For hospitals challenged by increasing emergency department volumes, freestanding emergency centers have the potential to decrease wait times and increase revenue.
Robert F. Hill
Anna Steelman
Freestanding (or stand-alone) emergency centers are showing great promise as an effective approach for enhancing access to services, advancing clinical quality, and improving patient satisfaction while building market share and increasing revenue. Although freestanding emergency centers are a relatively new concept, there are one or more such centers in at least 16 states across the country, with many more centers currently under consideration or development.
Many hospitals struggle to meet the demand for emergency service; among providers that face particularly challenging circumstances, emergency department (ED) wait times can be as long as 12 hours. Freestanding emergency centers have the potential to enhance access to care while increasing market share and strengthening financial performance.
The Increased Demand for ED Care
Hospital emergency departments (EDs) handle nearly 120 million visits per year, with about half estimated as true emergent visits. The use of emergency services continues to increase by a slow, but steady rate across the United States, and overall demand will continue to increase as the population grows and ages and the number of uninsured patients, who have a greater tendency to rely on EDs for their primary care, increases.
Hospitals fail to meet benchmarks for average length of stay (LOS) in EDs for a variety of reasons. An inadequate number of beds and treatment areas, poor space configuration, and inefficient operations are the major contributors to delays and logjams, but external factors also impact the ED.
Efforts by healthcare organizations and physician groups to accommodate patients more efficiently by developing fast-track and urgent care services have had limited success in moderating and decompressing ED volume. The recent proliferation of minute clinics has the potential to provide some degree of relief, but is not a complete solution.
What Freestanding Emergency Centers Bring to the Table
Freestanding emergency centers must meet the same requirements as hospital-based emergency centers and are subject to the same regulations. They generally operate 24 hours per day, seven days per week, and are typically located within 15 miles of the main hospital campus. Since ED patients are considered outpatients by the Centers for Medicare and Medicaid Services (CMS), identical reimbursement is usually available for the main hospital ED and its freestanding emergency centers.
Advocates of freestanding emergency centers cite the following key benefits.
- Enhanced access to care and ability to meet the increasing demand for emergency and ancillary services
- Development of sites and services that differentiate the organization from competitors
- Increased market share
- Ability to serve as a referral source for affiliated physicians
- Potential to generate incremental use of hospital-based services
- Opportunity to mitigate competitive threats
There are several key areas in which freestanding emergency centers differ from hospital-based emergency departments. The average LOS in the freestanding centers is about half that of hospital-based EDs (1.5 hours versus 3), but only 5 percent to 10 percent of patients at freestanding emergency centers are admitted versus the 15 percent to 20 percent admission rates typically found in hospital EDs. Although the freestanding centers often have highly experienced staff comfortable working in satellite locations, they do not have the full range of clinical services and personnel immediately available, necessitating transfers if consults are needed.
Strategies for Success
For healthcare organizations considering whether freestanding emergency centers are a sound strategic choice given the challenges they face, the following strategies for success should be considered.
Select an attractive location, and provide a comprehensive array of services. A freestanding emergency center should be conveniently located close to major transportation routes with a high level of visibility, preferably in an area with a growing population base and a good payer mix. Signage is also critical for recognition. It is best to co-locate the freestanding emergency center with complementary ambulatory services (physician offices, X-ray, CT, and laboratory services, at minimum), to enhance the likelihood of success.
Staff the center with board-certified emergency medicine physicians. Establishing the emergency center as a full-service, high-quality patient care option with both the community and EMS is a key determinant of the success of the center. Physicians staffing the freestanding emergency center should have the same (or higher) level of credentials as physicians at the hospital-based emergency department. JCAHO reportedly prefers that the same physicians and group practices (i.e., emergency services, radiology, and pathology) from the affiliate hospital provide services to the freestanding emergency center.
Hire experienced and cross-trained staff. A freestanding emergency center functions more effectively with experienced staff. Nurses should have advanced cardiac life support/pediatric advanced life support (ACLS/PALS) training and clinical experience in emergency services or critical care. Evening shift staff should be cross-trained to allow for greater efficiency and reduce expenses. Imaging technicians should be cross-trained to cover general radiology and CT scan to maximize staff efficiency over a 24/7 operation.
Identify any regulatory barriers. In all states, freestanding emergency centers must meet the same physical plant, occupancy, and construction requirements as hospital-based EDs. Freestanding emergency centers are also subject to identical regulation (e.g., EMTALA, JCAHO) as the sponsoring hospital’s ED. Some states restrict or prohibit the development of freestanding emergency centers.
Ensure hospital-level reimbursement. Freestanding emergency centers must receive the same level of reimbursement as hospital-based EDs. Contracts should be in place with commercial insurers well in advance of opening. Even when reimbursement is equal to what a hospital emergency department would receive, freestanding emergency centers may require subsidization to cover operating losses. Breakeven performance at the centers is typically achieved with annual volume of 13,000 to 15,000 patient visits.
