FSEDs. What's the future?

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.

bikERdoc

Full Member
7+ Year Member
Joined
Sep 21, 2015
Messages
76
Reaction score
95
I'm currently working my first gig out of residency in a city/state that has FSEDs popping up like McDonalds on every corner. I don't particularly feel like I have the best grasp on where the idea originated from, and more importantly, where it is headed. Since I don't really have other sources to refer to, I figured I would pose the questions here to find out some more info. So here goes:

1. What's the point? I get it, money. Aside from that, what's the point of putting up half assed EDs everywhere, that in reality serve as slightly enhanced urgent care centers with advanced imaging? When these things are literally popping up EVERYWHERE, at what point do we hit saturation and lose money on it? Seems like everyone wants to throw one up in someone else's territory to say FU. At what point do we put so many of these things up that we hit mutually assured destruction and they all fail?

2. Where can I go to find out my state's legislation on how these things came about? Have there been any landmark laws passed so far that have limited the reach of these structures? Can we expect certain trends around the country, good or bad?

3. Who's getting rich off these? It's a new thing, seems to be going on everywhere, seems like somebody is making the dough. Any real numbers? How are these regulated by EMTALA? How are they NOT regulated by EMTALA?

4. Is there any indication that the FSEDs are all gonna disappear in 5-10 years, and as a result, all groups will experience significant downsizing? Vice versa, can we expect that groups who are investing into this model will have a significant advantage in 10 years from now? What are people basing these predictions off of? Please, tell me what the Magic 8 Ball says.

From a business standpoint, seems like you can only cut the pie so many times, before there are only crumbs left. The current expansion of FSEDs certainly is creating a lot of job opportunities in previously difficult markets. I worry about the volatility of what's going on these days.

Thoughts and discussion appreciated.

Members don't see this ad.
 
1. It's mostly about money, but also autonomy when the FSED is owned by the physicians who work there. You get to choose your own charges, your own staffing levels (and staff), get rid of pesky administrators etc. But when the hospitals own them, yes, it's about money. Around here, the hospitals often build them and then build a hospital around them, but the last two they didn't. It's a chance to get urgent care patients and charge them ED rates in many instances.

2. Not sure.

3. Docs and hospitals.

4. Only with legislation.

I think it's a bad trend for patients personally. My area already had too many EDs without the free standing ones. While surge capacity is nice, there are no waiting times in my city at any ED. It's a supply trying to create its own demand. I think patients with true emergencies are generally served better by an ED associated with a hospital and a fully-staffed call schedule. But for doctors...hard to argue this is a bad thing. Gets rid of being at the mercy of the contract with the hospital, which is the worst part of being in a small democratic group.
 
  • Like
Reactions: 1 user
I'm currently working my first gig out of residency in a city/state that has FSEDs popping up like McDonalds on every corner. I don't particularly feel like I have the best grasp on where the idea originated from, and more importantly, where it is headed. Since I don't really have other sources to refer to, I figured I would pose the questions here to find out some more info. So here goes:

1. What's the point? I get it, money. Aside from that, what's the point of putting up half assed EDs everywhere, that in reality serve as slightly enhanced urgent care centers with advanced imaging? When these things are literally popping up EVERYWHERE, at what point do we hit saturation and lose money on it? Seems like everyone wants to throw one up in someone else's territory to say FU. At what point do we put so many of these things up that we hit mutually assured destruction and they all fail?

2. Where can I go to find out my state's legislation on how these things came about? Have there been any landmark laws passed so far that have limited the reach of these structures? Can we expect certain trends around the country, good or bad?

3. Who's getting rich off these? It's a new thing, seems to be going on everywhere, seems like somebody is making the dough. Any real numbers? How are these regulated by EMTALA? How are they NOT regulated by EMTALA?

4. Is there any indication that the FSEDs are all gonna disappear in 5-10 years, and as a result, all groups will experience significant downsizing? Vice versa, can we expect that groups who are investing into this model will have a significant advantage in 10 years from now? What are people basing these predictions off of? Please, tell me what the Magic 8 Ball says.

