Doctor Owned Free Stand ER's

[NOsaintsfan]

This was mentioned in another current thread and I wanted to start a discussion about this topic.

I don't know much about freestanding ER's or how common they are (I assume not very). Cost was brought up as a reason why more doc's don't do this. I imagine that demographic/location play a big role in the viability of something like this. I found this article on the topic which gives a little bit of an overview.

www.ucaoa.org/docs/Article_Freestanding.pdf‎

Anyone have any experience with freestanding ER's? What are pro's/con's? Limitations? Viability of something like this expanding? Is this something that we may see more of in the future?

Any thoughts or ideas on the subject are appreciated.

---

Members don't see this ad.

 

[rescue1]

I'm just an EMT, not an administrator, but my understanding is they mainly exist to make money. Since they can't treat anything that requires surgery or admission to the hospital, they mainly operate as more expensive urgent care centers. We had one in my area that could only accept low priority patients--patients that could have easily been driven an extra 20 minutes to the closest hospital. Any true emergency that came in was stabilized and out the door in an IFT ambulance as fast as possible. While this may have been helpful if the closest hospital was an hour away, most free standing ERs are in the suburbs, where the money is, and where hospitals are fairly close.

The issue is it drives up insurance costs, because while the copay is the same, the insurance is billed for an ER visit, not a UC visit. So down the road it may bite everyone in the ass. But until then it makes money, so I think we'll see more of them.

 

[GeneralVeers]

I've worked in one, and they are NOT just and urgent care. Generally they have 24-hour CT, X-ray, and U/S in house. They can run codes, place lines, and are staffed by board-certified EM docs. True any really sick patient needs to be transferred out, but usually they can do anything a real ER can do.

They make financial sense as they are the best way we have of circumventing (to some extent) EMTALA. As they are small, it's easy to place them in a part of town with a high number of insured, and a low number of uninsured/medicaid.

 

[Apollyon]

At my first job, there was one, and it was described to me as "an urgent care on steroids". Had MIs there, ODs, psychs, PEs , amputations, one ped code (horrible) and a bunch of field cardiac arrests, along with mountain people, drug seekers, and folks with personality disorders that lived in the hills for good reason. Oh, and a guaranteed - GUARANTEED - big juicy abscess (never zero or two) every Sunday morning.

It was attached to an LTACH (long term acute care hospital), so acute admissions had to be shipped to one of the places with inpatient beds (the LTACH was for people more than 10 days or 2 weeks). Since we took ambulances, we were liable for EMTALA. That seems to be, generally, the difference (although, at my first job in Hawai'i, we took ambulances, but specifically were NOT beholden to EMTALA - I don't recall the specifics, but one thing we couldn't do were commit EMTALA violations).

 

[fuegofrio17]

my understanding is they mainly exist to make money. Since they can't treat anything that requires surgery or admission to the hospital.

This is false. Freestanding ERs can provide most services any other ER can provide including CT, X-ray, Labs, and US. The only difference is that they are not attached directly to the hospital. A patient requiring surgery, cath lab, or admission is transferred directly to the appropriate level of care. The cath lab can be activated by the freestanding EP and the patient transferred directly to the cath lab for intervention. Patients requiring admission are transferred directly to inpatient beds and are not required to go through the ER (or board in the ER). Patients requiring immediate surgery are transferred directly to the OR. The freestanding ER is similar to a hospital ER, the only difference being that the hallway from the ER to the floor or surgery suite is longer.

The trade off of this "longer hallway" is that patients are seen with little or no wait, they are seen at more convenient locations closer to their homes, and are treated with a higher level of customer service. Most patient visits are completed in less than 1 hour. As an example, I recently had a cardiac patient with chest pain worked up, admitted, and out the door via ambulance transfer in less than 40 minutes from patient arrival. The patient arrived to an inpatient room on the floor of the admitting hospital in less than 1 hour from initial presentation to the freestanding ER. In turn, though, if the patient initially presented to the admitting hospital ER, the wait would have been 5-plus hours, and the patient, most likely, would have boarded in the ER for several hours after admission.

Freestanding ERs are limited by state laws including the licensing of such facilities and whether or not the state requires a Certificate of Need before a permit for medical construction is granted. Texas, by far, has the most freestanding ERs. Houston presently has over 60 freestanding ERs and facilities are still being built. Houston is basically the mecca of freestandings. This has greatly affected the overall EM job market. As EM physicians are leaving the hospital-based ERs in droves for a better lifestyle at freestanding ERs (albeit at significantly lower pay) the large contract management groups are finding that is very difficult to staff the under-resourced, soul-sucking hospital based ERs.

