Texas Health Resources has entered into a joint venture with the First Choice Emergency Room chain that will add more than two dozen care sites to the nonprofit healthcare giant’s portfolio.
Lewisville-based Adeptus Health, the parent company of First Choice, will continue operating the facilities but will do so under the Texas Health name. THR will absorb 27 freestanding emergency rooms and an acute care hospital in Carrollton into its existing contracts, meaning these will become in-network providers for every major public and private payer operating in North Texas, including Medicare and Medicaid. First Choice previously only had contracts with Blue Cross Blue Shield of Texas, said Barclay Berdan, the CEO of Texas Health Resources. Too, federal government payers like Medicare and Medicaid do not reimburse emergency facilities that are not affiliated with a health system.
“We wanted to create more choice for patients, more choice in terms of locations where they can access us,” Berdan said. “We’ll have over 350 different care location across North Texas when we add in their facilities. And those will be locations and services that are aligned with (the patient’s) health plans and their benefit structure and integrated with a large system and the full continuum of services that we have.”
Berdan said Texas Health will have a “majority control” of the First Choice ERs. Financial details were not disclosed on Wednesday.
Adeptus Health is billed as the largest and oldest freestanding operating room company in the nation. It currently has locations in 22 North Texas cities, and is planning on opening new centers in Plano and DeSoto. Four more are planned to open in the region by year’s end, although Adeptus hasn’t said where. Its CEO, Thomas Hall, was traveling on Wednesday and not available for comment. They have full radiology suites , on-site laboratory services, and can stabilize patients suffering from ailments as severe as heart attack or stroke. Also included in the deal is a full service, 50-bed acute care hospital in Carrollton.
Berdan said he did not plan to institute any capital improvements to the facilities, nor does Texas Health anticipate replacing any employees, adding that he is “impressed” with the way the facilities are run. He plans to have the transition complete—including the new branding—by Jan. 1, 2017. Currently, Texas Health operates freestanding ERs of its own in Burleson and Willow Park and has a joint venture with one in Rockwall. “This really gives us a big jump in terms of locations that, obviously, beats opening them one at a time,” he said.
But the decision comes at a time of great public scrutiny on the standalone emergency rooms. They’ve proliferated furiously throughout Texas in recent years, going from about 20 in 2010 to more than 215 today. They’re sandwiched in shopping centers, tucked under apartment complexes, and packed into mixed-use developments. They’re mostly in well-to-do neighborhoods; a Texas Tribune analysis found that their locations align with household incomes that are an average of 49 percent higher than the state’s average.
Those that aren’t affiliated with a health system can often be out of network, which puts the onus on the patient—who may not always be clued into the expense, which can include a facilities fee of between $800 and $1,500 that goes toward paying to keep the doors open and fully staffed for 24 hours each day. The Methodist Health System has yet to make a strategic move into the sphere, arguing that they can acquire a better value proposition in other, more low-acuity locations. Texas Health’s Oak Cliff-based competitor has instead chosen to develop a strategy around urgent care centers, a much less expensive option for common conditions like strep throat.
Berdan doesn’t see it that way. With THR stepping in, most North Texans with private insurance will be able to receive care at the emergency centers by paying their deductible and co-pay since they’ll be in network. Too, Berdan says one of the appealing factors in pairing with Adeptus was their policy of post-evaluation. Federal law mandates that they examine anyone who seeks care, but if the condition is not an emergency, First Choice policy is to
refer suggest to patients that they can receive care in a more appropriate care setting, he said.
“I’ve spoken with a number of our employees during the course of our conversations with Adeptus who had used First Choice ERs. Every single one of them told me that was the process that happened,” Berdan said. “They can choose something else.”
And, yes, many of the locations are in markets that Texas Health doesn’t have such a strong hold on. But Berdan says the deal doesn’t mean that patients will only be admitted to Texas Health hospitals if that need arises. The locations have direct admittance processes in place, so if the patient needs to be taken to a full service hospital they can bypass the second location’s triage. But the fact remains: The patients who now visit any of the First Choice locations will be entering into the continuum of care offered by the health system that sees more North Texans than any other.
“We’ll do what’s right for the patient is what it amounts to, and if that means sending them to another facility that’s not part of our network, we will,” Berdan said. “But as we move into an era where we have more and more of a responsibility of managing populations of patients, we do want to keep folks in system so we have the full picture of what’s going on with the patient.”