Written by: John R. Dayton, MD, FACEP, FAAEM and Erik D. Barton, MD, MS, MBA, FACEP, FAAEM
Keywords: Free-Standing ER, Free-Standing Emergency Medicine, Emergency Medicine, Utah, South Jordan Health Center (SJHC), University of Utah, ACA, ACO, ACEP, CMS, SJED, FSED, Freestanding ED, Satellite ED, Planning, ACEP report card, Texas, CON, Land Grant, HOPDS
The South Jordan Health Center (SJHC) and South Jordan Emergency Department (SJED) were established in January 2012. This dual facility was built to provide both primary and specialty care to University of Utah patients who live in a community that is nearly twenty miles from the main University of Utah Hospital. The new facility was built in South Jordan after population growth in the area and a community request for the University to build a facility to care for its citizens. Its creation was also built in response to new legislative and policy demands. The Patient Protection and Affordable Care Act (PPACA) requires Accountable Care Organizations (ACOs) like the University of Utah to consolidate care for its patients. Additionally, the American College of Emergency Physicians (ACEP) has shown that Utah patients lacked access to emergency care. Creation of the SJED required approval by the University of Utah’s Health Science Executive Council and the city of South Jordan. Existing laws did not require special permission from either the state of Utah or the Centers for Medicare and Medicaid Services (CMS).
Future academic goals for the SJED include providing a site for a community emergency medicine rotation for medical students and a specialized training location that will offer Advanced Certification to mid-level providers. Though the creation of many Freestanding Emergency Departments (FSEDs) has been criticized for being driven solely by profit, the SJED has met its stated goal of treating University patients and this is reflected in the fact that 74% of the patients who were treated in the new SJED during the first year of operation were patients who had previously been treated in another University clinic or at the main University Hospital. While it is a common criticism that many FSEDs charge a facility fee, the SJED is justified in charging that fee as it is a fully functional emergency department that actually absorbs the costs of patient transfers, as needed, from SJED to the main University Hospital.
Currently, there are approximately 400 FSEDs in 16 different states.1 The most common type of FSEDs is a Hospital Outpatient Department (HOPD), or satellite Emergency Department, owned by a regional hospital or a large healthcare organization. The other type of FSED is an Independent Freestanding Emergency Department (IFSED) that is owned by physicians or another private group.
HOPDs represent 86% of FSEDs. Forty-five states have HOPDs. As of March, 2013, states with the most HOPDs were Ohio with 29, Texas with 26, and Mississippi with 20.2 HOPDs are usually about 10 miles away from the main hospital ED.3 A study looking at how establishing 2 satellite EDs would affect the ED visits of the main hospital showed that there was an initial decrease in number of ED visits to the main hospital ED but an increase in the number of visits to the hospital system.4 Follow up showed that the number of patient visits to the hospital ED eventually returned to pre-HOPD volumes and that the overall hospital system visits had doubled over six years.5
Most of the IFSEDs are found in Texas. As of July 2013, Texas has 56 IFSEDs.2 with 10 under construction.6 Currently, there are 87 FSEDs in Texas.
One of the trends that led to creation of FSEDs was the closure of traditional hospital-based Emergency Departments (EDs). Between 1990 and 2009, 27% of non-rural Emergency Departments closed.7 However, from 1998 through 2008, emergency department visits increased 30%, from 94.8 million per year to 123 million per year.8 The closure of EDs disproportionately affected minority and low-income patients and most of that increase was made up of Medicaid users who increased ED visit frequency from 693.9 to 947.2 visits per 1,000 enrollees.9,10 According to the Emergency Medicine Treatment and Labor Act, emergency care is mandated whether or not a patient can afford care.11 As a result, EDs have increasingly dealt with overcrowding of patients and have also seen understaffing of critical care support.12
Part of the increase in the number of FSEDs is that patients who use them have been shown to value the convenience of shorter wait times, ease of obtaining an appointment, and increasingly convenient locations, even if the visit is more expensive than a scheduled appointment with their primary physician.13 Additionally, the average FSED user tends to be younger and is more likely to seek trauma-related care or a physical than the typical primary care patient, where ages and diagnoses are more evenly distributed.14 Of the pediatric patient visits, approximately 60% of FSED visits are due to two main complaints: upper respiratory infection and trauma.15
Population Trends and Legislative Needs Create Demand for University Facility
The University of Utah’s University Hospital is located in the northeast corner of Salt Lake County in Salt Lake City, Utah. The Emergency Department is a Trauma 1 facility and a tertiary referral center that treats approximately 39,000 patients a year. It has one of the largest catchment areas, treating patients from Utah, Nevada, Wyoming, Idaho and western Colorado.
