New report details recent growth in freestanding emergency departments

Emergency departments — both freestanding and hospital-based — treat non-emergent conditions for millions of patients each year at substantially higher prices than physician offices or urgent care centers.1 A new report from UnitedHealth Group, "Freestanding Emergency Departments: Treating Common Conditions at Emergency Prices," highlights the recent growth in freestanding emergency departments (FSEDs), which are physically separate from hospitals, and the resulting costly out-of-pocket bills and health care premiums for FSED consumers. Based in part on UnitedHealthcare’s experience in Texas, which is home to half the nation’s FSEDs, the report’s key findings include:

  • FSEDs largely treat non-emergent conditions: 2.3 percent of FSED visits are emergent or immediate and require services unique to an emergency department.2
  • In Texas, the average cost of treating common conditions at an FSED ($3,217) is 22 times more than at a physician office ($146) and 19 times more than at an urgent care center ($167).3
  • Shifting the site of care for common conditions in Texas from FSEDs to physician offices and urgent care centers would reduce costs by 95 percent, resulting in a savings of over $3,000 per visit.4
    • Annual FSED visits in Texas total 1.4 million, 20 percent of which are for the set of 10 non-emergent conditions. Shifting these visits to physician office and urgent care centers would reduce annual health care spending by over $800 million.
    • Shifting 1 million visits each year – to physician offices and urgent care centers would reduce annual health care spending in Texas by an estimated $3.1 billion.
  • FSEDs disproportionally serve relatively affluent communities that have access to other providers and higher utilization and spending.5

This analysis draws heavily on the experience of Texas’ highly developed FSED market and highlights the potential implications of FSED expansion in other states.

  • While the initial FSED growth is in Texas, additional states are seeing FSED growth as well, led by Colorado with both independent FSEDs as well as hospital-owned FSEDs.
  • Hospital owned FSEDs have the same characteristics as an independent FSED (separate from a facility, in affluent population areas, in convenient/commercial centers), but are owned by a hospital and bill as a hospital.
  • Consumers will often assume a hospital-owned FSED is an Urgent Care and will be surprised by the bill.
  • In addition to Colorado, Arizona, Florida, North Carolina, and Ohio have some of the highest number of hospital-owned FSED centers, although growth continues in other states.

To learn more about UnitedHealth Group’s Center for Reform and Modernization efforts regarding health care affordability and other key issues, visit unitedhealthgroup.com.

Also in this issue, read about how UnitedHealthcare is helping build an improved set of options for On-Demand and Emergency Care Management to address rising emergency department costs, as well as help ensure an optimal consumer experience and decision process.

Please contact your UnitedHealthcare representative with any questions.

 

1 UnitedHealthcare analysis of commercial claims in Texas, January through June 2016. Vivian Ho, Leanne Metcalfe, Cedric Dark, Lan Vu, Ellerle Weber, George Shelton, and Howard Underwood, “Comparing Utilization and Costs of Care in Freestanding Emergency Departments, Hospital Emergency Departments, and Urgent Care Centers,” Annals of Emergency Medicine, February 2017. http://www.annemergmed.com/article/S0196-0644(16)31522-0/pdf.
2 Gutierrez et al, October 2016. Jeremiah Schuur, Christina Loporcaro, Olesya Baker, Corine Sinnette, Andrea Fantegrossi, Michael Wilson, and David Cutler, “Facilities and Operational Characteristics of U.S. Freestanding EDs: Results of a National Survey,” SAEM Annual Meeting Abstracts, Academic Emergency Medicine, May 2016, 23: S7–S276. http:// onlinelibrary.wiley.com/doi/10.1111/acem.12974/epdf.
3 UnitedHealthcare analysis, 2016.
4 UnitedHealthcare analysis, 2016.
5 Gutierrez et al, October 2016. Jeremiah Schuur, Olesya Baker, Jaclyn Freshman, Michael Wilson, and David Cutler, “Where Do Freestanding Emergency Departments Choose to Locate? A National Inventory and Geographic Analysis in Three States,” Annals of Emergency Medicine, April 2016, 69(4):383- 392. https://www.ncbi.nlm.nih.gov/pubmed/27421814