Alaska Regional Hospital’s proposal to build an $18 million free-standing emergency department in South Anchorage by the end of next year is drawing backlash from a group of emergency room physicians at one of the city’s other major hospitals, who worry the presence of such a facility could drive up health care costs and result in delayed critical care for some patients.

Earlier this year, Alaska Regional submitted an application of need to the state to build a nearly 11,000-square-foot “satellite” facility, which would include 12 emergency rooms and equipment such as a CT scanner, ultrasound machine, X-ray machines and five cardiac monitoring stations.

The main difference between the proposed project and a regular emergency room is that the facility won’t be physically connected to a hospital, where ER patients are often transferred to receive more intensive care, including surgeries.

Some emergency department physicians affiliated with Alaska Emergency Medical Associates at Providence Alaska Medical Center are concerned that the proposed facility, if approved, will be able to charge emergency department prices even though it won’t be equipped to treat all emergencies.

Alaska Regional leadership say the project is meant to increase health care access in a part of the city lacking in emergency care — Anchorage’s hospitals are concentrated in the University-Medical District corridor — while also reducing crowding at the hospital-based ER.

“We’re way outstripping the resources that we have available right now,” Rob Stantus, Alaska Regional’s chief operating officer, said in a recent interview. Stantus said that Regional saw more emergency patients last year than they ever had before.

“So that is exactly why we’re proposing an expansion. We’re not looking to increase emergency visits in Anchorage. We’re looking to redistribute where those ED visits occur,” he said.

Precious minutes

In the past decade, hundreds of free-standing emergency departments have cropped up across the Lower 48, prompting research into whether they improve patient health outcomes, cut down on ER wait times and relieve burdens on overcrowded emergency departments.

Much of that research shows the opposite, said Dr. Helen Adams, a Providence Alaska emergency medicine physician. A 2015 study by the Institute of Social and Economic Research at the University of Alaska Anchorage found that they can potentially increase health care costs, in part because of their higher rates for care compared to doctors’ offices or urgent-care clinics.

In Anchorage, not all emergency patients would or could benefit from such a facility, Adams said. A patient experiencing a heart attack, for example, would need to be transported from the free-standing emergency department by ambulance to a facility with a cardiac catheterization laboratory, she said.

“Although there will be board-certified doctors there, they can identify the condition, but they can’t treat it. And then the patient has to be sent to a different hospital, delaying their emergent care, at a time when minutes count,” she said.

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Heart attack patients “are irretrievably losing heart muscle with every second that they’re not getting oxygen and their heart remains blocked,” said Dr. Danny Mindlin, an emergency room physician at Providence Alaska Medical Center who emphasized that every minute matters.

When asked about the concerns about delayed care, Alaska Regional’s emergency department medical director, Dr. David Scordino, said in an interview that he thinks the ambulance transfer from the facility to the main Alaska Regional Hospital would be quick and seamless.

“By the time a nurse says, ‘Wow, that person needs surgery,’ the (operating room) is getting ready, and they will go straight from the ambulance right into the main building,” he said.

“We’re talking about a facility that’s only 10 to 15 minutes away,” he added.

The second time around

It’s not the first time Alaska Regional has proposed building a free-standing emergency department.

In 2015, Regional proposed building two such facilities, in South Anchorage and Eagle River, for more than $25 million. Providence Alaska Medical Center submitted a competing bid to add beds to their existing emergency department.

The state at the time decided that at least 13 additional emergency rooms were needed in the Anchorage area, and approved the 13-room expansion at Providence’s campus in Anchorage. It denied the proposals by Alaska Regional, citing concerns about increased health care costs, and noting that free-standing hospitals are not able to treat all emergencies.

“I agree with concerns about introducing freestanding emergency departments in the Alaska health care system,” then-health commissioner Valerie Davidson wrote in the final decision. “Such concerns include freestanding emergency departments being expensive settings for care that are inefficient due their inability to provide trauma care and other critical emergency services.”

Dr. Tim Silbaugh, an emergency department physician at Providence Alaska Medical Center, was one of dozens of doctors to oppose Alaska Regional’s 2015 proposal.

He said recently that he’s against the latest proposal too, for the same reasons he was then: the risk of delayed patient care, and the likelihood that patients would end up paying substantially more for care than they would at an urgent care clinic.

The Providence doctors and Alaska Regional executives acknowledged in interviews that each have a financial stake in the proposal, either a loss or a gain.

“There’s clearly a siphoning of money away from the (Providence ER),” Silbaugh said. “That is a financial incentive. But that said, we’re a busy, high-functioning ER. And that’s not why we’re primarily worried.”

“It definitely is competitive opposition, is how I feel,” said Jennifer Opsut, Alaska Regional’s CEO.

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A loophole

The increased cost is largely due to what Silbaugh calls a “legal loophole” that allows free-standing emergency departments to charge the same facility fee that hospital-based emergency rooms charge but urgent care clinics don’t.

A facility fee is meant to cover the cost of the on-site hospital facility that emergency rooms are attached to, Silbaugh said, like a blood bank, on-call surgeons, operating suites and an intensive care unit.

“In short, all services that a free-standing emergency department does not have,” he said.

In the Lower 48, that loophole has allowed free-standing emergency departments to rake in significant profits. They’re often placed in wealthy ZIP codes where operators can count on patients with private insurance to cover costs.

Patients are often saddled with unexpectedly high medical bills for care that could have been received for much less at an urgent care clinic, Silbaugh said.

Stantus, the Alaska Regional COO, said the South Anchorage location was chosen because there’s a lack of care on that side of town, not because patients are wealthier.

“Anchorage has grown over the years, and people have spread out, and where people are living has changed,” he said. “It makes sense to us to to put emergency beds closer to where the people are at.”

He also said that patients wouldn’t be charged more for services than they would at a normal emergency department.

Alaska Regional’s application is still in process, and Alaskans have until 4:30 p.m. Aug. 1 to provide comment in writing by emailing Alexandria Hicks, the department’s certificate of need program coordinator, at alexandria.hicks@alaska.gov.

A decision from Heidi Hedberg, Alaska’s health commissioner, is expected by the end of September.