 

[Birdstrike]

This was mentioned in another current thread and I wanted to start a discussion about this topic.

I don't know much about freestanding ER's or how common they are (I assume not very). Cost was brought up as a reason why more doc's don't do this. I imagine that demographic/location play a big role in the viability of something like this. I found this article on the topic which gives a little bit of an overview.

www.ucaoa.org/docs/Article_Freestanding.pdf‎

Anyone have any experience with freestanding ER's? What are pro's/con's? Limitations? Viability of something like this expanding? Is this something that we may see more of in the future?

Any thoughts or ideas on the subject are appreciated.

You obviously spun this off from my comments in this thread:

http://forums.studentdoctor.net/showpost.php?p=14434378&postcount=17

To answer you questions:

Cost was brought up as a reason why more doc's don't do this.

Really? Doctors don't hesitate to buy a $600,000 house when they don't have a penny in their bank account to put down. It's not unlike starting any other business or physician practice. You don't need 3/4 million in cash to do it. You certainly would need assistance, a business loan or other investors. It always costs money to make money.

I imagine that demographic/location play a big role in the viability of something like this.

This definitely does. Note the linked article which points out that some states have their own "EMTALA-like" laws. Your state may or may not. If you state doesn't, it might be time to get grandfathered in. Or, falling under the "urgent care" classification circumvents this altogether, regardless of state. I don't know of any state that applies EMTALA to urgent cares under state law. If they did, all urgent cares in such states would immediately be rendered bankrupt and have to close.

Is this something that we may see more of in the future?

Of course you'll see more free standing ECCs. That's not a question. The question is who will own and operate them. Will you work at one and be an employee or be owner, operator and pilot of one. Hospitals build their own, to cast a wider net and scoop patients and revenue from a wider area. Now is the time physicians can still own and operate UCCs and ECCs.

Someday it may be illegal for a physician to own an urgent care or free standing emergency center. "How could that be you ask? This is America, we live in a 'free country'!" Well, Obamacare banned physician ownership of hospitals in 2010.

http://www.forbes.com/sites/science...t-victim-physician-owned-specialty-hospitals/

Urgent Cares and free standing ECCs may be next.

Are you so free?

Now, why don't more EPs get the entrepreneurial spirit and take on a challenge and investment such as starting an ECC?

-Many know nothing of business, and are overwhelmed and intimidated by the idea.

-Many are attracted to EM for the ability to be an "hourly worker" with little other "after hours" responsibility. Then there is dismay when one is treated like replaceable hourly help.

-Many think being part of a "Democratic group" is the same as being your own boss. It's not. It makes you a "vendor" which is not exactly the same as being an employee and is better in many ways, but you are still a de facto employee of the hospital. It reminds me of the "Respect for physicians thread" and my own, Ruminations On Hot Dogs and Emergency Medicine

http://forums.studentdoctor.net/showpost.php?p=14037516&postcount=75

-There is risk in taking a leap and starting your own "practice" or "business" which is what such a venture is, but there is risk in taking no risk, too. Any doctor who starts a solo or group practice has this same risk, it doesn't need to seem so overwhelming. With help, ie, an accountant, healthcare attorney, and maybe a consultant it's very doable.

**Disclaimer- I've never owned or operated an Urgent Care or ECC. It's something I've strongly considered and still would consider. However, I do think it's an opportunity that's been overlooked by too many EPs to their loss. Surgeons have owned and operated ASCs and this is the EP equivalent, yet compared to surgeons, so few have gone on their own, and become independent and free.

 

[deleted109597]

Lots of good points

These are huge in Texas. Many are physician owned, and from what I can tell from the outside, it appears to be GHEP's only remaining business model.
That being said, people who do it state that the beginning capital is about $7million, due to need for imaging/CT. But many work single coverage with one nurse, one rad tech, one doctor.
Of course, like anything, expect the government to weigh in on it if people are making money.

 

[Arcan57]

These are huge in Texas. Many are physician owned, and from what I can tell from the outside, it appears to be GHEP's only remaining business model.
That being said, people who do it state that the beginning capital is about $7million, due to need for imaging/CT. But many work single coverage with one nurse, one rad tech, one doctor.
Of course, like anything, expect the government to weigh in on it if people are making money.