From a business standpoint, seems like you can only cut the pie so many times, before there are only crumbs left. The current expansion of FSEDs certainly is creating a lot of job opportunities in previously difficult markets. I worry about the volatility of what's going on these days.

Thoughts and discussion appreciated.

Full disclosure: I am an owner of a operational FEC and a second under construction. I think FEC are an integral part of the future of Emergency Medical Care.

I would love for you to come visit our 'half assed ED'. We are the only 'ER' in town staffed only by ABEM physicians, our nursing staff average has almost 11 years of 'busy ER' experience, our lab can do anything (sans LP results) that is needed in an emergency situation.. and our longest test takes 15 minutes to get back. I would also show you our fully stocked pharmacy that I assure you has any and every drug you have ever ordered for a patient in the last year. You can then see our CT scan with injector that I can get a flawless CTA with... and get a read by a BC radiologist.. in about 20 minutes. Our fully digital Xray machine and perhaps our ultrasound is worth seeing. Take a gander at our C-Arm while your at it.. and the slit lamp. Maybe also the woods lamp, the tonopen, the cast saw, the king vision, eye burr...

If you drop a cookie on your tour, feel free to pick it off the ground and eat it. I assure you the facility is spotless.

Patients? Just a bunch of urgent care crap, right? I would have let you do the intubation last week.. or maybe you want to do the ultrasound guided IJ? Even better, titrate the levophed for us. Feel free to run the next sedation with Propofol or Ketamine.. Chefs choice today.

Of course, we order inappropriate tests all the time and do inappropriate procedures constantly because (cha ching, more money for me!). Maybe ask the belly pain that came over earlier referred by a PCP for a 'CT scan' who went home with reassurance instead... or the young man sent from an urgent care (hey why would they send us something since we don't really do much more) for possible meningitis needing an LP. Nice fat United Healthcare, what does an LP pay? Lets reassure him also, he just has the flu.. no needle in his back today. Funny thing is, in my hospital days, every patient comes in a nice package, with a 'rainbow' and 'labbed up' ready for me to see and evaluate their ankle sprain. And the x-rays were done, of the entire left extremity. A hospital ER would never order an inappropriate test though...

Talk to the hand.. if you do not have insurance, right? No money, get out of here! We should ask the homeless guy who had appendicitis on CT (Cha ching.. maybe he will give me his grocery basket in return for payment?). Or the guy that cut his arm while breaking someone else's window... I haven't thrown 60 sutures in quite a while.

We also want to disguise ourselves, we want everyone to believe we are an UC until.. surprise, the bill! We only have 'Emergency' written 6 times in very large letters on the exterior... And you only have to sign 3 documents that specifically say we are an ER.. Maybe they won't notice!

I could go on... There is much misinformation on FECs. What you do have right is that the industry is being absolutely ******ed on building on top of one another. We were the first in our mid sized Texas city, there are now 6 others under construction, half of them by larger groups and/or investors who have probably have never even been to our town. They are chasing dollars. We chased alternatives, control of our surrounding, and ultimately patient care we think is by far the best.

EMTALA.... Doesn't apply because the federal government does not recognize FECs. Every FEC would LOVE to be able to take Medicaid and Medicare and follow all EMTALA rules. Some people say "Yeah, they are bogus because they don't have EMTALA". What is the fine for a violation of EMTALA, 50K? The fine for violating the 'EMTALA-like' rule in Texas is lose of the FEC license.... I assure you that costs more than 50K.

We are about 20-30% cheaper than hospital charges. We should be 20-30% higher than hospital charges. We are more convienant, more efficient, cleaner, and offer a better environment.

What is the future? Unfortunately, its ownership by large corporate entities that try to front of being 'patient centric' in reality they are 'dollar centric'. The Emergency Physician once again becomes a cog in the wheel. Stupid small doctor groups like mine, who provide stellar care with appropriate staffing and equipment, probably will do poorly, or will be bought by such a company so that we don't quit lose everything. We wont sacrifice care for dollars, and in this game, dollars win, not STEMI times of 40 minutes, or ABEM staffing (hey we are expensive!).....

I don't know the future of FECs, but as an emergency physician with roles in various settings, our facility runs like a top and provides care that rivals and exceeds many hospitals out there.......
 