On the opposite corner of Salt Lake County, in the southwest area, there was large population growth during the 2000s. Cities like South Jordan, Herriman and Riverton experienced a 141%, 1,330% and 122% growth increase in population, respectively.16 In the city of South Jordan, a master-planned community called “Daybreak” began development in 2004. This was directed by Kennecott Land, a subsidiary of the Rio Tinto, a mining corporation that operates a nearby copper mine. Daybreak was created with a goal of ultimately building a walking community of 20,000 residential units with close access to parks, stores, and health care.
Due to population growth and expansion of University patients to this developing area, the University now had many of its patients living several miles from the main hospital campus. If these patients were to drive from their homes to the University Hospital, they would pass multiple non-University hospitals. This led to a concern that the University would be not be involved in the continuity of care for its patients. This situation corresponded with the Daybreak community’s desire to have a new healthcare facility of their own as part of the community design.
While the local need for a new health care facility was increasing, legislation and public policy were also encouraging the establishment of a new facility. On the national level, legislation and Emergency Medicine initiatives contributed to the drive to create a University facility that would serve its patients in southwest Salt Lake County. On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. The constitutionality of PPACA was upheld by the Supreme Court on June 28, 2012. One of the provisions of PPACA, Section 3022, called for the use of Accountable Care Organizations (ACOs) that would “[promote] accountability for a patient population and [coordinate] items and services… [and encourage] investment in infrastructure and [redesign] care processes for high quality and efficient service delivery.”17
In 2009, Utah received a “D-” grade from the American College of Emergency Physician’s (ACEP) National Report Card on the state of Emergency Medicine. Utah received particularly low marks for the category of “Access to Emergency Care.” Additionally, local primary physicians were following the national trend of wanting to work with emergency physicians to use the Emergency Department as a rapid diagnostic center and assist with admitting their patients to the hospital, as needed. 18
Given the local population growth, national legislation and policy pressures, the University recognized it would have an ability to serve its patients by building facilities where those patients lived. As there was not a need for a new hospital in the area, the University made a decision to build the South Jordan Health Center, with multiple primary care and specialty offices, and the freestanding South Jordan Emergency Department. University patients would now be treated in their own neighborhood. Most would be able to receive treatment in the clinics and the emergency department and return home. Those that required admission and more specialized care would be transferred to the main University Hospital.
When the University was planning to build the SJHC and the SJED for the Daybreak community, there were no FSEDs affiliated with any academic institutions in Utah. The University’s Health Science Executive Committee met to discuss creation of the new South Jordan facility.
Initially, the proposed plan was met with mixed support. The creation of the SJHC and SJED was supported by the University’s Divisions of Emergency Medicine and Cardiology and the Departments of Surgery, Orthopaedics and Radiology. These groups had established patients living in the southwest part of Salt Lake County and recognized the opportunity to take care of these patients in their own community. There was opposition, however, from both the Medical School and the Department of Internal Medicine. These groups were concerned that the new facility would represent a financial liability and offer no benefit to them.
The University of Utah’s Health Sciences Executive Council approved the proposal for a FSED in the fall of 2008. Hospital officials wanted to be able to provide health care for the University patients in the South Jordan area. Another driving force was the ACEP State of Emergency Care Report Card. State officials wanted to make sure that access to emergency care was increased for the patients living 20 miles from the University Hospital. One of the main goals was to improve the ratio of emergency department beds per patient population.
To learn more about FSED operations, building design, and to evaluate whether to use local versus hospital support services, a group of physicians visited the Swedish Southwest FSED in the Spring of 2009. This FSED is associated with the Swedish Medical Center and is located in Littleton, Colorado.
Local, State and National Laws
Now that the University had decided to move forward, approval was needed locally from the city of South Jordan. Part of the development of Daybreak was a goal for citizens to have easy local access to healthcare. With this in mind, Daybreak and Kennecott land officials approached the University of Utah about a partnership to create a healthcare facility in the area. On November 17, 2008 they announced construction plans.19
Kennecott Land filed an application for Site Plan Review with the City of South Jordan in January of 2010. The City Planning Commission reviewed the drawings and plans submitted with the application and held a public hearing on February 23rd, 2010. The approval included specific requirements for building components, landscaping and signage.
