Conversion of Rural Hospitals to Freestanding Emergency Centers

Lead researcher:
Project funded:
September 2020
Anticipated completion date:
August 2021

Since 2005, 176 rural hospitals have closed. Rural hospital closures jeopardize access to emergency services in the affected communities.

As communities react to and/or prepare for closures, providers and policymakers seek a viable alternative for emergency services provided in a rural hospital setting. A rural freestanding emergency center (RFEC) is one potential model for providing emergency services in areas where hospitals have closed. In 2015, legislation and policy proposals for potential RFEC models were introduced, including the Rural Emergency Hospital (The Rural Emergency Acute Care Hospital Act); the Community Outpatient Hospital (the Save Rural Hospitals Act); and Model 1: emergency department and Model 2: primary care clinic + ambulance (October 9, 2015, meeting of MedPAC).

To inform the current policy discussion around RFECs, the North Carolina Rural Health Research Program published a findings brief titled "Estimated Costs of Rural Freestanding Emergency Departments" in November 2015. A key finding of this brief was the annual total cost to operate a low-, medium-, and high-volume RFEC is estimated to be $5.5 million, $8.8 million, and $12.5 million, respectively. The average visit cost per patient declines with greater volume ($600, $370, and $347 for low-, medium-, and high-volume RFECs, respectively).

Since publication of the November 2015 findings brief, the Center has received feedback from MedPAC and other interested parties that an RFEC for smaller patient volumes than those in the previous study might be feasible if there were legislative changes and if local circumstances were amenable.

For example:

  1. If RFECs could staff at the levels stated in the current Conditions of Participation for Critical Access Hospitals, then fewer staff and lower costs would be possible.
  2. It may be possible to contract out some services to other hospitals or companies at lower cost.
  3. In many small communities, health care providers are accustomed to "wearing many hats" to leverage scarce resources and to retain local services. This type of staff sharing may lower cost and provide a viable way to staff very small RFECs.

The purpose of this project is to establish what is known about freestanding emergency centers and the implications for a rural community and to estimate the number and types of rural hospitals that would be eligible to convert to a RFEC based on minimum patient volume. It will be important for policymakers to understand the potential number and type of facilities that would convert to an RFEC as an option for maintaining access to health care in communities that could or have experienced a hospital closure.