3 Ways Satellite Emergency Departments Promote Hospitals and Health Systems

By James Ellis and Aaron Razavi
09:02 AM

With uncompensated care, low Medicare and Medicaid reimbursements and incredibly large overhead costs, emergency departments (EDs) are one of the costliest sectors of a hospital. Likewise, the number of hospital based emergency departments decreased by 27% from 1989 to 2009 according to the American Medical Association. To cope with high costs and a demand for emergency services, hospitals are opening satellite EDs and they seem to be gaining in popularity.
Let me be clear when I say satellite ED. These are not to be confused with ambulatory surgery centers (ASCs) or urgent care centers. While similar services are performed in each facility, state rules and regulations deal with each differently. With a satellite ED signage requirements that specifically define the services offered, affiliation with a specific health system, enhanced emergency procedures, longer hours of operation and accreditation by a particular program like The Joint Commission on the Accreditation of Healthcare Organizations must be made.
The emergence of satellite EDs comes at a time when people are seeking emergency care more so than ever. According to the Centers for Disease Control and Prevention, emergency department visits increased 117 million from 2007 to 2008 and it shows no sign of slowing. Satellite EDs are a viable solution to increase revenue while providing convenient and quality care to people in rural settings as well as urban.
3 Ways Satellite EDs Promote Hospitals and Health Systems:
  1. Higher Reimbursement: As reported by the Centers for Medicaid and Medicare satellite EDs can receive anywhere from 25% to 100% higher reimbursement than standard outpatient clinics.  
  2. Increases Market Share: Allows the hospital to offset uncompensated ER visits and provides residents, especially in rural communities, emergency care access proximal to them, helping the hospital market its brand.
  3. Broadens Hospitals’ Portfolio: Offers increased access to care alleviating overcrowded hospital EDs, and differentiates the hospital or health system from competitors.                                            
As the AHA reported, from 2006-2009 satellite EDs grew 25% and with hospitals operating them in at least 16 states, I expect satellite EDs to continue to grow and we’ll continue to see how widespread their effects can be.