Freestanding ERs clustered in wealthier areas

In 2016, there were more than 200 freestanding emergency departments (EDs) in Texas, the center of a boom in these sites of care. With far fewer restrictions on where they can be built compared to hospital-based EDs, most of these facilities have been built in areas where residents have higher household incomes.

The study of freestanding EDs was led by Cedric Dark, MD, MPH, an assistant professor of emergency medicine at the Baylor College of Medicine in Houston, and published in the October issue of Health Affairs. It collected data on the state’s 418 hospital-based EDs, 204 independent, freestanding EDs and 62 satellite emergency centers and used census data on Public Use Microdata Areas (PUMAs) instead of larger hospital service areas, with the authors hypothesizing freestanding EDs would be in PUMAs with favorable economic conditions.

The results matched the hypothesis. In the 129 PUMAs with freestanding EDs, the average household income was $91,563. In the 83 PUMAs without one of these facilities, average income was nearly $25,000 lower.

Payer mix in those areas was also noticeably different. Areas with freestanding EDs had higher percentages of residents with private insurance (69.5 percent vs. 56.7 percent in PUMAs with no freestanding EDs) and a lower percentage of beneficiaries of Medicaid (13.9 percent vs. 20.7 percent) and Medicare (16.7 percent vs. 17.5 percent)—an unsurprising finding, since independent freestanding EDs don’t receive Medicaid or Medicare reimbursement. Those areas also had a smaller share of Hispanic residents (30.3 percent) than areas without freestanding EDs (44.5 percent) or the state as a whole (35.8 percent).

“The business decisions involved in determining where to place such an ED appear similar to decisions of retail clinics and urgent care centers: All of these facilities are concentrated in urban areas with high incomes and insured patients,” Dark and his coauthors wrote. “These decisions warrant further scrutiny by policy makers to prevent the exacerbation of disparities involving the medically underserved.”

One argument in favor of freestanding EDs has been an assumption that those facilities would lower patient volume and wait times at nearby hospital-based EDs. Dark and his coauthors found no association between wait times at hospital-based EDs and the presence of freestanding EDs, though wait times did significantly decline between 2012 and 2015.

“In fact, freestanding ED entry appears to have occurred in markets where hospital-based ED waiting times were already shorter at the outset than they were in markets where freestanding EDs chose not to enter,” the authors wrote.

These findings may inform future regulation of freestanding EDs. Right now, Texas only requires a license for these facilities to operate. They’re also not required to function under a hospital’s license or go through a Certificate of Need program, which doesn’t exist in Texas, which has led to the state being home to half of all the freestanding EDs in the U.S. Other states hold them to stricter standards or, as in California, ban them altogether.

For owners and operators of hospital-based EDs, the study may give them pause, Dark and his coauthors said, as the presence of freestanding EDs appeared to have siphoned off privately insured patients from hospitals. This payer mix shift may change if freestanding EDs are recognized by CMS, a shift which may also allow greater insight into the quality and value of care at those facilities.