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Background: Freestanding emergency departments (FrEDs) could reduce wait times in overcrowded emergency departments (EDs), but they might also increase usage and overall spending for emergency care. We investigate the relationship between the number of FrEDs entering a local market and overall spending on emergency care. Methods: We accessed data from Arizona, Florida, North Carolina, and Texas in Blue Cross Blue Shield Axis; a limited data set of deidentified insurance data claims that we linked to Public Use Microdata Area (PUMA) data from the American Community Survey; and lists of licensed FrEDs from state agencies. Regression analysis was used to estimate the association between changes in the number of FrEDs in 495 PUMAs and total spending on emergency care, out‐of‐pocket spending, utilization, and price per visit from January 2013 to December 2017. Final estimates came from a PUMA‐level fixed‐effects model, with controls for state, quarter, and PUMA‐level demographics. Results: Entry of an additional FrED in a PUMA was associated with a 3.6 percentage point (pp; CI = 2.4 to 4.9) increase in emergency provider reimbursement per insured beneficiary in Texas, Florida, and North Carolina. There was no change in spending (2.5 pp; CI = −8.2 to 3.1) associated with a FrED's entry in Arizona. Entry of an additional FrED was associated with a 0.18 (CI = 0.12 to 0.23) increase in the number of emergency care visits per 100 enrollees in Texas, Florida, and Arizona. In contrast, entry of another FrED was not associated with a change in utilization (−0.03; CI =  −0.09 to 0.02) in North Carolina. Estimated out‐of‐pocket payments for emergency care increased 3.6 pp (CI = 2.5 to 4.8) with the entry of a FrED in Texas, Florida, and Arizona, but declined by 15.3 pp (CI = −26.8 to −3.7) in North Carolina. Conclusions: Rather than functioning as substitutes for hospital‐based EDs, FrEDs have increased local market spending on emergency care in three of four states' markets where they have entered. State policy makers and researchers should carefully track spending and utilization of emergency care as FrEDs disseminate to better understand their potential health benefits and cost implications for patients. [ABSTRACT FROM AUTHOR]

Objectives: Ever since the passage of the Texas Freestanding Emergency Medical Care Facility Licensing Act in 2009, freestanding Emergency Departments (FrEDs) have spread throughout Texas. This study aims to determine whether the entry of FrEDs has been associated with less congestion in hospital-based EDs., Methods: The dependent variables of interest were hospital-based ED annual visit volume, median wait time, length of visit for discharged patients and the percent of patients who left without being seen (LWBS). The explanatory variables of interest were the numbers of FrEDs within the same local market of each hospital-based ED, and an indicator variable for whether the hospital owned satellite FrEDs in outlying areas., Results: Hospital ED visits, wait times, length of visit for discharged patients, and LWBS rates were not associated with the number of competitor FrEDs in the local market. Hospitals that opened satellite FrEDs had significantly higher visit volume in general, but did not experience shorter wait times, length of visit or LWBS rates if located in large metropolitan areas., Conclusions: The entry of FrEDs did not help relieve congestion in nearby hospitals in major metropolitan areas in Texas. By offering more treatment options to patients, FrEDs are associated with increased usage of emergency services., Competing Interests: Declaration of Competing Interest YX reports no conflict of interest. VH reports that she is a volunteer member of the Board at Community Health Choice., (Copyright © 2019 The Authors. Published by Elsevier Inc. All rights reserved.)