Convenient access to emergency health care often comes with high—and hidden—costs

Freestanding emergency departments—emergency care facilities not physically attached to a hospital—have proliferated since their introduction in the 1970s. In Texas, they have become the destination of choice for nearly one in four patients seeking emergency care.

But convenience comes with a cost: insured patients who choose these facilities could end up paying 10 times more in out-of-pocket costs compared to the same treatment at urgent care centers.

Now, new research from the Texas A&M University School of Public Health finds patients also risk taking on medical debt for these services.

“There’s a big difference between urgent care clinics, which are better suited for minor illnesses and injuries, and freestanding emergency departments, which have the same capabilities as hospital emergency rooms,” said health policy expert and assistant professor Daniel Marthey, PhD.

Freestanding emergency departments, which are owned and operated by hospitals, independent physician groups or other entities, are open around the clock and are equipped to handle more serious medical emergencies—with prices that reflect this status.

“Another issue is that some freestanding emergency departments pass themselves off as alternatives to lower-cost urgent care clinics, and this puts patients at risk of medical bills that are not covered,” Marthey said.

In addition, many charge facility fees or use balance billing, where the patient is responsible for the difference between the amount the facility charges and what their health insurance company pays.

“This makes services more expensive and often leads to unanticipated and out-of-network bills and, potentially, medical debt,” Marthey said, adding that nearly 20 million adults in the United States have medical debt, which represents more than 60% of all debt in collections.

A new study by Marthey and Texas A&M School of Public Health colleagues Benjamin Ukert, PhD, and Elena Andreyeva, PhD, gives insight into the association between satellite freestanding emergency departments and medical debt.

“There was evidence that the growth of freestanding emergency departments is associated with net increases in health care spending and inefficient use of these services. But until now, we did not know about any association between these facilities and patients’ financial well-being,” Marthey said.

For their study, published in JAMA Network Open, the team used data from the Centers for Medicare & Medicaid Services to identify counties where short-term acute care hospitals opened freestanding emergency departments between Jan. 1, 2014, and Dec. 31, 2021. They then compared these with counties that did not experience an opening during that time. Of the 1,368 counties in the sample, 48 saw the opening of freestanding emergency departments during the study period.

Data on medical debt for each county came from the Urban Institute Credit Bureau Panel.

“In counties where satellite freestanding emergency departments were opened, median medical debt rose by $98, and the share of the population with medical debt rose two percentage points,” Marthey said.

He said that while Texas and the federal government have sought to rein in deceptive practices and unclear billing processes, more work remains.

“Our study highlights the need for policymakers and others to weigh the benefit of convenient access to outpatient emergency care with the potential burdens of higher medical debt,” he said.