The freestanding ED could disrupt health care. Here's why that could be a good thing.

FSEDs have both advocates and detractors

Editor's note: This story was updated on August 18, 2017.

Health care leaders and policymakers should consider four potential ways that freestanding EDs (FSEDs) could "disrupt health care delivery in a way that better serves patients," three emergency medicine doctors write in NEJM Catalyst.

Freestanding EDs: How to assess your market's readiness

FSEDs first began in the 1970s as a way to serve rural areas without hospitals, note Jennifer Wiler and Richard Zane—vice chair and chair, respectively, of the University of Colorado School of Medicine's Department of Emergency Medicine—and Nir Harish, a clinical instructor in Yale School of Medicine's Department of Emergency Medicine.

The facilities have since taken hold in suburban areas as well due to technological innovations, increased demand for around-the-clock access to care, and the potential to generate revenue. Across the United States:

  • 323 hospitals operate about 390 FSEDs—about a 75% increase since 2008—with the majority located in Arizona, Colorado, and Texas, which do not require FSEDs to acquire a certificate of need.
  • 17 for-profit entities independently operate about 170 FSEDs, which are not allowed to participate in federal health programs. Many of the for-profits companies also build hospitals or are affiliated with hospital systems.

FSED backers tout their shorter wait times, high patient-satisfaction scores, and levels of quality of care that studies suggest is comparable to hospital EDs. However, their detractors say many patients may be better served by lower-cost primary care or urgent care center and that FSEDs can be costly for patients who have to pay out-of-pocket.

"Arguments on both sides have merit," the NEJM Catalyst authors write. But given the demand for FSEDs, "policymakers and other health care leaders should consider the overall value that FSEDs could bring," they argue.

Wiler, Zane, and Harish lay out "four possible sources of value from FSEDs that, if cultivated responsibly, would disrupt health care delivery in a way that better serves patients."

1. Serve as a testing grounds for new payment and pricing models

Since FSEDs tend to have lower overhead costs than hospital EDs, the authors argue that they are primed to be testing grounds for new payment and pricing models that could promote high-quality care, reduce cost, and grow FSEDs' market share.

For instance, they note, Minnesota-based AllinaHealth's WestHealth—a combined ED and urgent care freestanding facility—prices emergency and minor conditions separately, so patients with conditions such as sore throats don't get charged facility fees.

2. Direct patients to the best hospital for them

More than 95% of FSED patients do not require hospital admission, but for those that do, "FSEDs can get them to the right hospital for their needs, rather than whichever one is closest to home," the authors argue.

The authors suggest that FSEDs could operate similarly to how Kaiser Permanente uses Clinical Decision Units in its mid-Atlantic region. Kaiser encourages patients to go to the decisions units first, where they are evaluated and, if needed, transferred to a hospital with expertise in their area of need, such as cancer or stroke care.

3. Reduce hospital admissions

For patients who do not require hospitals' full range of services, FSEDs could serve as an alternative that helps keep costs down and serve patients closer to home, the authors say.

For instance, University of Colorado Health and for-profit FSED operator Adeptus Health have joint integrated FSEDs and will soon establish "micro-hospitals," which will provide observation, emergency care, short-stay admissions, and telehealth services to connect with University of Colorado Health specialty physicians.

4. Be the 'porch' to the medical home

While EDs are often viewed as "the hospital's front door," the authors note, FSEDs could operate as the "'porch' to the medical home"—providing hospital-like services in home-based or outpatient settings.

The authors cite the example of Massachusetts-based ReadyMed Plus, a facility similar to a FSED that has partnered with local specialists and a local oncology center to administer intravenous medication infusions, which otherwise would be provided by hospital-based infusion centers.

"Let's not close the door on an innovative, potentially disruptive model like freestanding EDs," the authors write. "Instead, let's recognize what they do well—timely, high-quality care, close to home—and figure out how they can complement, rather than compete with, the overall care-delivery system" (Harish et al, NEJM Catalyst, 2/18).

Get the decision tools you need when considering a Freestanding ED investment

Increasing consumerism in health care, heightening demand for emergency services, and shrinking supply of emergency rooms are contributing to the proliferation of freestanding emergency departments (FSEDs).

Download our white paper to get the decision tools you need when considering an FSED investment.

Get the Briefing


Next in the Daily Briefing

When an employee asks for a raise, what should you do?

Read now