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Adam Nisenson Answers: What Do Freestanding Emergency Rooms Have to Do with You?

Houston Business Journal
April 11, 2008

Health Care Survey

Q: How is the boom of freestanding emergency clinics in Houston affecting traditional hospitals, patients and the industry in general?

Adam Nisenson, Co-founder, Active Imagination, a marketing firm specializing in health care and sports branding

A: While hospitals are in fact, alive and well, the doctor is also "in" at a growing number of freestanding emergency care centers springing up in affluent, suburban areas across the United States.

As baby boomers age and the population swells, demand for urgent care continues to soar, causing more overcrowding (and longer waits) at traditional hospital emergency rooms. One solution is the freestanding center.

Traditional hospital ERs have documented wait times of three to six hours for treatment, and extended waits for testing or for hospital admittance. And as the number of uninsured Americans continues to climb, many patients substitute the hospital emergency room (where all patients are treated regardless of their ability to pay) for the office of a primary care physician.

The resulting bottlenecks are as frustrating to physicians are they are to patients.

Unlike traditional hospital ERs, freestanding emergency centers can choose their patients, accepting only the insured, or those who are able to self-pay at the time of service. This demographic is accustomed to high-quality, high-convenience service, and unlikely to return if their expectations are not met. "Open 24 hours" is simply not enough to compete in this high-end market.

Establishing and maintaining strong physician relationships is a key factor in the success of any freestanding emergency center. Physicians with established reputations for clinical excellence should be identified as potential partners; their roots in the community will provide a solid base for ongoing referrals.

Strategic relationships with nearby health care systems are also critical when ER patients need to be admitted to the hospital. Affiliations with larger health care systems also enhance a freestanding center's ability to recruit quality physicians.

Steve Sanders, CEO, Memorial Hermann The Woodlands Hospital

A: The proliferation of freestanding urgent care, minor care and emergency care centers in the Houston market evolved as a response to the overcrowding in hospital emergency rooms. Physicians and entrepreneurs saw this as an opportunity to create a niche market.

From a hospital's perspective, it's a double-edged sword. It helps and hurts us at the same time. These new freestanding clinics typically attract insured and paying patients. They can choose who they want to treat and what types of cases. If people can't pay, then they don't take care of them. We are obligated to treat everyone who walks through our doors whether they can pay or not. The hospitals end up losing patients who can pay and absorbing the losses of those who can't pay.

For patients, it can certainly be a benefit. The freestanding clinics offer more access to care and shortened turnaround and wait times. Costs also may be reduced because these clinics have less overhead than hospital emergency rooms operating on a 24-hour basis and caring for higher acuity of patients.

What is concerning to us as an industry is that we are seeing the demand for emergency-trained personnel, such as physicians and nurses, outpace the supply. It's beginning to put a strain on emergency facilities and is stretching those valuable resources very thin.
Dr. Toby Hamilton, Co-owner, 24 Hour Emergency Room

A: As the population grows, hospital emergency rooms are seeing a drastic increase in the number of patients. This increase is putting an enormous strain on the traditional hospital system. Operating at peak capacity, ER wait times have severely increased and often, not enough beds are available to accommodate the community need. To alleviate the strain on the system and improve patient care, there has been a rise in the number of freestanding emergency rooms opening nationwide.

A concept that has existed for more than 20 years, a freestanding emergency room is basically a full-fledged ER, taken out of the hospital and placed in the community as an extension of its care and services.

The new freestanding ER trend offers the best of both worlds -- a higher level of emergency care closer to home and the depth of resources of an acute care hospital for medical emergencies.

Freestanding ERs follow the same procedures as other conventional hospital ERs, which is to treat and release patients or stabilize and transfer patients into an inpatient environment. Working in conjunction with local hospitals, transfer agreements are usually put in place to ensure a smooth and quick transfer to the patient's hospital of their choice.

Patients come into freestanding centers because they are convenient and they get rapid treatment in an area close to their homes.

Hospitals are also reaping benefits from the growing freestanding ER trend. More ER facilities means more beds in the community and takes pressure off the overcrowded conventional ERs. It also means patients can be stabilized faster and gain quicker access to a hospital's specialized inpatient treatment, when necessary.


Randall Zarin, Senior manager, UHY Advisors TX LLC, health care group

A: Freestanding emergency clinics are physically distinct from an inpatient hospital and offer the same services as traditional emergency rooms with the exception of trauma services.

Traditional ERs are overcrowded, leaving patients to wait hours for treatment, and are consistently on ambulance diversion. The Centers for Disease Control estimates that ER visits have increased 20 percent in the last decade due to high numbers of uninsured and underinsured, busy primary care physicians with limited office hours, and less restrictive managed care policies.

Additionally, a shortage of on-call specialists, a managed care-driven need to limit inpatient stays, and high census rates at hospitals with few available beds for ER transfers, exacerbates the overcrowding.

Texas seems to lead the nation in developing the freestanding model -- ranging from hospitals locating a clinic within a few miles of the hospital to lessen wait times, to physicians partnering to create a system of emergency care that could be profitable and eliminate red tape.

Some hospitals are forming freestanding clinics or a "fast track" in their ERs, and Centers for Medicare & Medicaid Services reimburse emergency care as an outpatient, making it possible for the hospital to see reimbursement from both types of emergency facilities when a patient is transferred to the main hospital.

Freestanding emergency clinics allow the patient to be seen faster with a high quality of care and a true level of efficiency, given the outpatient nature of the clinic.


Lynn LeBouef, CEO, Tomball Regional Hospital

A: We have seen a small decline in visits to our emergency room. We believe that the decline is attributable to the growth in the freestanding emergency clinics.

The freestanding emergency clinics are helpful to patients who do not require extensive care. In fact, the emergency clinics can provide relief to hospital emergency rooms that are often busy with complex emergency patients.

However, the boom of freestanding emergency clinics does concern me since the scope of services that is provided varies widely. Some are advertising as full-service "emergency rooms" capable of taking care of all types of emergency situations, including chest pain, heart attack and stroke. Evidence -based medicine tells us that there are narrow time windows to address these types of conditions for the best outcome for the patients.

Although these clinics may be able to diagnose these problems, they cannot always perform the necessary interventional procedures or surgical interventions that a hospital can. This can result in delay of care when these types of patients go to one of these clinics and have to be transferred to a hospital for interventional care.

Hospital emergency rooms are required by law to see all patients that present themselves to the emergency room, regardless of their ability to pay. I am not sure that same standard is being observed at these freestanding emergency clinics, driving more uninsured and underinsured patients to a hospital emergency room.

The community "hospital-based" emergency care center that Tomball Regional Medical Center has joint ventured on with Memorial Hermann The Woodlands Hospital at least has the backup of two full-service hospitals that can quickly get a patient transferred into their systems and the appropriate interventions performed in a much more efficient manner than can a freestanding clinic that has to find a physician and a hospital that can provide that interventional care and then transfer that patient to a hospital.

While the emergency clinics serve a purpose, it would seem that signage for emergency clinics should clearly indicate that it is not a hospital emergency room but rather a minor emergency clinic.