Nav: Home

When a freestanding emergency department comes to town, costs go up

October 22, 2019

HOUSTON -- (Oct. 22, 2019) -- Rather than functioning as substitutes for hospital-based emergency departments, freestanding emergency departments have increased local market spending on emergency care in three of four states' markets where they have entered, according to a new paper by experts at Rice University.

State policymakers and researchers should carefully track spending and use of emergency care as freestanding emergency departments disseminate, to better understand their potential health benefits and cost implications for patients, the researchers said. The study appears in the journal Academic Emergency Medicine.

Freestanding emergency departments deliver emergency care in a facility that is physically separate from an acute care hospital. They are commonly found in strip malls in urban parts of Texas.

"Proponents of freestanding emergency departments claim that these facilities can relieve the burden of overcrowded waiting rooms in hospital-based emergency departments," said Vivian Ho, lead author and the James A. Baker III Institute Chair in Health Economics and director of the Center for Health and Biosciences at Rice's Baker Institute for Public Policy. "We sought to test whether these facilities increase spending, because they might serve as supplements to traditional emergency departments rather than substitutes."

There have been numerous stories in the media of patients seeking care in these facilities, who were shocked when they later received bills totaling thousands of dollars.

"Consumers mistakenly thought that freestandings would be low-cost because they look so much like a neighborhood clinic, and facility staff often told patients that their care would be covered by their health insurance, when in fact it wasn't," said Ho, who is also a professor of economics at Rice and a professor of medicine at Baylor College of Medicine.

The researchers accessed the de-identified claims data for 2013 through 2017 from Arizona, Florida, North Carolina and Texas through Rice's participation in the Blue Cross Blue Shield Alliance for Health Research, which was established to engage leading U.S. health care researchers in collaborative efforts to explore critical health care issues. The collaboration provides researchers with access to HIPAA-compliant data from Blue Cross Blue Shield Axis, the largest collection of commercial insurance claims, medical professional and cost of care information, through a secure data portal.

They chose to examine claims from these four states, because BCBS has a relatively large market presence in them, and they also experienced significant entry of freestanding emergency departments in the past few years. The researchers aggregated the information on emergency department spending (both at hospitals and freestanding emergency departments) into 495 different local markets (Public Use Microdata Areas, or PUMAs) by quarter and year.

They then merged the spending data with counts of freestanding emergency departments by quarter and year in each local market, as well as demographic characteristics of the population in each PUMA. Finally, the researchers applied regression analysis to track changes in average emergency department spending as freestanding emergency department entry increased over time in each local market, controlling for sociodemographic changes that also occurred during the study period.

The researchers found that entry of an additional freestanding emergency department in a local market was associated with a 3.6 percentage point increase in emergency provider reimbursement per insured beneficiary in Texas, Florida and North Carolina. There was no change in spending associated with a freestanding emergency department's entry in Arizona. Entry of an additional freestanding emergency department was associated with an increase in emergency department utilization in Texas, Florida and Arizona, but not in North Carolina. The implied increases in utilization varied between roughly 3 and 5%. The estimated out-of-pocket payments for emergency care increased 3.6% with the entry of a freestanding emergency department in Texas, Florida and Arizona, but declined by 15.3 percentage points in North Carolina.

"Health care continues to account for an increasing share of the U.S. economy, and emergency care spending as a share total health care costs is also rising," Ho said. "Therefore it is troubling that in three of four states, entry of freestanding emergency departments results in higher spending, which may not yield significant health benefits. Given that previous studies suggest that much care provided by freestanding emergency departments could be delivered in lower-cost settings, policy makers should carefully regulate entry of these providers as well as their billing practices."

"We are pleased to bring transparency and insights to critical health issues, such as the rising cost of emergency care, and to work alongside Rice University and the eight other prestigious institutions participating in the Blue Cross Blue Shield Alliance for Health Research," said Maureen Sullivan, chief strategy and innovation officer for the Blue Cross Blue Shield Association. "Our priority is to make the data available so we can generate meaningful solutions that improve quality of care and affordability for all Americans."
The paper, "Freestanding Emergency Department Entry and Market-Level Spending on Emergency Care," was co-authored by Rice economics doctoral student Yingying Xu and Dr. Murtaza Akhter, assistant professor of emergency medicine at the University of Arizona College of Medicine-Phoenix.

