Region?s hospitals, docs find common ground

While physicians and hospitals across the state fight over the increasing number of physician-owned surgical centers, doctors and hospitals in Northern Colorado are working together to develop surgical centers, which typically are able to offer outpatient services at a lower cost than hospitals.
Skyline Center for Health opened last December in east Loveland as a joint venture between physicians and McKee Medical Center. The 79,000-square-foot medical complex includes an ambulatory surgical center, physician office space, urgent care and other services.
Poudre Valley Health System is looking at joint ventures with physicians at the new Medical Center of the Rockies, under construction at the junction of U.S. Highway 34 and Interstate 25, said Kevin Unger, vice president of operations for Poudre Valley Health System.
Poudre Valley and physicians are also partners in Harmony Campus, a medical complex with a surgical center in Fort Collins.
Some have taken notice of the doctor-hospital partnerships in Northern Colorado. Last week, Unger spoke to administrators at a hospital in Idaho about Poudre Valley?s partnerships with physicians.
?We have been ahead of the curve compared to other communities,? Unger said.
Nationally and statewide, there?s a growing debate about physician-owned surgical centers and specialty hospitals.
Last year, Congress passed a bill that put an 18-month construction moratorium on physician-owned specialty hospitals. The American Hospital Association contends such specialty hospitals, which include cardiac care and orthopedic hospitals, drain away profitable services such as open-heart surgeries and leave regular hospitals with less lucrative procedures and expensive emergency rooms to operate.
Physicians invest in both surgical centers and specialty hospitals as a source of income. They also like the idea of having more control over scheduling surgeries.
?Some physicians made more money 10 years ago than they are making now,? said John Weiss, chief executive officer of Big Thompson Medical Group, a partnership of primary-care physicians invested in Skyline Center for Health. ?With higher expenses and lower reimbursements, it?s harder for doctors to make a living in just their clinics anymore.?
Federal regulations mandate that only surgeons, not primary-care physician groups such as Big Thompson Medical Group, can invest in surgical centers. Big Thompson Medical Group is a partner in every aspect of Skyline except its surgical center.
Some hospitals, including some of the largest hospital chains in the United States, are concerned about physician-owned surgical centers in large part because they have taken business away from hospitals.
Outpatient services at Durango?s Mercy Medical Center dropped 25 percent after Animas Surgical Center, owned by a group of physicians, opened in 2000.
North Suburban Medical Center in Thornton reported a 35 percent decline in outpatient profits and a 10 percent decrease in inpatient profits after four doctors formed a surgical clinic nearby.
Last year, the Colorado Senate killed two bills related to doctor-owned surgical centers and specialty hospitals. One would have stopped physicians from treating patients at specialty hospitals in which they have an ownership share. The other would have kept outpatient surgery centers from admitting patients for procedures requiring more than a 23-hour stay.
In mid February the Senate killed another bill backed by the Colorado Ambulatory Surgery Center Association, an organization that represents physicians. The bill would have prevented hospitals from denying clinical privileges to doctors on the basis of their financial investment or involvement in a competing facility.
The Colorado Health and Hospital Association, a trade organization that represents hospitals across the state, and Colorado hospitals including Poudre Valley Health System, opposed the bill.
?The real issue for us wasn?t the competition,? said Jerry Wall, president of the Colorado Health and Hospital Association. ?It was the principle of having the legislature involved in the credentialing process. It?s not something the legislature needs to be involved in.?
In killing all three bills, the state legislature sent a message to doctors and hospitals, said Scott Wasserman, lobbyist and director of government relations for the Colorado Ambulatory Surgery Center Association.
?The legislators were saying, ?We don?t want to arbitrate between you guys,? ? Wasserman said. ?They don?t want to pass legislation that would hurt either the hospitals or the physicians.? ?
In Northern Colorado, some say joint ventures eliminate potential tension between doctors and hospitals. Of the 78 ambulatory surgery centers in Colorado, about half of them are joint ventures between hospitals and physicians, Wall said.
The four physician groups involved in Skyline ? Big Thompson Medical Group, Orthopaedic Center of the Rockies, Loveland Surgical Associates and Loveland Radiology Consultants ? approached McKee Medical Center about working together on Skyline, said Kathy Harris, interim chief executive officer at McKee.
McKee is the minority owner in the five limited liability companies that make up Skyline, Harris said.
?The health care environment is clearly changing,? she said. ?Physicians are able to invest in property, and as a hospital, we want to be part of these medical ventures. It?s better to be in business than to be cut out of it.?
Rulon Stacey, chief executive officer of Poudre Valley Health System, came to the company eight years ago with the intention of creating partnerships with area physicians, Unger said.
?He knew we would grow a much larger pie working with physicians than with each of us doing our own thing,? Unger said.
The first joint venture came when Poudre Valley invested in the Orthopaedic Center of the Rockies? surgical center about seven years ago. When it developed Harmony Campus, Poudre Valley sought out physician investors.
Not everyone sees partnerships as the answer, though.
?There?s the microcosmic perspective, where you see physicians and hospitals open to working together,? Wasserman said. ?Then there?s the macrocosmic perspective, where you have to ask, ?What will be the result of hospitals buying into all these surgery centers?? You get closer and closer to these little hospital monopolies.?
Wasserman said he expects physicians and hospitals to declare a truce in the state Legislature for now. Some doctors expect to see the issue come up again, which could affect joint ventures such as Skyline.
If the hospitals come out ahead, they could buy out the surgeons invested in surgical centers. That might drive the surgeons out to practice in other states, said Ted Norman, a doctor of internal medicine and president of Big Thompson Medical Group.
?The issue keeps coming up at the state level,? Norman said. ?It has the makings of a very nasty battle between doctors and hospitals.?

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