Exploring the Need for FECs
Freestanding Emergency Centers are a current trend in the healthcare industry that is attempting to break out of its shell in states like Texas and Colorado, and move on to being a nation-wide presence. With average lengthy wait times in hospital ERs due to the sheer volume of patients waiting to be seen for emergent care, advocates for the model believe that expansion across the nation will help aid in the need for FECs. Although there are state regulations that are involved in this process that are serving as current barricades, The Ambulatory M&A Advisor discusses the reasons behind the need for the continual emergence of this model.
Fletcher Brown, partner with the law firm Waller, Lansden, Dortch and Davis believes that Freestanding Emergency Centers are going to play a substantial role in the future of healthcare.
“I think generally they improve access. By improving access I mean reduction in wait time as compared to a busy urban emergency department located in a hospital. There may be some options for increased accessibility and I think that is a big advantage for them,” Brown says.
“I would also say that they are better to start based on their capital structure. Is it easier to build a 10 million dollar freestanding emergency clinic, or a multi-million dollar hospital?”
Although he says there is no definitive answer as to why physicians are moving this direction with healthcare, Brown believes it may be due to physicians possibly preferring a dedicated practice location. A multi-hospital system may ask physicians to move from one facility to the other as part of a medical staff membership. There may be a reduction in travel with one location to work at and that option might be appealing to some.
Although it is appealing to practice in one location as an emergency physician, Brown still alludes to the regulations that could hamper the idea to start up a FEC.
“Physician ownership in a freestanding emergency clinic may be appealing, and I think there are a lot of rules floating around about that, but I think it’s much easier for a physician to have an owner interest in a freestanding emergency clinic than in a full service acute care hospital. Of course, the Stark and Anti-kickback provisions need to be taken into consideration,” Brown says.
Michael Falgiani, MD, associate of University of Florida’s department of Emergency Medicine says that in his understanding of the FEC model, the state of Texas is the forefront of FECs.
Falgiani says that in Texas several emergency physicians that have decided to break away from the traditional hospital based practice, and have decided to open their own freestanding facility based on demographics and need in a general area.
“Here in the state of Florida, almost all our Freestanding Emergency Departments are hospital owned, so the majority of Freestanding Emergency Departments we are seeing in Florida are where we have a major hospital that decides to open up a freestanding emergency department in another part of that community or another city in hopes to provide access to that community in emergent medical care,” Falgiani says, emphasizing that emergent care is needed in communities whether the model is independently owned or not.
“When you look at Freestanding Emergency Departments, it is a lot easier for them to open being that they are not usually attached to a hospital. For a smaller, rural area, instead of having to open up an entire hospital facility to provide emergent care for those people, the Freestanding Emergency Departments can really help to serve that population better and serve as a resource for those patients in those smaller areas that do not have a large hospital to support them. This enables them to have immediate access to emergency medical care.”
Falgiani says that some examples of how these communities can be served include treating a patient that has some kind of traumatic event, that is having chest pains, is having a heart attack, having stroke like systems. Falgiani says with FECs in place, these patients now have access to get to an emergency department sooner, that is closer to their area to be able to receive at least stabilization and emergent medical care to provide the diagnostic studies and tests to diagnose their condition and provide life saving treatment to these patients in an urgent fashion.
As far as national needs for FECs, 43 percent of Americans go to the Emergency Room every year, and this number accounts for 2 percent of the nation’s overall healthcare dollar, Carrie De Moor, MD, President of Code 3 Emergency Physicians says.
According to De Moor, the differences in a FEC rather than an Urgent Care where many patients find themselves in emergencies, should be that there are emergency physicians that are specialists at treating emergencies on an unscheduled care basis. De Moor says at an Urgent Care patients are most likely to get a mid-level provider, resident, or family medicine physician.
“These physicians are great, but they are not emergency physicians. There is a little bit of the difference that patients are getting in a FEC. It is an Emergency Room, just not attached to a hospital,” De Moor says.
Falgiani says that in areas like Texas, the market may be getting to the point where it is starting to see a lot of these smaller Freestanding Emergency Departments pop up everywhere.
“In our community, we have been surprised at the volume of patients we are seeing in our facility, and it has opened our eyes to the real need in communities for the resources that a Freestanding Emergency Department provides. We have had a tremendous response in the community regarding the services that we provide,” Falgiani says.
Brown also gives input on the question posed of Texas having “too much of a good thing”. According to Brown, certainly lucrative zip codes whose population has good commercial insurance coverage are certainly going to see a very competitive market for these services. Areas that do not have a wealth factor or a commercial insurance prevalent may be slow to see a freestanding emergency clinic despite the community need for emergent care.
Falgiani closes with some advice to physicians thinking of breaking away and starting up a FEC in their community.
“You want to make sure that they are doing it for the right reasons; that they are doing it because of the need for the community. If somebody is going to go out and do this on their own, they need to make sure that all of the regulatory statutes are taken care of; they need to make sure they understand everything that is required to open one of these to provide the services to the community,” Falgiani says.
“For those hospital based ones, they look at it as a resource for the community and an outreach for the community that has that need. They are then able to provide that need for medical patients in the community that are far away from a local hospital.”
If you have an interest in learning more about the subject matter covered in this article, the M&A process or desire to discuss your current situation, please contact Blayne Rush, Investment Banker at 469-385-7792 or Blayne@AmbulatoryAlliances.com.