Daytona Beach News Journal: STANDALONE EMERGENCY ROOMS, Halifax, HCA battle for Deltona patients

7/11/2016

Published: Monday, July 11, 2016 at 4:20 p.m.
Last Modified: Monday, July 11, 2016 at 10:38 p.m.

DELTONA — Florida's boom in freestanding emergency rooms has arrived and what better place than Volusia County's largest city? Sprawling, populous and medically untapped, the city of Deltona has attracted two off-site emergency rooms that are expected to open within the next year.

Both will be the first such facilities constructed in Volusia by Halifax Health and Central Florida Regional Hospital, bordering Interstate 4 and State Road 472 — less than a mile away from each other.

In the race to get to market first, Halifax is currently the leader with plans to break ground later this month. Sanford-based Central Florida Regional remains entangled in planning and zoning issues with the city as it considers a 29-acre parcel just south of where Halifax intends to build.

The rapid development of freestanding emergency rooms represents yet another sea change in health care nationwide and Central Florida in particular. There are currently six off-site emergency facilities being developed by various hospitals and health systems.

Nine years ago Florida's freeze on building more standalone ERs was vetoed by Gov. Charlie Crist. Lawmakers were concerned at the time that the facilities might not be equipped to handle patients in a smaller setting or they would multiply too fast.

In the years since, they have found homes in many suburban communities like Deltona, which lacks an inpatient hospital but produced some 40,000 emergency department visits in the year ending in June 2014, according to Halifax. With about 90,000 residents in Deltona, the publicly-owned Halifax and for-profit Central Florida Regional see an opportunity to pull in more patient admissions and siphon market share away from any nearby competitors.

“It's not unusual. Hospitals are going into competition with one another for one basic reason: patients,” said Aaron Liberman, professor emeritus of health care administration at the University of Central Florida.

“They're trying to fill their beds, and the only way they can fill their beds is by increasing their exposure to possible admissions.”

Nationally, the average percentage of all admissions that come through emergency care facilities is somewhere between 16 and 25 percent of all admissions, Liberman said, “so between 1 in 6 and 1 in 4 patients that are admitted to the hospital will likely come through your emergency care facility.”

CLOSE COMPETITORS

In Deltona, Halifax is going up against the state's biggest player in freestanding ER development: Hospital Corporation of America, the for-profit chain that owns Central Florida Regional. Since 2003, when HCA opened its first facility in Destin, the Nashville-based company has mounted an aggressive push, opening about a dozen freestanding emergency rooms across the state.

Top administrators at Halifax are girding for stiff competition and possibly a longer profit horizon. Officials project Halifax's emergency room will see about 15,200 visits in the first year, growing by an average 16 percent for the next three years, according to a hospital analysis.

At worst, the facility will see around 30 percent fewer visits than expected, pushing its anticipated break-even point to six years instead of four.

Therefore Halifax officials believe the best opportunity will come to whoever opens first, even by one month, said Halifax spokesman John Guthrie.

“When the second one opens up, that's great because it provides competition, but it's going to be benchmarked against the first one,” Guthrie said. “That's why you want to be first.”

A spokesperson from Central Florida Regional did not respond to multiple interview requests, but Deltona city officials said they have not yet purchased land. A tract at the corner of Graves Avenue and State Road 472 is being considered.

“Physically, [they're] really close,” said Chris Bowley, Deltona's planning and development services director. “If the intersection is Howland and Graves, one is on the north side and one is proposed on the south side.”

A 'RELATIVELY NEW' CONCEPT

About a decade after a moratorium on freestanding emergency rooms expired, there are still looming concerns about whether consumers know how to use them appropriately.

State law requires each freestanding facility to be connected to an existing hospital, but a certificate of need, the state's way of regulating unneeded hospital construction, is not required to build one.

“What we've found is they are providing that care to patients who need to have emergency care,” said Beth Brunner, executive director of the Florida College of Emergency Physicians. “They seem to be functioning well, adding value to those communities where they are being built.”

In striving to create more capacity, health care providers turned to the concept as a quicker option than building a full-fledged hospital.

But the stand-alone structure can be confused with urgent care, which could leave unwitting consumers paying an unnecessarily higher cost for care, said Karen van Caulil, president and chief executive for the Florida Health Care Coalition, a membership group that represents employers who self-fund insurance.

Co-pays for emergency room visits are often the costliest option of care, then urgent care visits, while a primary care visit is the least expensive, she said.

“Some of the freestanding ER companies charge less than traditional ER's but are still more expensive than urgent care, van Caulil said in an email. “We may need to create a new level of care and payment structure in the insurance benefit design for freestanding ERs.”

Based in Orlando, the Florida Health Care Coalition plans to study the freestanding ER concept to “make sure that patients receive the right care at the right time in the right place,” she said.

The organization “is looking at the cost, quality/safety and access impact of freestanding ER's,” van Caulil said. “Because we are a membership organization of employers who are self-funded, we want to make sure that the employees and their family members (consumers) are using this relatively new site of care appropriately.”



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