Freestanding Emergency Rooms: An Emerging Trend

Despite reports of the nation’s “physician shortage,” the number of convenient health care options accessible to consumers continues to get larger.

This includes not just urgent care centers but also retail‐host clinics, walk‐in family practice offices, hospital emergency fast‐tracks, and pediatric after‐hours facilities.

Rising demand for health care has been fueled by aging baby boomers, lifestyle‐induced illness, and the promise of greater insurance coverage under health care reform.

This is leading hospitals, patients, physicians and entrepreneurs to respond to consumer needs with new and innovative delivery models. One new and emerging model is the “freestanding emergency room.”

Freestanding Emergency Room Operating Model Defined

Freestanding emergency centers are walk‐in medical facilities that are structurally separate and distinct from a hospital. They specifically provide emergency care to the general public just like a standard hospital emergency room. Like hospital emergency departments, freestanding ER’s are fully‐equipped to diagnose and stabilize cardiac arrest, stroke symptoms, breathing problems and trauma. One large difference is that ambulances do not bring patients to the center and the patients requiring hospital admission, surgery or specialist care are transferred by paramedic to a higher‐acuity facility.

Freestanding ER’s are currently available in about 16 states and are operated by hospitals, physicians, and non‐physician entrepreneurs. The capabilities and offerings that urgent care centers offer varies from location to location.

The operating model of freestanding emergency centers also varies depending on the ownership, location and size, competition, and target patient demographics of the facility.

Although they market themselves as “full service emergency rooms”, the biggest differences between freestanding ERs and hospital EDs generally pertain to:

• Capacity and volume
• Ambulance service
• Hospital admission rates
• Length of stay
• Patient acuity
• Positioning and accessibility relative to Medicaid and indigent poor populations

Considering these differences, one may speculate that freestanding ERs have more in common with urgent care centers than with hospital EDs. However, what differentiates freestanding ERs from urgent care is what the freestanding ERs do have in common with hospital EDs—24 hour/365 day operations, insurance contracting as an ER including ER co‐pay charged, separate facility and professional fees charged, staffing by emergency physicians and nurses, and advanced lifesaving, imaging and laboratory capabilities.

Freestanding Emergency Room Patient Demographics

Houston, Texas—the nation’s fourth largest metropolitan area with a population of more than 6,000,000 people covering 1,200 square miles—is currently a large area of freestanding emergency center activity. In recent years, Houston‐based hospitals, physician groups and entrepreneurs have opened almost 35 freestanding emergency centers in the region, a quarter of which are hospital‐affiliated.

Evaluating the residential demographics around freestanding ERs in Greater Houston demonstrates the centers are not located to serve the Medicaid and indigent populations who depend on the “safety net” of urban hospital emergency rooms. Rather, the typical freestanding ER site is a high‐traffic, high‐visibility retail strip serving well‐established, high‐income, high density residential areas.

True to a more affluent consumer base, many Houston‐area emergency centers tend to upgrade their branding and facility décor with luxury furnishings, granite countertops, free wireless Internet access, exam room cable television, gourmet coffee and refreshment bars, children’s play areas and pediatric‐themed rooms.

The experience is more reminiscent of a “day spa” than a cold, sterile hospital emergency room. Given locations and facilities that appeal to upper‐income consumers, a conclusion may be reached that time‐starved professionals with employer‐paid insurance are undeterred by emergency room co‐pays if they believe a freestanding ER has shorter wait times, more sophisticated capabilities, and better qualified providers than other options. This includes urgent care centers—regardless of whether such capabilities are needed for their conditions, or whether their perceptions are even reality.

Factors Driving the Freestanding Emergency Room Phenomenon

In addition to an affluent, educated, professional population, three other factors are driving the freestanding ER business in Houston—a central concentration of the medical community, geographical dispersion of residents, and rapid population growth.

Houston is home to the Texas Medical Center, the nation’s largest integrated health complex with 49 world‐class research institutions, 14 hospitals, and two medical schools—including the Texas Heart Institute, M.D. Anderson Cancer Center, and Baylor College of Medicine. But because so much of Houston’s medical community is concentrated in one area, hospitals have turned to ambulatory strategies to serve patients and capture referrals from the geographically dispersed suburbs. Freestanding ER’s serve as a convenient entry point to a hospital’s specialists without the risk of
building and staffing a suburban hospital.

Note: this blog post has taken excerpts from a study by the Urgent Care Association of America