Last edited:
  • Like
Reactions: 1 users
Members don't see this ad :)
I'm currently working my first gig out of residency in a city/state that has FSEDs popping up like McDonalds on every corner. I don't particularly feel like I have the best grasp on where the idea originated from, and more importantly, where it is headed. Since I don't really have other sources to refer to, I figured I would pose the questions here to find out some more info. So here goes:

1. What's the point? I get it, money. Aside from that, what's the point of putting up half assed EDs everywhere, that in reality serve as slightly enhanced urgent care centers with advanced imaging? When these things are literally popping up EVERYWHERE, at what point do we hit saturation and lose money on it? Seems like everyone wants to throw one up in someone else's territory to say FU. At what point do we put so many of these things up that we hit mutually assured destruction and they all fail?

2. Where can I go to find out my state's legislation on how these things came about? Have there been any landmark laws passed so far that have limited the reach of these structures? Can we expect certain trends around the country, good or bad?

3. Who's getting rich off these? It's a new thing, seems to be going on everywhere, seems like somebody is making the dough. Any real numbers? How are these regulated by EMTALA? How are they NOT regulated by EMTALA?

4. Is there any indication that the FSEDs are all gonna disappear in 5-10 years, and as a result, all groups will experience significant downsizing? Vice versa, can we expect that groups who are investing into this model will have a significant advantage in 10 years from now? What are people basing these predictions off of? Please, tell me what the Magic 8 Ball says.

From a business standpoint, seems like you can only cut the pie so many times, before there are only crumbs left. The current expansion of FSEDs certainly is creating a lot of job opportunities in previously difficult markets. I worry about the volatility of what's going on these days.

Thoughts and discussion appreciated.

I think as EM physicians we should be all for the FSEDs. It is the only model (other than owning an Urgent Care Center), under which WE have the power rather than the CMG or the hospital.

-Have you ever been angry at being judged by metrics that are often nonsensical and largely affected by factors outside your control? At a FSED, the ER docs who own the place get to choose what metrics matter to them.

-Have you ever been pissed that a respiratory therapist is stuck covering some other part of the hospital or the rads tech just doesn't get it? Or having nursing priorities be in conflict with yours? In the FSED all the ancillary staff work for the ER docs that own the place. The chair is actually in charge of the WHOLE department rather than just the physicians.

-Have you ever been frustrated by working with an EMR that is just fine for the needs of the folks on the floor but is so bad for the ER? In the FSED the opinion of the ER is the only one that matters.

I am not saying there are no down sides or problems with FSEDs or that ER docs can't be bad bosses, but over all FSEDs should be as important to our specialty as independent surgical centers are to the surgeons.
 
  • Like
Reactions: 2 users
I am working on opening my 1st FSED in the Central Texas Area. Many docs I know are part owners and all have good experiences. I am 15 yrs into EM medicine and this is the prefect time to go into one IMO.

1. I get to make medical decisions without following protocols, CMS metrics, admin metrics, invalid pt complaints, etc.
2. I get to OWN something and work hard to benefit me rather than a CMG
3. I get paid for my work rather than having 50% no pay/medicaid
4. I can see 1/2 patients an hr and get paid more than seeing 2.5pt/hr
5. Gives me an outlet to slow down and work in a relaxing environment

I can list so much more. There are definitely risks, but life is full of risks but IMO the risk is worth it. It it works out, I can stop working 135hr/mo in my busy ED and work 60hrs/mo in a relaxing environment.

Anyhow, if anyone Boarded EM doc in Central Texas are interested in being part of a FSED, shoot me a PM. We have a few days left for buy in for this 100% ER physician own FSED.
 
  • Like
Reactions: 1 users
I don't claim to be an expert by any means, but my thoughts mostly boil down to this:

1) An ED created, organized and run completely by EM physicians is a very good and desirable thing.

2) I would be incredibly reluctant to invest a significant fraction of my resources in something that can evaporate in one legislative session. Especially in an area so dominated by high power lobbyists as health-care. (To clarify, I am talking about owning/investing one in a state where it is permitted such as Texas.)