For more information or to schedule an interview with Ho or one of the other authors, contact Jeff Falk, associate director of national media relations at Rice, at or 713-348-6775.

Related materials:


Akhter bio:

Ho bio:

Xu bio:

Follow the Baker Institute via Twitter @BakerInstitute.

Follow the Baker Institute's Center for Health and Biosciences via Twitter @BakerCHB.

Follow Rice News and Media Relations via Twitter @RiceUNews.

Founded in 1993, Rice University's Baker Institute ranks among the top three university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute's strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes -- including a public policy course -- and student leadership and internship programs. Learn more about the institute at or on the institute's blog,

Rice University

Related Rice Articles:

Climate change could increase rice yields
Research reveals how rice ratooning practices can help Japanese farmers increase rice yields.
Breeding new rice varieties will help farmers in Asia
New research shows enormous potential for developing improved short-duration rice varieties.
High-protein rice brings value, nutrition
A new advanced line of rice, with higher yield, is ready for final field testing prior to release.
Rice plants engineered to be better at photosynthesis make more rice
A new bioengineering approach for boosting photosynthesis in rice plants could increase grain yield by up to 27 percent, according to a study publishing January 10, 2019 in the journal Molecular Plant.
Can rice filter water from ag fields?
While it's an important part of our diets, new research shows that rice plants can be used in a different way, too: to clean runoff from farms before it gets into rivers, lakes, and streams.
Rice plants evolve to adapt to flooding
Although water is essential for plant growth, excessive amounts can waterlog and kill a plant.
Breeding better Brazilian rice
Rice production in Brazil is a multi-billion-dollar industry. It employs hundreds of thousands of people, directly and indirectly.
Breakthrough in battle against rice blast
Scientists have found a way to stop the spread of rice blast, a fungus that destroys up to 30% of the world's rice crop each year.
More rice, please: 13 rice genomes reveal ways to keep up with ever-growing population
Rice provides 20% of daily calories consumed globally. We will need more as population grows toward 9-10 billion by 2050.
Ancient rice heralds a new future for rice production
Growing in crocodile infested billabongs in the remote North of the country, Australia's wild rice has been confirmed as the most closely related to the ancient ancestor of all rices.
More Rice News and Rice Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Debbie Millman: Designing Our Lives
From prehistoric cave art to today's social media feeds, to design is to be human. This hour, designer Debbie Millman guides us through a world made and remade–and helps us design our own paths.
Now Playing: Science for the People

#574 State of the Heart
This week we focus on heart disease, heart failure, what blood pressure is and why it's bad when it's high. Host Rachelle Saunders talks with physician, clinical researcher, and writer Haider Warraich about his book "State of the Heart: Exploring the History, Science, and Future of Cardiac Disease" and the ails of our hearts.
Now Playing: Radiolab

Insomnia Line
Coronasomnia is a not-so-surprising side-effect of the global pandemic. More and more of us are having trouble falling asleep. We wanted to find a way to get inside that nighttime world, to see why people are awake and what they are thinking about. So what'd Radiolab decide to do?  Open up the phone lines and talk to you. We created an insomnia hotline and on this week's experimental episode, we stayed up all night, taking hundreds of calls, spilling secrets, and at long last, watching the sunrise peek through.   This episode was produced by Lulu Miller with Rachael Cusick, Tracie Hunte, Tobin Low, Sarah Qari, Molly Webster, Pat Walters, Shima Oliaee, and Jonny Moens. Want more Radiolab in your life? Sign up for our newsletter! We share our latest favorites: articles, tv shows, funny Youtube videos, chocolate chip cookie recipes, and more. Support Radiolab by becoming a member today at