Develop and maintain strong relationships with local EMS representatives. EMS representatives should be engaged regularly throughout the planning process and educated about the level of care that will be provided. Pre-opening tours of the freestanding emergency center and personal visits and presentations to EMS stations help raise awareness about the center and its capabilities.
Engage in formal, effective marketing efforts (e.g., advertisements, speaking engagements). The public should be informed that the freestanding center provides emergency services (as opposed to urgent care services) and be made aware of the location. The host organization should also reach out to referring physicians to make them aware of the services offered and present the center as an option for mitigating the burden of after-hours care.
Develop a well-defined transfer system. Freestanding emergency centers must have a commitment from the host hospital medical staff to accept transfer patients and provide preferential access to inpatient beds and cath labs. A backup plan must be in place if the host hospital ED is on divert.
Ensure that the center has the ability to accept and treat high-acuity patients. Patient acuity will vary among freestanding emergency centers, depending on the comfort level and regulations of EMS squads and the respective center’s proximity to other hospitals. Freestanding emergency centers should have the ability to accept basic and advanced life support patients, many of whom walk in rather than arrive by ambulance. A freestanding emergency center should be able to treat and stabilize emergency patient levels I through V.
Create synergies and cross-referrals between the freestanding emergency center and other services. The freestanding emergency center can be a referral source for other services co-located on the campus, and vice versa. Complementary services will increase foot traffic at the site and improve the potential for higher volume of other key services.
Have a plan for expansion. Successful freestanding emergency centers often quickly exceed volume projections. Expansion capacity should be identified during initial planning.
A Success Story
WakeMed is a two-hospital, 746-bed, private, not-for-profit healthcare system in Raleigh, N.C. The system is renowned for its robust trauma and emergency services throughout eastern North Carolina. WakeMed’s North Healthplex is one of the system’s outpatient facilities, offering day surgery, endoscopy, outpatient rehab, radiology, laboratory, physicians’ offices, and the state’s first freestanding emergency center. The North Healthplex is a 104,000 square-foot facility, and is located approximately 12 miles from WakeMed’s Raleigh campus. The North Healthplex opened in 2002, although initially without emergency services.
The region’s population growth and increasing demand for emergency services led to consideration of a freestanding emergency center. After completion of business planning and overcoming regulatory hurdles, a 14-bed freestanding emergency center opened at the North Healthplex in July 2005. Initial volume projections for the freestanding emergency center were conservative, at 14 patients per day. On the center’s first day of operation, 4 patients entered the facility in just the first few hours of operation. Since then, volumes have steadily increased. In FY07, the freestanding emergency center handled more than 28,000 visits—approximately 75 patients per day. Average door-to-discharge times at the freestanding emergency center range from 2.5 to 3.0 hours.
The freestanding emergency center has captured primarily incremental business, with the a minimal impact on ED volume at the Raleigh campus. Approximately 3 percent of the emergency center’s patients are transported to the Raleigh campus, which is the closest WakeMed tertiary facility. Only a very small portion of the freestanding emergency center’s patients are transferred to facilities outside the WakeMed system. Of the patients transported to the Raleigh campus, 5 percent were admitted.
A number of factors contributed to WakeMed’s success. WakeMed leadership completed a comprehensive business planning process, which included visits to established freestanding emergency centers across the country. The planning process also included understanding the regulatory environment in North Carolina and completion of detailed volume and financial projections. Local EMS representatives were engaged early in the planning process, including an exclusive open house at the freestanding emergency center. The community was educated on the freestanding emergency center’s capabilities through mailings, presentations (e.g., to churches, Rotary Club, etc.), and even a beach-themed fair that included tours of the facility.
The community has benefited from enhanced access to care, with considerably higher levels of patient and family satisfaction than at hospital-based emergency departments. The center has exceeded WakeMed’s expectations in terms of operating and financial performance. As a result, in February 2008, WakeMed opened its second freestanding emergency center at its Apex Healthplex. Apex was created to not only serve a rapidly growing market, but also to decompress the busy ED at the system’s Cary Hospital.
WakeMed plans to expand their freestanding emergency center capacity further and recently received CoN approval from North Carolina to relocate 20 beds from the system’s Raleigh campus to the North Healthplex. The project is expected to cost $24.5 million and will renovate 17,000 existing square feet and add 25,000 square feet of new space. The health system is also in the early planning phases for development of a third freestanding emergency center.
When thoroughly planned and carefully executed, freestanding emergency centers have the potential to greatly improve access to much needed emergency care and allow health care organizations to reach new markets, increase utilization of hospital-based services, strengthen referral relationships, and improve operating and financial performance.
Robert F. Hill, FACHE, is a principal, Health Strategies & Solutions, Inc., Philadelphia (rhill@hss-inc.com).
Anna Steelman, CHE, is a senior consultant, Health Strategies & Solutions, Inc., Philadelphia (asteelman@hss-inc.com).