The Economic Value of Freestanding Emergency Centers

By Rob Morris 

Complete Care

The Economic Value of Freestanding Emergency Centers

By Rob Morris, CEO, Complete Care


When you think about an emergency room, you most likely don’t think about the jobs created and the economic value brought to a city or county. But that’s exactly what freestanding emergency providers bring to the areas they serve. In Texas, home to more Freestanding Emergency Centers (FECs) than anywhere else in the country, these facilities directly employ thousands of Texans and indirectly support the employment of many thousands more.

In order to provide care to patients in need, FECs are required to obtain the same licenses as large hospital-based emergency departments and pay non-refundable licensing fees. The fee for an initial license is $7,410 and must be renewed annually, at a cost of $3,035. Since 2009, this has generated over three million dollars in revenue for the State of Texas.

In addition to licensing fees, FECs have contributed more than $40 million in annual taxes paid to city, state, and federal coffers. The more than 10,000 jobs they make possible bring growth and immeasurable value to communities.

Just like hospital-based emergency departments, FECs are legally required to administer medical screenings and stabilize all patients at their facilities, regardless of insurance status or the ability to pay. Also just like hospitals, FECs provide millions of dollars in uncompensated care. While hospital-based emergency departments are reimbursed by major health insurance plans, they are also recognized by federal payers—Medicare, Medicaid, and TRICARE. FECs are not currently entitled to this benefit, making it less desirable for patients insured by federal payers to seek more timely access to emergency care at an FEC, even if it’s the best option for their health and well-being.  

Not being recognized by federal payers also makes it difficult to develop additional FECs in more rural and underserved areas, where high numbers of Medicare and Medicaid beneficiaries reside. Access to emergency care is needed now more than ever in these communities. With numerous rural hospital closings over the past several years, 25 Texas counties face a substantial access-to-care gap, where not a single access point to medical care exists. The lack of life-saving emergency care and quick medical attention puts tens of thousands of Texans at risk every day.   

When considering the main drivers of cost in healthcare, deciding to hospitalize someone is the most expensive healthcare decision in our country. The average cost is $34,826 per patient. According to the American Journal of Emergency Medicine, hospital admissions coming through the emergency department represented over 80 percent of unscheduled hospital admissions. Admissions from the emergency department also account for 8.3 percent of national health expenditures.

Independently operated FECs, with no hospital affiliation, appear to be more effective at keeping patients out of the hospital. By coordinating follow up care and managing the patient condition on an outpatient basis, they are able to avoid costly admissions. Some might argue that hospital-based emergency departments admit more patients because they see more complicated cases. Yet research paints a different picture.

A recent study showed approximately 95 percent of FEC patients were diagnosed with moderate-to-high severity conditions, compared to 90 percent for hospital-based ER visits from Medicare patients. Despite treating similar acuity patients, FECs were 20 percent less likely to admit for conditions such as chest pain, COPD, and asthma. This saves the patient and his or her health insurance company a substantial amount of money.

FECs create jobs, generate revenue for the state, and make it easier for Texans to get the care they need. They are a potential solution to access challenges in rural Texas where hospitals have closed and emergency care is unavailable. FECs ease the load of over-crowded emergency departments across the state, including right here in Central Texas. These facilities provide reliable services in a cost-effective manner.

Freestanding Emergency Centers are good business—they are great for patients and a tremendous benefit to the communities they serve.

[1] Variation in Hospital Admission Rates Between a Tertiary Care and Two Freestanding Emergency Departments, Erin L. Simon, DO; Cedric Dark, MD, MPH; Mich Kovacs, BS; Sunita Shakya, MPH; Craig A. Meek, MD, MS