So I think they are a great thing,... but personally I wouldn't touch it with a ten foot pole.
 
Last edited:
I take it all or most of the posters in this thread are in the same state - Texas?

The FSED's where I am (larger southeast city) are 100% hospital owned/staffed. The pay from the local groups is lower to work at them, and imho the negatives often outweigh the benefits. While transfers and admissions are easy, any 1 remotely ill patient consumes the staff resources and there is no other provider to see the random boluses that walk in the door.

Yes, you are able to do a lot of procedures and intubate, but there is zero backup.

Personally, I would rather work in a hospital setting where (in my state) you are paid significantly more, and may work harder, but with less risk.
 
  • Like
Reactions: 1 user
I worked in an FSED run by a hospital. Would never do it again, as the patient satisfaction/customer service aspect for a lot of BS complaints is even worse than in a regular hospital-based ED.

That being said, I'm all for Physician-owned FSEDs. It's about time that physicians started acting like businessmen, and took back their profession from the CEOs, nurses, and administrators. Our lack of business savvy over the last 50 years is a large contributor to our lack of control today.
 
  • Like
Reactions: 6 users
IMO, FSEDs is the one greatest change in EM medicine for the better. Let me tell you what FSEDs has not only benefited the owners, but ALL EM Docs throughout the country. Aside from the obvious money maker working in an easy environment,

1. Every FSED that opens up takes out 6 EM docs from the pool. This makes EVERYONE more valuable. Texas is the ultimate test case. I hope that FSEDs POPs up all over the country. There is a reason why rates in Texas is so much higher than most places. There has to be atleast 200 FSEDs in Texas, that has taken 1200 ED docs out of the work pool. That has raised the rates for everyone. There is a reason I command 500+/hr rates. If FSEDs disappeared, these 1200+ ED docs would flood the market and there would be an oversupply of EM docs fighting to work in West Texas for 200/hr from a CMG.

2. FSEDs allows EM docs to not be beholden to the hospitals. Almost every specialty can open up an office thus allowing them to have leverage against the hospital. No different than surgery centers providing surgeons leverage against hospitals. I see this all the time with surgeons giving hospitals the middle finger b/c they can work at a doc owned surgery center. Take this away, and the surgeons would have little options to operate.

Every ED doc should fight for and love the FSED down the road. It has provided us with alot of leverage, work options, $$$$, flexibility.
 
  • Like
Reactions: 2 users
FSEDs are great for the time being, but they will be choked out by legislation or, more likely and more importantly large hospital systems in the not too distant future.

Large hospital systems are plopping down very similar facilities in the uber-affluent areas of town all over the country. It's to try and snipe off the insured/well-paying patients and take care of them not just in the ED setting but to transfer them within their system and capture charges for the entire inpatient stay when something is found. It is going to be difficult for the mom-and-pop FSED in that same area, if you will, to compete with the large hospital system facility that can operate on margin with these facilities and have the leverage of negotiating equipment purchases at a fraction of cost due to volume.

Once again I am all for the ED-physician owned concept.. love that idea.. Like Veers said.. but, I don't think it will last because of the above. I'd rather short the stock of FSED facilities than buy into it. Of course regulators can always plop in and legislate something but I find the above to be more likely pathway of demise, plus these hospital systems will be EMTALA bound anyway decreasing the demand on legislating them out of existence.
 
Eh, outpatient surgery centers still exist. So do outpatient GI centers. They can't legislate FSEDs out of existence without a long, protracted battle showing a difference between what we do and what they do. They might conspire and take away the facility fee though.
 
They can't legislate FSEDs out of existence without a long, protracted battle showing a difference between what we do and what they do.

Actually yes they can. For the same reason that a state can (and has) passed legislation that you have to have a medical license to practice medicine, or you can't operate a hospital in your basement. An insurance company may not be able to discriminate, but the state certainly can through legislation. There is also a public policy difference between the two: Outpatient surgery is never an emergency procedure and patients have the opportunity to make an informed decision and therefore the state typically provides them more leeway. Emergency medicine on the other hand, is well, an emergency, (at least we still maintain that fiction) and since the state assumes that people have less freedom to make a true choice they typically impose much greater regulation.

