Driving in and around the cities that make up the Dallas–Fort Worth (DFW) metroplex, I get the sense that something is in process that could have dire consequences for our specialty. Freestanding “emergency rooms,” both hospital- and physician/investor-owned, are multiplying at an alarming rate, and this is happening all over the state. Texas is, of course, the first state to legitimize and regulate physician/investor-owned freestanding emergency facilities, and there is a good chance this phenomenon will spread nationally. Certainly, the number of hospital-owned freestandings is increasing in other states, but thus far, physician/investor development has dominated the market only in Texas. Is the proliferation of physician/investor-owned freestanding emergency facilities good or bad for emergency medicine?
There is a certain irony in my sense of alarm about this because I was, at one time, considered a pioneer in the development of freestanding “minor emergency centers” in DFW in the late 1970s and throughout the 1980s. Though I sold these facilities long ago, those same 17 practices, now referred to as “convenience care clinics,” are still in business and have since been joined by dozens of others, mostly physician/investor owned. While operating these clinics, I simultaneously staffed several hospital-based emergency departments in the same catchment areas and was able to conclusively prove that the presence of convenience clinics has no impact on either ED volume or payer mix—but I suspect not so for these freestanding emergency rooms. These facilities take paying emergency patients out of the hospital-based ED, and this logically has to have a negative impact on volume and payer mix. This, in turn, has to make it harder for both the hospital-based facility and its emergency physician staff to meet their unfunded EMTALA mandate. In addition, these aren’t the only potential negative impacts on the EMTALA-bound hospital-based ED safety net.
Physician/investor-owned freestanding emergency facilities typically involve an investment of $1.5 million to $3 million. The facilities’ ability to charge and collect a hospital-level facility fee as well as use the 992_ _ CPT emergency department professional service codes enables them to break even at about a dozen patients per day. They are required to see all comers, but they are disproportionately located in areas of the metroplex unlikely to have significant numbers of underinsured or uninsured people. To use the word “emergency” in their name, these facilities must operate 24-7 to comply with Texas law. Twelve patients a day is one every two hours. Given the sheer number of these facilities being built, I suspect that many of them may not reach or far exceed this number of visits. From a health care system perspective, this seems an extremely inefficient use of capital, expensive and rapidly obsolescent equipment, and emergency physician manpower. In addition, these facilities can’t but worsen the already near-critical emergency physician shortage.
What alarms me is that, at a time when the health care system is crying out for less duplication of services and greater efficiency in the use of expensive resources, the boom in physician/investor-owned freestandings appears to be moving the needle the other way.
There is a kind of “tragedy of the commons” at work here, where everyone is acting logically and according to their own self-interest but the end result is likely to be detrimental to all. Hospitals do only that which is in their strategic interest, but physicians/investors are free to plunk one of these down at every major intersection in the nicer parts of town. What alarms me is that, at a time when the health care system is crying out for less duplication of services and greater efficiency in the use of expensive resources, the boom in physician/investor-owned freestandings appears to be moving the needle the other way. So it would be helpful to know what factors are driving this phenomenon.