NY and NC Hospitals See Same-Day Surgery Centers as Threat

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Hospitals and health systems in two different states are worried about a similar trend that could affect the business side of the care they provide.

In late February, The New York Post’s Carl Campanile reported, “New York City’s financially strapped hospitals are worried they could be put out of business by a new threat: rival ‘same-day’ surgery centers that are popping up across the five boroughs.”

These hospitals worry that same-day surgery centers could diminish their effectiveness. However, Stephen Berger, a member of Gov. Andrew Cuomo’s Medicaid Redesign Team, said, “The future of healthcare comes in different forms and different shapes, and ambulatory-care surgery centers are part of that change. The big-box hospitals will continue to shrink.”

These surgery centers carry with them a chief benefit in the era of healthcare reform: their operational costs are low. Furthermore, most of the centers are independently owned and operated.

Campanile writes, “Brooklyn’s 17 hospitals have a combined debt of $1.2 billion and many lack the resources to invest in their own leaner and more efficient same-day surgery centers.” With many of these hospitals losing money annually and with one system having to close a facility, state officials are hesitant to block licensing of same-day surgery centers, especially in an area they classify as “medically underserved.”

Meanwhile, yesterday, in North Carolina, the Charlotte Observer’s Ames Alexander reported, “Hospitals could face significantly more competition for routine surgeries under a bill that proponents say could save N.C. patients and taxpayers hundreds of millions of dollars. N.C. House Bill 177, sponsored by three Republicans, would make it easier for physicians to open same-day surgery centers, offices that typically charge far less than hospitals for outpatient procedures.”

Not surprisingly, the bill has stirred up opposition from North Carolina hospitals who oppose it for many of the same reasons New York hospitals are opposing these centers in their region. Alexander writes, “The N.C. Hospital Association contends the bill would benefit a few doctors at the expense of hospitals, but would not cut costs or save state money.”

However, those who support the bill believe healthcare competition isn’t strong enough in North Carolina and as a result, hospitals have been free to inflate the prices on even the most routine surgeries. Patients need more options, they contend.

Alexander continues, “A 2012 investigation by the Observer and the News and Observer of Raleigh found that hospitals and hospital-owned clinics tend to charge considerably more than independent doctor’s offices for many common drugs and procedures.”

Spokesperson for the North Carolina Hospital Association Don Dalton said, “HB 177 is the wrong public policy. Carving out profitable services for private physicians is contrary to having all providers work together to lower cost by managing the health of populations. Duplicating existing services and fueling physician self-referral never cut costs.”

How do you as healthcare executives feel about these stories? Do you think that independent same-day surgery centers are catch on nationwide, especially as reform kicks in? Do you see benefits in having these centers around or do you oppose them wholesale like many of the N.Y. and N.C. hospitals?

-by Pete Fernbaugh

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