The state of Utah did not need to grant special permission to build the SJED because it was considered to be a direct satellite extension of the University Hospital ED. State approval is only needed to consider budgetary considerations for educational components of the University of Utah Health Sciences, such as the School of Medicine and the Colleges of Nursing and Pharmacy.
Utah, like Texas, is one of the fourteen states that does not require a Certificate of Need (CON) for a new FSED to be built. The 36 other states (along with DC and Puerto Rico), require a CON granted by their state legislatures to determine whether a new healthcare facility is needed before it is approved for construction.20
National Conference of State Legislatures. [Web Graphic]. Retrieved from http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx
In addition to whether or not a state requires a CON, there are other differences in state laws governing FSEDs. Florida,21 Utah and North Carolina require the FSED and parent hospital to be under the same license. This allows for the creation of SJED in Utah, four WakeMed HOPDs in North Carolina, and seven Health Care Association HOPDs in Florida. Illinois22 and Delaware23 require FSEDs to have a FSED-specific license. FSEDs must be open 24 hours a day in Delaware, Idaho, Illinois and Texas. However, FSEDs in Rhode Island do not have this requirement.2 Private IFSEDs are allowed in Texas, Delaware and Rhode Island. HOPDs are the only type of FSED allowed in Idaho and Illinois.24 California does not have an outright ban on FSEDs, but the strict definition of what determines an “emergency department” and how “immediate care” is defined by California law makes the creation of a FSED in California almost impossible. California requires FSEDs, like traditional EDs, to have trauma surgeons on site and available operating rooms to fulfill California legal requirements.25
Because SJED is a satellite facility for the University Hospital it did not require specific national legislation or approval. In 2008, CMS created a memorandum to address “Requirements for Provider-based Off-campus Emergency Departments and Hospitals that Specialize in the Provision of Emergency Services.” In keeping with these criteria, and Code of Federal Regulations (CFR) 482, which addresses the conditions of participation in Medicare and Medicaid services, SJED recognizes the following criteria:26
Currently, the FSED is used as a location for Fellows from the Division of Emergency Medicine to gain clinical experience through direct patient care. Future goals include using the site for medical student rotations and advanced training for mid-level practitioners. The site will be used for fourth year medical students who want to complete a community emergency medicine rotation. Additionally, for mid-level practitioners (Physician Assistants and Nurse Practitioners), the site can be used for an Advanced Certification Program for those mid-levels who want to specialize or receive additional training in emergency medicine. At this time, there is no plan to use the site for training for the Division of Emergency Medicine’s residency training program.
Response to Common Criticism
Common criticisms for FSEDs include creation for financial goals only, place holding for future hospitals, and inappropriate use of facility fees.
The University’s answer to financial criticism is that the FSED was created with the intention of taking care of the University’s patients who live in the southwest part of Salt Lake County. During the first year of operation, 74.19% of patients treated at the FSED were patients who had been treated at other University facilities in the past. This coordination of patient care at the SJHC and SJED is possible because healthcare providers in all University locations use the same Electronic Health Records, imaging software, specialty call schedule, and scheduling departments.
There is validity to the criticism that FSEDs are being used as placeholders for future hospital development. The healthcare market in Utah consists of a few local hospitals, the largest healthcare provider in the Intermountain West (Intermountain Healthcare) and two national healthcare companies (Hospital Corporation of America and Iasis). Given the competitive healthcare marketplace, Utah’s population growth, and the desire to manage patient care as part of an Accountable Care Organization, local healthcare companies have followed a national trend of claiming territory with initial plans for a FSED and ultimate plans for a full hospital at that site as the population increases.
The Hospital Corporation of America recently followed this business plan in Draper, Utah, which is one of Utah’s wealthier cities. The Lone Peak Emergency Center, Utah’s first FSED, opened in May of 2010. In 2013, the facility expanded with the addition of 30 inpatient beds and became Lone Peak Hospital. Similarly, the ultimate plan for the University’s SJHC and SJED involves expansion to a full hospital when the local population will be large enough to support that change. This plan was made by both the University of Utah and Kennecott Land, who developed the master-planned community of Daybreak.