Docs with well setup freestandings in appropriate locations are making bank in Houston right now. The standard model is 24 hr shifts with single coverage. I'm almost certain the government is going to kill them off at the behest of the hospitals (who are also throwing up freestandings to move into new markets like Pearland). Also, these aren't guaranteed gigs. If a hospital freestanding moves in next door or a natural disaster nerfs your payor mix overnight (see southwest Houston after Katrina) then you may lose your initial investment and anything you put up as collateral to get your startup cash. We tend to be risk adverse which does not make for great entrepreneurs.

 

[NOsaintsfan]

You obviously spun this off from my comments in this thread:

http://forums.studentdoctor.net/showpost.php?p=14434378&postcount=17
.

I definitely spun this thread off from your comments in the other thread, I hope this didn't offend you. I never knew such things existed and am intrigued by the idea. Instead of derailing that thread I figured I would start this one to discuss the subject. Someone else on that thread brought up cost as a limiting factor so that's why I mentioned it.

I appreciate you and everyone else who has commented offering some insight on this. My undergraduate degree is in business management and I worked in the real world for a number of years before starting medical school, so business ideas and the thought of managing a practice of some sort is very appealing to me. Actually as I consider EM as a career the lack of the ability to own your own practice is something that I consider a negative as I think I would enjoy this. I realize as partner of a group you can sort of do this but that's not really what I'm talking about.

Physician owned and operated free standing ER's seems like a way to potentially take back "ownership" of the practice of emergency medicine. This is why I started the thread. Since I know virtually nothing about this type of practice and business model I'm glad to hear from everyone with insight into this. Thanks again.

 

[Apollyon]

I defiantly spun this thread off from your comments in the other thread, I hope this didn't offend you.

Those kinda don't go together!

I think you meant "definitely" (or hope you did!).

 

[NOsaintsfan]

Those kinda don't go together!

I think you meant "definitely" (or hope you did!).

Ha! Thanks for the catch. I'm writing on my phone and spell check got me. I'll edit and correct it later. I absolutely meant to write definitely.

 

[Silent Cool]

I definitely spun this thread off from your comments in the other thread, I hope this didn't offend you. I never knew such things existed and am intrigued by the idea. Instead of derailing that thread I figured I would start this one to discuss the subject. Someone else on that thread brought up cost as a limiting factor so that's why I mentioned it.

I appreciate you and everyone else who has commented offering some insight on this. My undergraduate degree is in business management and I worked in the real world for a number of years before starting medical school, so business ideas and the thought of managing a practice of some sort is very appealing to me. Actually as I consider EM as a career the lack of the ability to own your own practice is something that I consider a negative as I think I would enjoy this. I realize as partner of a group you can sort of do this but that's not really what I'm talking about.

Physician owned and operated free standing ER's seems like a way to potentially take back "ownership" of the practice of emergency medicine. This is why I started the thread. Since I know virtually nothing about this type of practice and business model I'm glad to hear from everyone with insight into this. Thanks again.

NOsaints,

Do you think that owning a free-standing ER as a doc is doable? Can you provide some anecdotes of this?

thanx

 

[Arcan57]

NOsaints,

Do you think that owning a free-standing ER as a doc is doable? Can you provide some anecdotes of this?

thanx

There are numerous doc owned free standings in Houston. Some of them were recruiting at ACEP.

 

[NOsaintsfan]

NOsaints,

Do you think that owning a free-standing ER as a doc is doable? Can you provide some anecdotes of this?

thanx

I seems as if many free-standing ER's are up and running. I found an article discussing some concerns over cost but it also give some other general info about the free-standing model. I think the concerns over cost raised in the article come from the fear of competition, after all if docs own ER's who stands to lose financially? Hospitals and urgent care facilities. So if I was a hospital or urgent care I would find any way I could to discredit or put free standing ER's out of business. I think that's the slant of the article but it may be worth reading for general info.

http://www.kaiserhealthnews.org/Stories/2013/July/15/Stand-alone-emergency-rooms.aspx

The answer to if it's "doable" or not is it depends. There is too much I don't know to give you a completely accurate answer. It's being done so the short answer is YES but the real answer is a little more complex.

