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Lewisville-based ER operator goes public

Adeptus Health, the Lewisville-based operator of First Choice emergency rooms with 15 free-standing facilities in North Texas, began trading today on the New York Stock Exchange after being priced at $22 a share, at the top end of its estimated range. The company sold 4.9 million shares (ticker: ADPT), which opened at $25 and were trading at $25.70 in early morning. The company has been growing rapidly, with 37 ERs in Texas and Colorado and plans to operate 53 by year's end, according to its regulatory filings. Last year Adeptus reported a $3 million loss on $115 million in revenue.

CEO Tom Hall, who rang the opening bell on the NYSE Wednesday morning, told us in a telephone interview that the company fills a need in markets where "emergency rooms are just overrun with patients, the waiting times are so long." He said the average wait time at a First Choice ER is four minutes and draws especially high marks from patients.

The company's model is not without critics, who maintain that too often patients who could have been treated at an urgent care center or other lower-intensity facility instead incur the higher costs of an ER. As a 24/7 facility, First Choice ERs and similar facilities generally receive for higher reimbursements from insurers. According to a 2012 report by the Urgent Care Association of America, freestanding ERs averaged between 35 and 40 patients a day, compared to 100-150 at hospital-based ERs, and realized about triple the net revenue per patient compared to an urgent care center.

Hall said First Choice treats appropriate patients and has an agreement with Concentra, an urgent care chain owned by Humana, the big health insurer, to refer patients who don't need the level of service offered by an ER. First Choice also last year signed an agreement with the HCA hospital chain to refer patients needing hospitalization to HCA facilities. About 3-5 percent of patients seen by First Choice ERs require hospitalization, he said. Freestanding ERs are a trend. HCA, Texas Health Resources and Baylor Scott & White, the largest hospital networks in North Texas, all have built stand-alone ERs, typically in growing suburban areas that might not yet require a full-service hospital.

-- Jim Fuquay 



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