The final common criticism of FSEDs is the use of facility fees comparable to those charged by full hospitals. Because the South Jordan Emergency Department is legally an extension of the main University Hospital Emergency Department and since it has the capabilities of a full emergency department, the SJED charges a facility fee to its patients. If a patient requires admission to the main University Hospital, however, there is no second fee charged. Additionally, because the South Jordan Emergency Department is an extension of the University’s Emergency Department, if a patient requires ambulance transport to the main University Hospital, this patient is not charged for this and the University covers the cost.
The University of Utah’s South Jordan Health Center (SJHC) and South Jordan Emergency Department (SJED) were built to meet the needs of University patients living 20 miles away from the main University hospital campus. Factors contributing to the development included development goals for a master-planned community, legislative changes stressing the importance of Accountable Care Organizations, and a national and state push to increase the number of available emergency department beds per patient. The creation of SJED required approval at the University and city levels, but did not require specific state legislation as Utah law allows HOPDs. The unique facility will offer educational opportunities to university medical students, residency fellows, and mid-level physicians seeking to advance their skills in caring for emergency patients. While there are criticisms of the business model for FSED creation, the university goal of taking care of its patients in their own community has been met. Also, while the practice of FSEDs charging facility fees has been criticized, the SJED functions as a fully-operational emergency department and an extension of the University’s main campus’s emergency department which justifies the fee. Patients requiring admission from the SJED to the University Hospital Center are not double charged a facility fee at the time of their inpatient admission and the ambulance transfer costs are covered by the University.
1 Williams, M., & Pfeffer, M. California Healthcare Foundation, (2009). Population trends and legislation needs create demand for university facility. Retrieved from website: http://www.chcf.org/~/media/MEDIA LIBRARY Files/PDF/F/PDF%20FreestandingEmergencyDepartmentsIB.pdf
2 Armour, S. (2013, March 31). Aetna opposes investor-owned ers as $1,500 fees charged. Bloomberg. Retrieved from http://www.bloomberg.com/news/2013-04-01/aetna-opposes-investor-owned-ers-as-1-500-fees-charged.html
3 Sullivan AF, Bachireddy C, Steptoe, et al. A profile of freestanding emergency departments in the
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http://www.acep.org/uploadedFiles/ACEP/Practice_Resources/issues_by_category/administration/Freestanding Emergency Departments 0713.pdf
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8 Trendwatch chartbook 2010: trends affecting hospitals and health systems: appendix 3, table 3.3. American Hospital Association. http://www.aha.org/research/reports/tw/chartbook/2010chartbook.shtml. Accessed February 3, 2014.
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11 Emergency Medical Treatment and Active Labor Act, 42 USC §1395dd (2000)
12 Hospital-based emergency care: at the breaking point. Institute of Medicine.http://www.iom.edu/~/media/Files/Report%20Files/2006/Hospital-Based-Emergency-Care-At-the-Breaking-Point/EmergencyCareFindingsandRecs.pdf. Accessed February 3, 2014
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14 Yunker et al. Free-standing emergency centers and the patient population of family physicians. J Fam Pract. 1985 Jul;21(1):63-9.
15 Yunker et al. The Pediatric Population of Two Free-standing Emergency Clinics. Clin Pediatr. 1985 Apr;24(4):210-214.
17 Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, §3022 124 (2010)
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19 University health care to open multi-specialty center in South Jordan’s Daybreak community. (17, November 2008). Retrieved from http://healthcare.utah.edu/publicaffairs/news/archive/2008/DaybreakHealthCtr Announcement.html
20 Cauchi, R. (2011, January). Certificate of need: State health laws and programs. Retrieved from http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx
21 Florida Agency for Health Care Association, December 2004
22 Illinois Register Title 77, Chapter IIa, Section 1111036560
23 Delaware Administrative Code, 4404
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25 California Health and Safety Code 1798.175
26 Hamilton, T. DEPARTMENT OF HEALTH & HUMAN SERVICES, Centers for Medicare & Medicaid Services, Center for Medicaid and State Operations/Survey and Certification Group (2008). Requirements for provider-based off-campus emergency departments and hospitals that specialize in the provision of emergency services(S&C-08-08). Retrieved from website: http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/downloads/SCletter08-08.pdf