A few of the many factors would have an effect on "doability" are:

Cost -- how much for the physical building and equipment, how much does the legal and licensing cost?

Regulations -- I would imagine each state is different but I'm sure regardless of the state there will be considerable "hoops" to jump through in terms of complying with local, state and federal regulations. This will take time and expertise to navigate through all this. It will boil down to money again because most likely you will pay a lawyer or consultant to help with this.

Research -- Considerable market research will be needed in order to determine the best location for such a facility. The community's ability to support this type of business will have to be determined. To accurately perform such research you need some answers to the questions above, mainly cost. You have to know how much it will cost you to open and to operate the ER in order to calculate a break even point. You also need to have an idea of how long it will take you to recoup your initial start up costs. Once this is determined then you can use that info to find an area with the sufficient need and median income level to support this venture.

In addition to the start up costs you will also need working capital to keep the place open. Many businesses take time in order to generate positive cash flow and I'm sure a free standing ER is no different. This means you will need extra money to pay the bills and keep the lights on until the business starts generating income. This requires you to have a fairly accurate idea of your baseline costs (rent/mortgage payment, costs of maintaining the facility/equipment, cost of labor (nurses, tech's, ect.) and then provide yourself with ATLEAST 6 months of working capital to cover things until money starts coming in.

These are just a few of the considerations when opening ANY business. There are more considerations to be sure but I think you get the point.

So is opening a free standing ER doable? The answer depends on your ability to manage and organize the considerations listed above.

If you can do the above then it's doable.

 

[EM_Rebuilder]

Texas is by far the leader for FSEDs (Free Standing Emergency Departments) and is trying to take the lead on a national push; ACEP does support the concept.

It is correct that STATES define what a FSED and if it exists. You can build a facility and see patients in it, but you bill as an Urgent Care Clinic. The key for dollar reasons is to have it declared an 'Emergency Department' as the money is in the facility fee. An UC has near or zero facility fee, a FSED has the same facility fee as a Level 1 Center in Downtown Chicago... or at least near it. That's where the money is made.

People who are creating FSEDs are mostly careful to keep a HIGH standard, which is VERY important if this ever becomes the national norm. They have acute labs, Xray, CT scans, agreements with local facilities for STEMIs, Surgeries, admissions, etc. Usually require BC/BE EM physicians only.

Recently, FSEDs have been in the news in Texas because people go to on with a sprain ankle and get a bill for $800. They 'thought' they were at an UC clinic and get sticker shocked. I think the FSEDs are mostly trying to educate the public and be up front that they are indeed an emergency department and charge like an ED. It behooves them to do this, get too much public mad, and the rules that define them change.

 

[rescue1]

This is false. Freestanding ERs can provide most services any other ER can provide including CT, X-ray, Labs, and US. The only difference is that they are not attached directly to the hospital. A patient requiring surgery, cath lab, or admission is transferred directly to the appropriate level of care. The cath lab can be activated by the freestanding EP and the patient transferred directly to the cath lab for intervention. Patients requiring admission are transferred directly to inpatient beds and are not required to go through the ER (or board in the ER). Patients requiring immediate surgery are transferred directly to the OR. The freestanding ER is similar to a hospital ER, the only difference being that the hallway from the ER to the floor or surgery suite is longer.

The trade off of this "longer hallway" is that patients are seen with little or no wait, they are seen at more convenient locations closer to their homes, and are treated with a higher level of customer service. Most patient visits are completed in less than 1 hour. As an example, I recently had a cardiac patient with chest pain worked up, admitted, and out the door via ambulance transfer in less than 40 minutes from patient arrival. The patient arrived to an inpatient room on the floor of the admitting hospital in less than 1 hour from initial presentation to the freestanding ER. In turn, though, if the patient initially presented to the admitting hospital ER, the wait would have been 5-plus hours, and the patient, most likely, would have boarded in the ER for several hours after admission.

Freestanding ERs are limited by state laws including the licensing of such facilities and whether or not the state requires a Certificate of Need before a permit for medical construction is granted. Texas, by far, has the most freestanding ERs. Houston presently has over 60 freestanding ERs and facilities are still being built. Houston is basically the mecca of freestandings. This has greatly affected the overall EM job market. As EM physicians are leaving the hospital-based ERs in droves for a better lifestyle at freestanding ERs (albeit at significantly lower pay) the large contract management groups are finding that is very difficult to staff the under-resourced, soul-sucking hospital based ERs.

