Targeted Growth

Freestanding Emergency Departments Cluster in Wealthiest Neighborhoods

March 26, 2018

March 10, 2023

Key Takeaways

Neighborhoods with freestanding emergency departments have slightly higher median incomes than those without. Communities with three or more such facilities have very high median incomes.
More than 2.3 million residents of Colorado’s Front Range — nearly half the area’s population — live in a Census tract that is within a five-minute drive of a freestanding emergency department.
The only freestanding emergency departments in rural Colorado are in ski resort towns.

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Shoppers at Aurora’s Southlands development can browse at popular chain stores like H&M or White House Black Market, grab a quick bite at Noodles & Company or sit down for lunch at P.F. Chang’s. Choices abound.

The neighborhood also has plenty of choices in emergency medical care. Four emergency rooms are located within a 15-minute drive of Southlands — two of them just across the street from the shops.

This is Colorado’s best example of freestanding emergency department clusters — a phenomenon the Colorado Health Institute (CHI) quantified through a mapping analysis.

Freestanding emergency departments have proliferated along the Front Range the past five years. But they are not distributed evenly. All the clusters are in well-to-do neighborhoods, where the median household income is more than $100,000 a year. In contrast, the median income in Front Range neighborhoods without a freestanding emergency department is $71,000.

This new CHI analysis examines the locations of Colorado’s 50 freestanding emergency departments.

Background

Freestanding emergency departments provide emergency medical care but are structurally separate from a hospital.¹ Some are satellites of local hospitals, while others are owned by non-hospital companies. They are different from urgent care centers, which treat lower acuity cases and charge less.

Texas, Arizona, Ohio and Colorado are the top states in the freestanding emergency department building boom.^{2, 3} The majority of facilities nationwide have been built since 2010.⁴ None of these states have a Certificate of Need law, which requires the facilities to demonstrate to state regulators that they will operate in an area that needs access to emergency care.

Advocates say these facilities increase access to quality emergency care. Critics say they often treat non-emergency conditions at expensive emergency room prices — often by choosing to locate in affluent neighborhoods where patients are more likely to have private insurance, which pays providers at higher rates than Medicaid and Medicare.⁵

Previous analysis by the Center for Improving Value in Health Care found that seven of the top 10 conditions treated in Colorado freestanding emergency departments in 2014 might have been handled in a lower-level, less expensive setting.⁶

Colorado legislators are considering bills in the 2018 session requiring more disclosure of potential costs, more detailed data on prices and procedures, and licensing and fee limitations for freestanding emergency departments.

FSED Table 1

CHI’s Mapping Analysis

Freestanding emergency departments cluster in well-to-do neighborhoods on the Front Range, particularly the Denver metro area.

CHI used mapping software and Census data to locate every freestanding emergency department in Colorado as of January 2018 and analyze the demographics of their neighborhoods.

We identified every Census tract that is at least partially within a five-minute drive time of a freestanding emergency department. We narrowed our analysis to the counties of Weld, Larimer, Boulder, Broomfield, Adams, Arapahoe, Denver, Jefferson, Douglas, El Paso and Pueblo, because they have the most facilities. Rural Colorado has only eight freestanding emergency departments, all in ski resort towns.

CHI then performed the same drive-time analysis for traditional hospitals.

Findings

Front Range Census tracts with one freestanding emergency department within a five-minute drive have a median annual income of $79,000 compared with a median income of $71,000 a year for those with no nearby stand-alone emergency room. The Census tracts with a nearby freestanding emergency room have a poverty rate of 8 percent, lower than the 10 percent of Census tracts without a facility.

But Census tracts with three or more freestanding emergency departments within a five-minute drive have much higher incomes and much lower poverty rates. The median household income in these areas is $101,000, and the poverty rate is just 4 percent.

Traditional hospitals, on the other hand, have the opposite results in CHI’s demographic analysis. The more hospitals within a five-minute drive, the higher the poverty rate and the lower the income.

Census tracts close to three or more hospitals have a median household income of $69,000 and a poverty rate of 9 percent compared with a median income of $83,000 and a poverty rate of 8 percent for tracts with no hospital within a five-minute drive. This likely reflects the density of hospitals in central Denver and Aurora, where incomes are lower than many suburbs.

Conclusion

This analysis shows that freestanding emergency departments cluster in high-income areas, where people are more likely to have private insurance and less likely to have Medicaid, which pays lower rates to providers than commercial carriers. Critics would say the finding supports their position that the facilities are positioned to make the most money, and that they are less likely to expand access to medical care for vulnerable populations.

The analysis is consistent with other studies done around the country that show freestanding emergency departments disproportionately located in affluent areas and those with high rates of employer-sponsored insurance.^{7, 8}

Endnotes

1 American College of Emergency Physicians. (2014). “Freestanding Emergency Departments.” https://www.acep.org/Clinical---Practice-Management/Freestanding-Emergency-Departments/#sm.0017tflnjnmefr211hu2mzbxg6k8p.

2 Harish, N.J., et al. “How the Freestanding Emergency Department Boom Can Help Patients.” (2016). NEJM Catalyst, February 18, 2016. https://catalyst.nejm.org/how-the-freestanding-emergency-department-boom-can-help-patients/.

3 Schurr, J.D., et al. (2017). “Where Do Freestanding Emergency Departments Choose to Locate? A National Inventory and Geographic Analysis in Three States.” Annals of Emergency Medicine. 69(4):383-392.e5. https://scholar.harvard.edu/files/cutler/files/1-s2.0-s0196064416301998-main.pdf.

4 Medicare Payment Advisory Commission. (2017). “Report to the Congress: Medicare and the Health Care Delivery System.” http://www.medpac.gov/docs/default-source/reports/jun17_ch8.pdf?sfvrsn=0.

5 Harish, N.J., et al.

6 Center for Improving Value in Health Care. (2016). “Utilization Spot Analysis: Free Standing Emergency Departments.” http://www.civhc.org/wp-content/uploads/2017/07/Spot-Analysis-FSED-July-2016.pdf.

7 Schurr, J.D., et al. (2017).

8 Medicare Payment Advisory Commission. (2017).