Freestanding ERs cost significantly more than urgent care
Care delivered at freestanding emergency departments in Texas can cost 10 times as much as the same care delivered at an urgent care center, providing unwary consumers with a hard lesson in retail healthcare when they’re handed the bill, research suggests.
The rapid growth of freestanding EDs in Texas has led to sizeable increases in out-of-pocket expenses for consumers, according to research published in the Annals of Emergency Medicine.
“These findings are significant for both patients who find themselves in need of immediate care, as well as for the overall healthcare system,” said research co-author Vivian Ho, PhD, chair in health economics at Rice University’s Baker Institute for Public Policy and director of the institute’s Center for Health and Biosciences.
Ho said patients don’t realize the price difference for these two types of facilities until they learn their out-of-pocket expenses. The total price of a freestanding ED visit averaged $2,199 in 2015 versus $168 for an urgent care clinic visit.
In each case, patients were expected to pay one third out of pocket. The average price for similar treatment at hospital-based emergency departments, where patients would have paid 33% out of pocket was $2,259.
“Many patients mistakenly think that freestanding emergency departments and urgent care clinics are similar, because they are often conveniently located in neighborhood shopping centers with modest storefronts,” Ho said.
“The sticker shock is alarming. Insurers are being forced to pay higher prices for many healthcare services at freestanding emergency departments that could have been dealt with at much lower cost. These unnecessary medical costs then get passed onto all insurance consumers in terms of higher premiums.”
Freestanding EDs Defend Findings
Gillian Schmitz, MD, a San Antonio, TX-based emergency physician who works in both freestanding and hospital-based EDs, said the study’s findings validate many claims made by freestanding ED advocates.
“In some senses, this study is very positive for freestandings. We have been continuously told we are more expensive than hospitals and this finally proves what we have been saying for a long time,” she said.
“We are actually comparable and even cheaper than hospitals and we’ve known that for a long time. Freestanding not only offers access to patients but we can do it at a cheaper cost.”
Schmitz, a board member of the American College of Emergency Physicians, called “ridiculous” the report’s comparison of the services provided at freestanding EDs and urgent care clinics, and the suggestion that patients don’t understand the cost difference between the two care venues.
“They are completely different animals and you can’t compare apples to oranges,” she said.
“All of our freestanding emergency rooms have giant red letters that say ‘Emergency Room.’ When you walk in everyone says ‘Welcome to our Emergency Room. What is your emergency today?’ The patients have to sign a form that says they understand they are in an emergency room and that we charge under ER rates, and we probably spend as much time evaluating the patients as we do explaining their explanation of benefits.”
Freestanding ED Use on the Rise
The study examined more than 16 million insurance claims processed by BlueCross BlueShield of Texas from 2012 to 2015 to track the growth in use and prices for freestanding emergency departments relative to hospital-based emergency departments and urgent care centers in Texas.
Researchers found that freestanding ED use rose 236% between 2012 and 2015, compared with growth rates of 10% for hospital-based emergency departments and 24% for urgent care clinics. A separate Harvard University study in 2016 identified 360 freestanding EDs operating in 30 states, and more than half of them (181) are located in Texas.
Fifteen of the 20 most common diagnoses at freestanding EDs were also in the top 20 for urgent care clinics. However, prices for patients with the same diagnosis were on average almost 10 times higher at freestanding emergency departments.
The most common diagnostic category treated at freestanding EDs is “other upper-respiratory infections,” which has an average price of $1,351, more than eight times the price of $165 that was paid at urgent care clinics.
Thirteen of the most common procedure codes associated with freestanding EDs were also among the 20 most common for urgent care clinics. In cases in which the type of procedure overlapped, the total price per visit was 13 times higher in freestanding EDs. For example, the price for a therapeutic or intravenous injection at a freestanding ED was $203, which was 12 times the $17 price at an urgent care clinic.
Schmitz said the same criticism could be leveled at hospital-based EDs.
“If you reframe the argument, yes 15 of the top 20 diagnoses of freestanding were in the top 20 of urgent care, but that was pretty much the same for hospital-based EDs,” she said.
“I work in a hospital ED and all the time I see people come in with urinary tract infections and other things that could be treated in urgent care. Part of it is a matter of education, but the bigger problem is access. Many patients can’t get in to see their primary care doctor.”
The study said regulatory solutions to address inappropriate use of freestanding EDs could include limiting the amount for which they can balance bill patients for out-of-network care, and requiring that the EDs display the logos of insurance companies with negotiated in-network rates.
The study was funded with a grant from the Texas Medical Center Health Policy Institute, with researchers from Rice, Baylor College of Medicine, the University of Texas Health Science Center at Houston, the Michael E. DeBakey VA Medical Center and BCBSTX.