So yes, a state can prohibit FSEDs, and the state/federal governments have traditionally felt a need to provide more regulation of emergency medicine than more "elective" medical services. Sort of the same reason that behavioral medicine units and to a lesser extent nursing homes are more regulated than botox clinics.

Now whether states will necessarily take that action is a different question. Again, I am not saying I agree, and I feel FSEDs are a good thing. However, the fact that they are prohibited in some states means that they can become prohibited in the states where they currently exist. It boils down to what the state (or congress) wants to do, and I personally wouldn't want to bet against the healthcare lobbyists. if they decide FSEDs are a threat.
 
Members don't see this ad :)
Eh, outpatient surgery centers still exist. So do outpatient GI centers. They can't legislate FSEDs out of existence without a long, protracted battle showing a difference between what we do and what they do. They might conspire and take away the facility fee though.
Which I'm sure you know would be the same thing as ending FSEDs. Without the facility fee they're low volume urgent cares with stupidly high overhead.
 
Actually yes they can. For the same reason that a state can (and has) passed legislation that you have to have a medical license to practice medicine, or you can't operate a hospital in your basement. An insurance company may not be able to discriminate, but the state certainly can through legislation. There is also a public policy difference between the two: Outpatient surgery is never an emergency procedure and patients have the opportunity to make an informed decision and therefore the state typically provides them more leeway. Emergency medicine on the other hand, is well, an emergency, (at least we still maintain that fiction) and since the state assumes that people have less freedom to make a true choice they typically impose much greater regulation.

So yes, a state can prohibit FSEDs, and the state/federal governments have traditionally felt a need to provide more regulation of emergency medicine than more "elective" medical services. Sort of the same reason that behavioral medicine units and to a lesser extent nursing homes are more regulated than botox clinics.

Now whether states will necessarily take that action is a different question. Again, I am not saying I agree, and I feel FSEDs are a good thing. However, the fact that they are prohibited in some states means that they can become prohibited in the states where they currently exist. It boils down to what the state (or congress) wants to do, and I personally wouldn't want to bet against the healthcare lobbyists. if they decide FSEDs are a threat.

You are exactly correct. My home state of Nevada has exactly ZERO FSEDs, even though we have a shortage of emergency department beds and hospitals. The reason is that the State of Nevada passed a law stating that FSEDs are not allowed if they are within 30 miles of a full service hospital. Needless to say no one is putting them up in the middle of the desert 30 miles outside of a city. Any state could theoretically pass such a law which would almost instantly mandate that most FSEDs close their doors.
 
How does it work when it comes time for a FSED to send someone to a full hospital... someone who needs admission.

Do all of these places have pre-arrangements with local hospitals to accept their admissions?
Do you have to call and get an accepting doc?

They work like a regular ED. Most have a transfer agreement with a large hospital. When a patient needs to be admitted, I call the hospitalist or accepting doc at the other facility and once they accept, the patient is transferred via ambulance and gets directly admitted. It does work remarkably well. The hospitals generally want these patients, as FSED patients generally are insured.
 
They work like a regular ED. Most have a transfer agreement with a large hospital. When a patient needs to be admitted, I call the hospitalist or accepting doc at the other facility and once they accept, the patient is transferred via ambulance and gets directly admitted. It does work remarkably well. The hospitals generally want these patients, as FSED patients generally are insured.

Interesting. How do consults work in FSED or do you generally need to admit them if they need an urgent consult from a specialist?
 
Interesting. How do consults work in FSED or do you generally need to admit them if they need an urgent consult from a specialist?

Generally they need to be transferred. Either ER to ER or admitted for the consult if it's emergent. Non-emergent we can usually have follow-up.
 
You are exactly correct. My home state of Nevada has exactly ZERO FSEDs, even though we have a shortage of emergency department beds and hospitals. The reason is that the State of Nevada passed a law stating that FSEDs are not allowed if they are within 30 miles of a full service hospital. Needless to say no one is putting them up in the middle of the desert 30 miles outside of a city. Any state could theoretically pass such a law which would almost instantly mandate that most FSEDs close their doors.

