put up for $25-30 million all in, a fraction of the cost of a full hospital, but relatively speaking, giving the community almost all of the same services minus the inpatient bed capacity. It's a very economical way to provide an enhanced level of service at a much lower fixed infrastructure cost.”

Freestanding EDs can also represent a sort of hothouse for new models of ED care, Dr. Milne suggested. “For example, in our freestanding EDs, we use a process called ‘swarming,’ where the nurses, physicians, and technicians all see the patient simultaneously when he first arrives. You have triage, physician assessment, and order development all in that first 15 minutes. The same process downtown, done sequentially, takes 45-50 minutes.”

Not every community welcomes the freestanding EDs. Last December, Georgia denied a request by HCA's Eastside Medical Center, located in the Atlanta suburb of Snellville, to build a freestanding ED in nearby Loganville, saying that the area's emergency care needs were sufficiently served. Other states have strict regulatory requirements for these facilities. Illinois has no independently owned freestanding EDs, for example, because the state requires the facilities to be hospital-owned and located within 20 miles of the primary ED and not marketed as a hospital ED.

The big question in states that do allow independent freestanding EDs is whether they offer a full suite of services and are willing to expose themselves to EMTALA-based criteria, said Dr. Milne. “Because of our regulatory environment, we don't have independently-owned freestanding EDs in Washington. But in other states, I have seen some facilities that accept all Medicare, Medicaid, and uninsured patients. They take care of everybody who walks in the door just like hospital-based facilities. They have transfer agreements and call panels just like hospital facilities. They are the ones trying to do it the right way. But others just want to take care of insured patients and charge full ER rates to do it without full backup in place.”

Elite Care is one of the former, said Dr. McLaughlin. Texas' freestanding ED statute does not require them to live up to EMTALA, but they do so anyway. “We never turn away anyone with a potential emergency, regardless of ability to pay,” he said. “That's why we went into emergency medicine. It's the right thing to do.”

Dr. McLaughlin said the freestanding ED model thrives in markets where other EDs have become the option of last resort: “Where wait times are long, where staff morale is poor, where patients are typically upset about the wait and other factors,” he said. “If every hospital became comfortable, staff were pleasant and acted pleased to greet each patient as he walked in, if labs had turnaround time of 15 minutes and follow-up appointments with specialists were made before leaving facility, freestanding EDs would have to be in heavy competition with big hospitals. But they can't do that, and they never will.”

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