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Physicians are Buying Up Stand-Alone ERs in Houston

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An interesting phenomenon is occurring across the country as emergency-room physicians have found another means by which they can effectively provide care and earn a living: the stand-alone ER.

Phil Galewitz of Kaiser Health News reports that the number of stand-alone ERs “has doubled to more than 400 in the past four years, according to data from the American Hospital Association and state health agencies,” and the impressive rapidity of this growth is being driven by various hospital chains, such as HCE (who is looking to open its seven stand-alone in Florida) and WakeMed Health and Hospitals (looking to open its fourth).

Galewitz writes, “Nowhere is the trend hotter than in the Houston metropolitan area, with 41 freestanding ERs and 10 more under development. Counting the freestanding ERs and traditional hospital-based ERs, greater Houston has 150 emergency rooms — twice the number as greater Miami — even though its population is only slightly bigger, according to a Kaiser Health News analysis.”

Hospital consultant Howard Gershon said, “It’s the wild, wild West and these things are growing like wildfire.”

The interesting factor here is that the primary owners of these Houston stand-alones are ER physicians, “who see them as more profitable than urgent-care centers…[b]ecause the freestanding emergency rooms can charge higher rates, even though they typically don't treat heart attacks or trauma or receive patients by ambulance.”

So, the earning potential for ER physicians is strong, and obviously, the main attraction for their consumers is the convenience.

But earnings and convenience at what cost?

A high cost, say insurers, who end up paying two to three times more per patient for a routine visit “that could be provided in less costly settings.” In fact, freestanding ERs may be aggravating the very problem healthcare reform has sought to diminish in demanding fewer visits to standard ERs.

With stand-alone ERs, Galewitz points out, “insured patients have little incentive to drive past more expensive, freestanding ERs because their co-payment is only $50 or $100, modestly more than what it might cost for a visit to an urgent-care center or doctor's office. Their insurers pay the balance.”

Insurers, for their part, can’t stop the patient from going to one, given Texas state law, nor can they battle the facility fee that is tacked on to the physician’s fee.

If you think insurers are upset over this, you can imagine how uninsured patients feel when they get their bills from the stand-alones, especially since quite a few freestanding ERs look just like urgent-care centers, leading to a bit of confusion among consumers.

All of this has led to various efforts to protect consumers and educate them on the pros and cons of freestanding ERs.

But the point remains: ER physicians in Houston have found what appears to be a more profitable and more convenient means of treating emergency-room patients than in the traditional hospital setting.

As physicians looking for jobs, would you consider investing in a stand-alone ER or becoming a part of one? What would be your terms for purchasing or joining one?

As a healthcare professional, do you find these stand-alones to be a positive innovation or a negative one in the provision of care?

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