But from a patient care perspective, does it make sense in an urban environment to have all these free standing ERs instead investing in a larger, better staffed hospital ER?

I understand how under the current system it may be more profitable to have these freestanding ERs in a city, and I get why they may be cost effective in a suburban or rural setting, but it seems like a lot of redundancy in an urban environment strictly from a medical standpoint.

I admit I could also be wrong, we have basically no freestanding ERs here in the Philly area so all my experience is anecdotal.

 

[Arcan57]

But from a patient care perspective, does it make sense in an urban environment to have all these free standing ERs instead investing in a larger, better staffed hospital ER?

I understand how under the current system it may be more profitable to have these freestanding ERs in a city, and I get why they may be cost effective in a suburban or rural setting, but it seems like a lot of redundancy in an urban environment strictly from a medical standpoint.

I admit I could also be wrong, we have basically no freestanding ERs here in the Philly area so all my experience is anecdotal.

There are ~27 HOSPITALS in the Houston Medical center. The last thing we need is more in-patient beds, but despite this the average LOS in Houston for discharged patients is in the 4-9 hr range. It doesn't make sense for hospital based EDs to staff to a level that the freestanding can because without having to take self-pay/Medicaid/Medicare the collection per patient is significantly higher at free-standings. If you have an young, insured population then putting up a free-standing makes sense. You can get the majority of patients in and out in <2 hrs even during peak times which gives you a huge competitive advantage over traditional EDs. Also, it's customary for a doc leaving the hospital ED to try and recruit the best nurses from their old ED to work at the freestanding. Imagine an ED staffed exclusively with well-payed, experienced nurses who may significant performance bonuses, served by a stat lab, dedicated radiology, and not full of NH pts with AMS.

Of course, in reality, all of those resources are being brought to bear on MSK complaints, lacs, and URIs so that they can collect ED level facility fees.

 

[TPBC]

Financing one of these FSEDs would be fairly do-able. Very few docs have $7 million to plop down but if you follow the financing model of the day surgical centers, sell 70 "shares" at $100,000 each (easily sold to other docs looking for investments - not just EM docs) giving a point or two higher return per annum over prime. Get four EM docs to head the thing and work there for a modest salary and 2 shares of the investment (now 78 shares total), bring in your best nurses as noted above, and give every non-doc employee a small profit sharing payment quarterly. Comply with your local and state regs and, oh, one more thing: location, location, location! Yes, it's do-able!

 

[namethatsmell]

This is true you must tell them that you are an ER. One it is mandatory and it is also an ethical thing. Also don't forget that these facilities are a great way for doctors to make great revenue. Actually, you can make quiet a bit of money as a "buy in" investor. We have doctors that buy into our free standings and make 20%-40% on their money annually and some come in as just investors. We are always looking for new investors.

I have always been told to jump on investment opportunities offering a ROI 2.5 - 5 times greater than the stock market. Especially when advertised on an internet forum.

Are you looking for new investors?

 

[GeneralVeers]

I have always been told to jump on investment opportunities offering a ROI 2.5 - 5 times greater than the stock market. Especially when advertised on an internet forum.

Are you looking for new investors?

Be careful.....this sounds like a sales pitch for My Pillow.

 

[Apollyon]

This is true you must tell them that you are an ER. One it is mandatory and it is also an ethical thing. Also don't forget that these facilities are a great way for doctors to make great revenue. Actually, you can make quiet a bit of money as a "buy in" investor. We have doctors that buy into our free standings and make 20%-40% on their money annually and some come in as just investors. We are always looking for new investors.

Your posts sound like they were written by a bot. The bolded is verbatim unchanged from at least 4 posts, like you copied it and pasted it, and I haven't even gone through all of the threads yet.

 

[bravotwozero]

ban hammer?

 

[deleted109597]

Based on the TOS this isn't spam yet. But it's being watched closely. I agree that this looks odd.

 

[namethatsmell]

Based on the TOS this isn't spam yet. But it's being watched closely. I agree that this looks odd.

Nah, stop being so suspicious.

It pays out in unicorns FYI.




Sent from my iPhone using SDN mobile

 

[RustedFox]

Be careful.....this sounds like a sales pitch for My Pillow.

Was in bed bath and beyond the other day. Grabbed a my pillow and flopped on one of their display beds.

With all sincerity, the My pillow sucks.