My home state has legislated that FSEDs can only be owned by referral hospitals (no physician ownership). As a result there are a grand total of 2 with both being in the largest metropolitan area.
 
In the phoenix area FirstChoice is opening a slew of FSEDs. Hospitals are falling over themselves to get transfers from these places. Everyone pays and has commercial insurance.. Hmm yeah. no self pay or taking insurance they lose on like medicare/medicaid.

If I had the opportunity to invest and own one and work in it I would in a heartbeat.

Now I tend to agree with WCI, I think as a trend it is bad for patients. The list is long as to why I think this but I think it is great for physicians to get out from under the thumb of the hospital and to a similar degree insurance companies.
 
Can someone briefly explain what is the reasoning behind banning physician owned FSEDs? I understand the actual reason is lobbying by hospitals who don't want the competition, but what is the face value rationale used by the legislators to pass such a seemingly outrageous restriction? I'm guessing it must have something to do with conflict of interest, but damn, every business has a conflict of interest, whether its your mechanic, plumber, dentist, or dermatologist. Yet no one is banning mechanic owned garages or dermatology private practice (at least not by fiat for the latter). Why single out FSEDs?
 
Can someone briefly explain what is the reasoning behind banning physician owned FSEDs? I understand the actual reason is lobbying by hospitals who don't want the competition, but what is the face value rationale used by the legislators to pass such a seemingly outrageous restriction? I'm guessing it must have something to do with conflict of interest, but damn, every business has a conflict of interest, whether its your mechanic, plumber, dentist, or dermatologist. Yet no one is banning mechanic owned garages or dermatology private practice (at least not by fiat for the latter). Why single out FSEDs?

It could be any number of reasons under the umbrella of patient safety. Such as making a rule that FSEDs have to have capabilities for emergency surgery and specify that transfer agreements don't count. Or making a rule that they need an ICU to be available, etc. Any safety rule that essentially mandates an ED being attached to a hospital would make it impossible to have a FSED.
 
It could be any number of reasons under the umbrella of patient safety. Such as making a rule that FSEDs have to have capabilities for emergency surgery and specify that transfer agreements don't count. Or making a rule that they need an ICU to be available, etc. Any safety rule that essentially mandates an ED being attached to a hospital would make it impossible to have a FSED.

I had a business law professor in college who basically said that every dumb law you ever see is due to "podium pounding." So if ever, in the world, something bad happens, some state senator or low level bull**** artist is going to get in front of a camera, pound a podium, and say "we're never going to *pound* let *pound* this *pound* happen again in our great state!"

And that's how you get mandatory minimum drug sentences, helmet laws, ham sandwich laws, etc. etc. So, inevitably, there will be some bad stuff that happens in a FSED, like someone's carotid spontaneously combusts, and some idiot will say "if only little Johnny had been in a REAL hospital with a vascular surgeon scrubbed and waiting in the ED (as they tend to do) for someone's carotid to explode, he would still be with us..." and that is how that happens. There is very little logic involved in lawmaking.
 
I was referring specifically to laws that prohibit physician ownership, rather than regulations that mandate minimum infrastructure requirements for an ED. So in other words, something like this that an earlier poster brought up:

"My home state has legislated that FSEDs can only be owned by referral hospitals (no physician ownership). As a result there are a grand total of 2 with both being in the largest metropolitan area."

This kind of law seems to specifically target the identity of the owner rather than the capabilities of the facility. That seems downright unconstitutional, if you ask me, especially since you can always have a medical facility without empty suits, but you can't have one without physicians. Legislating that some types of medical facilities can ONLY be owned by empty suits is basically a state mandated form of parasitism. The physicians do the work and the empty suits collect the resultant profits, not by reason of market forces but because the law says the empty suits must collect the profits (by owning the facility).

This begs another question: what's so hard about circumventing the anti physician laws by using some kind of shell ownership structure? I'm not a lawyer and don't know the art of the possible here, but even something as simple as getting your childhood friend to front the company and pay you out a big bonus at the end of the year seems like it should work.
 
  • Like
Reactions: 1 user
It is all stupid politics... I don't understand the person who believes FSEDs are bad for patients? In what way?

