Freestanding EDs increased emergency out-of-pocket spending in local markets, study finds

The opening of freestanding emergency departments increased emergency out-of-pocket spending in several states' markets over five years, according to a study published Oct. 23 in Academic Emergency Medicine.

Researchers examined Blue Cross Blue Shield insurance claims data from Texas, Arizona, Florida and North Carolina as well as data from the U.S. Census Bureau American Community Survey. They used the data to estimate the link between freestanding EDs entering local markets and total spending on emergency care, out‐of‐pocket spending and utilization from January 2013 to December 2017. 

The study found each new freestanding ED in a local market in Texas, Florida and North Carolina was associated with a 3.6 percentage point increase in emergency provider reimbursement per insured beneficiary in those states. There was no associated spending change in Arizona.

Researchers also found each new freestanding emergency department was associated with an increase in ED utilization in Texas, Florida and Arizona, but not North Carolina.

Additionally, each new freestanding ED was associated with a 3.6 percentage point increase in estimated out‐of‐pocket spending per beneficiary in Texas, "and the magnitude was not significantly different from Texas for Florida and Arizona," according to the study. But in North Carolina, each new freestanding ED was associated with a 15.3 percentage point increase in estimated out‐of‐pocket spending per enrollee.

"Rather than functioning as substitutes for hospital‐based EDs, [freestanding] EDs have increased local market spending on emergency care in three of four states' markets where they have entered," the study authors concluded. "State policy makers and researchers should carefully track spending and utilization of emergency care as [freestanding] EDs disseminate to better understand their potential health benefits and cost implications for patients."

 

More articles on healthcare finance: 

Hospital leaders express concerns about Massachusetts healthcare cost-cutting bill
Pennsylvania hospitals see boost in ER visits, admissions amid Hahnemann closure
Health systems explore decoupling hospital chargemaster from Medicare payments

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