Freestanding emergency departments (ED) are more likely to open in areas with significantly higher household incomes, according to a new report in Health Affairs.
Researchers looked at data in Texas, which has more than 200 freestanding EDs. That's the most of any state. There are more than 400 such facilities throughout the country.
They said the freestanding EDs in Texas are concentrated in urban areas with high incomes and high rates of people with insurance. The issue of where companies are opening freestanding EDs warrants "further scrutiny by policymakers to prevent the exacerbation of disparities involving the medically underserved,” according to the report.
The study found that freestanding EDs don't usually fill a gap in emergency care because they are located in areas where residents are more likely to have insurance but less likely to be covered by Medicare or Medicaid, and where hospital-based ED wait times are not particularly high.
Researchers examined the factors that may lead to freestanding EDs opening in certain areas, including local market characteristics. In Texas, freestanding EDs are clustered around major metropolitan areas such as Houston, Dallas-Fort Worth, San Antonio and Austin.
The researchers found hospital-based ED wait times were not significantly improved in areas where freestanding EDs opened. Instead, freestanding EDs opened in markets where hospital-based ED wait times were "already shorter at the outset than they were in markets where freestanding EDs chose not to enter.”
The study authors suggested more oversight of freestanding EDs is needed. One way to do that is to require those EDs to report quality data to the CMS for its Hospital Compare program. Policymakers could link that requirement with allowing Medicare and Medicaid reimbursements for freestanding EDs, which currently don't receive payments from those public insurance programs.
“The benefit of imposing such a condition would be that the reported data would allow future researchers to compare the quality and overall value of emergency care delivered by hospital-based EDs, satellite emergency centers and independent freestanding emergency centers,” the study authors said.
Though about half of freestanding EDs are located in Texas, the facilities are popping up all over the country. It’s not just independent companies opening freestanding EDs either. Health systems like HCA Healthcare are opening freestanding centers and multiple systems in Tennessee are eyeing freestanding EDs in the Memphis area.
This trend is not so much about reducing hospital-based EDs, as the study confirmed. Instead, these facilities seek to provide care for lower costs than a hospital-based ED, which has more overhead than a freestanding ED. The lower cost is leading payers to push for more services to take place at the independent EDs and in outpatient settings in general.
However, there are still questions about whether freestanding EDs save money. A controversial report published earlier this year in the Annals of Emergency Medicine found patients at freestanding EDs can pay significantly more than those at hospital-based departments. The study is undergoing editorial review.