The latest issue of Bloomberg Businessweek features Lauren Etter’s article on the impact of Texas’ decision to loosen rules linked to emergency rooms.
Holly Westerby was sitting on the sidelines of a YMCA field in Houston watching her 9-year-old son play flag football one Friday night in March when she noticed he kept shaking his hand like it hurt. She pulled him to the side and saw his thumb was purple. Westerby took the boy to the closest emergency room, a center called First Choice. In less than two hours, her son saw a doctor, got an X-ray, and had his fractured thumb put in a splint.
The ER that Westerby visited is one of 145 independent emergency centers that have opened in Texas since 2010, when the state became the first in the U.S. to license ERs with no hospital affiliation. Unlike traditional emergency rooms, they handle only basic cases that don’t require surgery or overnight stays. “If I thought I was having a heart attack, I don’t know that I’d go there,” Westerby says. “But for minor injuries, I just feel that the whole process is so much quicker.”
The Affordable Care Act was supposed to cut emergency visits by giving more patients access to primary care doctors, but a survey released on May 4 by the American College of Emergency Physicians showed the opposite has happened: Seventy-five percent of ER doctors reported an increase in patients over the past year, in part because there aren’t enough primary care doctors to see newly insured patients.
That’s good news for companies like Adeptus Health, based in Lewisville, Texas, which owns the First Choice Emergency Room chain. Adeptus has 52 emergency centers in Texas and an additional 12 in Colorado affiliated with the University of Colorado Health system. It’s paying lobbyists in other states, including Arizona and Ohio, to push for regulatory changes that would allow it to open ERs there. The company also has lobbyists in Washington. Since 2012 its patient volume has more than doubled and operating revenue has tripled, to about $211 million. “When was the last time you had a good experience in a hospital emergency room?” asks Brooks O’Neil, an analyst at Dougherty & Co., a financial research firm.
Outpatient emergency rooms have been around since the 1970s and were conceived largely as a way for hospitals to provide service to medically underserved areas like poor rural regions. Adeptus and other independent ER operators are inverting that model, catering to wealthy suburban patients who, when they run into medical trouble, don’t want to drive to urban hospitals and wait long hours. By law these ERs can’t accept Medicare and Medicaid, and some insurers don’t cover all their services. Many are owned or staffed by former hospital ER doctors weary of bureaucracy and stressful work environments.
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