Free-Standing Emergency Rooms Causing Controversy

COLORADO SPRINGS – Here at a tidy suburban shopping strip, in the parking lot near a tanning salon, a Starbucks and a cupcake shop, is a fierce new battleground for precious health care dollars.

First Choice is a gleaming, stand-alone emergency room built like a drive-through dry cleaners, set in an affluent neighborhood to signal convenience to consumers – and to rake in profits for private investors.

There’s no towering hospital attached at the back, no helicopter pad, delivery rooms or surgery suites. But a doctor is always here, they handle hangnails to heart attacks, and regulators allow First Choice to charge high ER prices no matter how trivial the ailment.

“The hospital ER system right now is overburdened,” said Andrew Jordan, chief marketing officer for First Choice.

“We’re the ultimate fix-it shop,” senior vice president Heather Weimer said. “We want to fix you and send you up or down to the next level.”

But critics say free-standing ERs are creating and distorting demand, not just filling it.

“What they’re doing is driving up the cost of medical care,” said Dr. Vince Markovchick, an emeritus professor of emergency medicine and author of the manual “Emergency Medicine Secrets.” Free-standing ERs can charge four or five times what an urgent-care center or clinic charges for common problems such as stitches, abdominal pain or sprains.

For-profit ERs are siphoning patients with insurance from urban hospitals that need the money to subsidize charity care, Markovchick and others said.

“They play the numbers of being in the right ZIP code,” said Dr. Richard Zane, emergency department chair at University of Colorado Hospital.

Zane said he expects First Choice to build up to five more ERs in Colorado, and other for-profit competitors will likely follow – none of them good for the system, he added.

This First Choice ER on Powers Boulevard is the inaugural outpost for a company that has blanketed Texas with the controversial concept and now has sights on Colorado. With 16 other ERs around Houston and Dallas, First Choice is also renovating a site in Arvada to open early next year.

Nonprofit hospital systems also have entered the “freestanding” game, with Banner Health and University of Colorado Health building stand-alone ERs near each other’s territory in Greeley.

Insurance companies – which spend time these days trying to keep people out of expensive ERs if they don’t belong there – and other critics don’t like the trend. When beds and exam rooms expand, customers tend to fill them whether they belong there or not.

“There’s some truth to it that if you build it, they will come,” said Dr. Elizabeth Kraft, chief medical officer for Anthem’s Blue Cross insurance in Colorado. “There’s a learning curve on the patient’s part, and they may get a bigger financial hit than they were expecting.”

Insurers encourage ailing consumers to think twice by boosting penalties for using the ER. Federal rules guarantee insurers will pay for medically necessary ER visits, but they have some freedom to share costs with the patient.

Anthem, for example, has co-pays of $150 to $300 for ER visits, versus $10 to $75 for the same treatment at an “urgent care” or other primary doctor’s office.

Frustrating the health experts is what simple, nonemergency ailments ERs commonly attract: “allergic rhinitis,” in other words a runny nose from pollen; headaches; and physicals for summer camps.

“At least half of the patients seen in most busy ERs could be safely taken care of in a lower- cost, urgent-care setting,” Markovchick said.

First Choice executives say they have no more interest in keeping a patient who doesn’t belong there than a hospital-based ER. They say First Choice refers non-emergency patients back to their family doctor, if they have one, and frequently writes off charity care.

Under state law, and because it’s the right thing to do, First Choice doctors say, every patient is given a medical screening by a physician before any questions are asked about how they are paying.

On a recent weekday in Colorado Springs, Olga Thein was brought in with chest pains and a history of heart illness. Dr. Ron Price spent 45 minutes with her, took labs that were done in minutes and determined she was not having a heart attack and offered a prescription. Price said he was calling her cardiologist to report the incident and the tests.

The nurse on duty, Erica Miller, said she has worked at all the Colorado Springs ERs, and is doing far more patient care and less bureaucracy at First Choice than at the other locations.

“I’m feeling like a nurse instead of a computer technician,” she said.

State law requires all licensed ERs to have a transfer agreement with a full hospital, and First Choice contracts with both Memorial and Penrose-St. Francis in Colorado Springs. Ambulances do not come to First Choice – all traffic is self-directed; a contracted ambulance is parked outside the front door for emergency transfers to hospitals.

None of the ERs are official trauma centers, as only hospital ERs can receive that designation, a First Choice spokeswoman said.

First Choice cannot bill Medicare or Medicaid because federal rules require an ER to be part of a full hospital system to get paid. That leads to the criticism from Markovchick and others that the for-profit ERs are only after high-paying private insurance.

“The way you make a profit is you avoid anybody who can’t pay,” Markovchick said.

First Choice employees reject that assumption, saying they always give the care needed to the patients who arrive. Thein, for example, was a Medicare and Medicaid patient, and when she walked out the door on the arm of a friend, her bill was written off.

Researchers on costs in health care tend to hedge when addressing whether for-profit ERs are exploiting gaps or listening to consumer demand.

“Free-standing emergency departments, like a lot of other players in the health care marketplace, tend to go where the well-insured patients are, not necessarily where the need is,” said Emily Carrier with the Center for Studying Health System Change in Washington, D.C. “But that’s not the same thing as saying that the need isn’t there.”

Consumers are responding to something they want from the inviting new ERs, other analysts note. Other pieces of the health care system might do well to figure out what that is and try to deliver the same service in a less-costly way.

Patients who don’t have a regular doctor or who like knowing a clean, well-lighted place will take them in at 9 p.m. Friday, for example. Primary-care doctors can provide some of that with night and weekend office hours, access to e-mail or texted advice, and other techniques, Anthem’s Kraft said.

“Meeting patients where they’re at, which is kind of a new concept,” Kraft said.

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