Surgery?s a Cinch For ASC Doctors

Since January, three ambulatory surgery centers have opened in Northwest Arkansas, bringing the total number to 11.

The popularity of ASCs has increased dramatically over the past few years. They save money for the health care provider and patient because patients have surgery and are back home the same day.

Melinda Steinsiek, director of the North Hills Surgery Center in Fayetteville, said that over the past five years, the number of procedures performed at the center has jumped more than 265 percent, from 2,300 in 1999 to 8,400 in 2004.

Forrest Parks, director of surgery services for Mercy Health System Inc. of Rogers, said industry estimates indicate about 70 percent to 80 percent of surgeries will be performed on an outpatient basis in the near future.

Northwest Arkansas’ new surgery centers include Physicians’ Surgery Center in Fayetteville and Northwest Medical’s surgery centers in Springdale and Bentonville.

The Federated Ambulatory Surgery Association estimates there are more than 4,000 surgery centers nationwide performing more than 8 million procedures annually. There are 53 Medicare-certified ambulatory surgery centers in Arkansas.

FASA also reported that Medicare patients can have more than 2,500 different procedures performed in an ASC.

Medicare pays 30 percent to 35 percent less for a procedure performed at an ASC because overall costs to the provider are less, said Jeff Speaks, director of the ambulatory surgery facilities at Northwest Medical Centers in Benton and Washington counties.

Regular hospitals have emergency rooms, and surgery times are often changed as a result, Speaks said. ASCs stick more to a set schedule.

The Providers

The oldest of Northwest Arkansas’ ASCs is North Hills Surgery Center, which opened in 1998 in the North Hills Medical Park in Fayetteville.

North Hills is part of Washington Regional Medical Center, which is majority owner of the surgery center. Some of that center’s increase in business was due to more outpatient procedures being sent from the hospital to the surgery center, Steinsiek said.

Patient wait times prior to surgery are usually shorter at a surgery center, down to 1.5 hours vs. three hours at the hospital, Steinsiek said.

Advances in both medical technology and equipment have also added to the increase in volume.

Parks said the center performs an average of 150 to 155 surgeries per month, which amounts to about 1,800 annually.

He said they’ve seen a 20 percent growth in procedures year over year.

Procedures that require an endoscope have contributed significantly to that growth.

Both Steinsiek and Parks said pediatric procedures account for about one-third of business.

Northwest Medical Center ASCs in Benton and Washington counties combined average 500 procedures per month, said Speaks.

Ashley Bartlett, surgery scheduler for The Eye Center in Fayetteville, said much of the decision concerning where to schedule a patient for surgery depends on insurance. Bartlett said The Eye Center primarily uses North Hills Surgery Center. She said the patients like the set-up of being able to walk right in the door without going through a hospital.

Dr. Jon Berry, general surgeon with Fayetteville Surgical Associates P.A. in Fayetteville, said his firm uses North Hills Surgery Center because it is so close to the office. But it is also quick, he said.

He said Fayetteville Surgical’s client load is split evenly between inpatient and outpatient surgical procedures. Berry said North Hills proximity to Washington Regional Medical Center also makes it a convenient place to have surgery.

The amount of time it takes to prep an operating room for the next procedure is important to a surgeon, Berry said.

Basically, time is money.

Steinsiek said North Hills’ turnover time — the time between operations — runs between five and 10 minutes.

Speaks said Northwest’s turnover time is usually less than 15 minutes. Sometimes it takes less than five minutes to ready the room for the next operation, he said.

“If something doesn’t run on time, if you have patients in the office and you are stuck in the operating room at the hospital, you have to cancel the patients and reschedule them or they have to wait on you,” Berry said.

Canceling an appointment could mean a lost client. If that client needed surgery, the office loses the consult and the procedure, he said.

Dr. Lloyd Trichell, owner of Fayetteville Podiatry, said insurance determines most surgery schedules, but his clinic is using Physician’s Surgery Center in “increasing amounts,” because it meets his requirements of timeliness and patient satisfaction.

Physician Control

Physician’s Surgery Center differs from both Northwest and North Hills surgery centers because it is majority physician-owned, whereas the hospital-run surgery centers usually allow physicians to have some ownership but not the whole pie.

Physicans’ Surgery Center has averaged 250 cases per month since opening in January, said Russ Greene, director of the center. The center specializes in musculoskeletal procedures, which involve the spine and bones. He said most of the center’s 10 owners performed surgery primarily at Northwest Medical Center before the new venture.

Greene, who has opened more than 10 physician-owned ASCs nationwide, said the group has already had several “distributions,” or payments, to its owners since opening.

Greene said the June court decision allowing the implementation of the Arkansas Patient Protection Act, known as the “any willing provider” law, will also benefit the business.

The long-standing agreements between health care providers and payers could no longer determine a patient’s surgery preference, which raises the stakes for competition with independently run ASCs like Physicians’ Surgery Center.

“Any willing provider changes everything,” Speaks said.

Northwest Health has its own physician hospital organization or PHO insurance plan, PremierCare, which accounts for about one-third of the patient market, Greene said.

Washington Regional has an agreement with Arkansas Blue Cross and Blue Shield, a carrier that retains about 24 percent of the market.

“It’s like any change,” Speaks said of the any-willing-provider law. “Different insurance companies are maneuvening different things to protect business.”

Greene said the trend of all physician-owned surgery centers hasn’t really hit the local market yet, but “it’s coming.”

None of the ASCs interviewed would disclose revenue, but Greene did say the center’s margin was hovering around 28 percent.

Physician Partners Management Inc. of Little Rock, of which Greene is a partner, manages Physicians’ Surgery Center.

Greene said the popularity of physician-owned ASCs stems from wanting control.

“Back in the ’60s, when the physicians had control, things worked better,” Greene said. “Now, it’s either you are directed by a managed-care company or a hospital. You’ve lost control as a patient.”

One source, who requested anonymity, said that sometimes the demise of physician-owned groups comes in the form of working capital. The cash needed for technology investments and infrastructure improvements down the road causes the groups to fail.

None of the health care providers interviewed wanted to say much about physician-owned health care enterprises.

Speaks said Northwest takes the attitude of “that’s fine, but let’s do it together,” when working with surgeons. It has joint-ownership ventures with physicians at both ASC campuses.

“We compete where we can excel, that’s why we are a joint venture with our physicians,” Speaks said.

Speaks said Northwest Medical Center picked its specialty battles when it opened its surgery centers in Benton and Washington counties. For example, the eye surgery, or ophthalmology market, was saturated in Benton County, so Northwest only performs eye surgeries at its Springdale ASC.

Steinsiek said North Hills does get a healthy portion of surgery clients from Benton County.

Speaks did say there was some “out-migration” to Washington county from potential clientele in neighboring Benton County.

A lot of that is the newness of the less than 2-year-old Northwest Medical Center of Benton County, which many residents in their mind’s eye still refer to as “Bates Hospital,” he said.

Speaks said a new marketing plan geared toward educating surgeon’s offices about the different services Northwest ASCs offer, is being implemented.

“I think there is an economy of scale to have a multi-specialty center, than just to have six single-specialty centers,” Speaks said.

He said the best way to be competitive is through customer service.

“The best way to be competitive is by providing a high quality service that is patient focused,” Speaks said. “Because doctors have a choice and patients have a choice.”