The hospital people like to say doctor ownership is a terrible idea because there is such a terrible conflict of interest. God forbid, the doctor is going to 'order a CT scan on every patient'.

I have worked in a number of very busy, large hospitals. Everyone of them have nurses ordering a rainbow of labs up front and multiple X-rays. Even organizations like ACEP back protocol driven labs. So we trust protocols but believe the doctor is doing it wrong?

I had a nurse tell me just the other day... "One reason I like working here (at the FSED) is because the doctors don't order a bunch of crap and just order what the patient needs." I laughed and explained to her how people believe we do just the opposite...

The biggest single problem with the FSED is the multitude of misconceptions out there. I think they are largely pushed around by the hospitals.

My most favorite jab from the hospital lately is recommending patients "Don't go to a FSED, go to [Hospital] Urgent Care instead." Why didn't the hospital suggest patients not go to their ER and go to their UC instead?

I also wish CMS would start reimbursing the FSEDs. IF that would happen, I think there is a successful model in rural America...... Too much Medicare in those places now though and those essentially turn into free care, and they are the sickest/cost the most to take care of...
 
"My home state has legislated that FSEDs can only be owned by referral hospitals (no physician ownership). As a result there are a grand total of 2 with both being in the largest metropolitan area."

This begs another question: what's so hard about circumventing the anti physician laws by using some kind of shell ownership structure? I'm not a lawyer and don't know the art of the possible here, but even something as simple as getting your childhood friend to front the company and pay you out a big bonus at the end of the year seems like it should work.

Well in my state that shell ownership structure you describe would still have to be a hospital which to be established requires a certificate of need which is also a political process. If you have lots of childhood friends that already own hospitals then you run in much more affluent circles than I :)
 
Can someone briefly explain what is the reasoning behind banning physician owned FSEDs? I understand the actual reason is lobbying by hospitals who don't want the competition, but what is the face value rationale used by the legislators to pass such a seemingly outrageous restriction? I'm guessing it must have something to do with conflict of interest, but damn, every business has a conflict of interest, whether its your mechanic, plumber, dentist, or dermatologist. Yet no one is banning mechanic owned garages or dermatology private practice (at least not by fiat for the latter). Why single out FSEDs?

It is basically the same logic the state has used with electric companies, telephone companies, and to some extent cable companies in granting franchises: If you want to take the lucrative areas, you have to take the high-cost areas in return.

Take a look at the postal service. Delivering mail in New York city is easy. A company could probably due it for 1/4 of the price of a first class stamp. However, it probably costs the USPS about $10 to deliver an envelope in Alaska. So the deal is if you want to deliver mail in New York you also have to be willing to deliver mail in Alaska. (Now this isn't technically correct because the USPS isn't an independent company bidding for business, but it is the basic logic behind why the USPS is given a monopoly on mail delivery and people/companies have been prosecuted for sending "first class" mail through companies like FedEx.) It is the same thing with the electric power franchise (at least in most places.) Delivering power in urban/suburban areas can be extremely lucrative, while delivering power to the rural parts of the state can be extremely expensive. So the franchising authority says if you want to take the lucrative, you have to take the costly in return.

The hospitals generally argue the same thing in reverse: they are required to take anyone who walks through the door and have large amounts of uncompensated care, so in return for that obligation, they state that they need the monopoly on emergency care so that they can have the "good insurance" patients to compensate for the low/no-pay patients.

Now that argument has many holes, but that is one of the prime reasons given to prohibit FSEDs and it does have some superficial appeal for politicians.

(And a general comment that I hope would be obvious, but.... The fact that I often explain the arguments that certain people use does not mean that it is my argument.)
 
  • Like
Reactions: 1 user
Well in my state that shell ownership structure you describe would still have to be a hospital which to be established requires a certificate of need which is also a political process. If you have lots of childhood friends that already own hospitals then you run in much more affluent circles than I :)

By the time I graduate med school and finish residency I fully expect we'll have added CNTs (Certified Nurse Tycoons) to the alphabet soup mix. I'll just ask one of them.
 
Last edited:
  • Like
Reactions: 1 users
Top