Hospital may face challenge from new clinic

Hospital may face challenge from new clinic

Nov. 16, 2000

By Jim Mimiaga
Journal Staff Writer

A local physician has announced plans to open a private, same-day surgery clinic in Cortez and wants Southwest Memorial Hospital to become an investment partner.

Dr. Bill Rainer announced his intention to start a free-standing, outpatient surgery facility at his current private-practice location on Beech Street to the Southwest Health System board and Montezuma County Hospital District board chair Susan Keck earlier this month.

Because the new surgery facility would attract patients who otherwise might go to Southwest Memorial, Rainer has invited SHS to join him and other physicians as a limited partner by investing 5 to 10 percent into the venture, Keck said. The idea is that Southwest would then share some of the profits — assuming there are any — thereby offsetting a portion of revenues lost to the new clinic.

In an interview Rainer emphasized that he supports Southwest, and in fact needs the acute-care hospital in case of patient emergencies that require treatment beyond the capacity of his limited surgery clinic. Surgery clinics always emerge near full-size hospitals because they are not equipped or staffed to deal with major emergencies such as heart attacks, strokes, unexpected allergic reactions or major trauma.

But he said scaled-down, surgery-specific centers are needed to keep up with the health-care trend towards smaller, more efficient venues. The business will be fully accredited and licensed and be able to handle less-serious procedures without the high overhead costs suffered by full-service hospitals performing the same minor operations.

"If I don’t do it, somebody else for sure will, because this is what is happening industry-wide," Rainer said, adding that research shows free-standing surgery clinics have never put a hospital under.

A feasibility study on the clinic’s potential to attract patents and profits "came up sterling," he said.

Rainer expects to open the 1,500-square-foot surgical clinic by early next year. His private practice will continue and will be in the same building but separate from the new surgery clinic, which is expected to cost $500,000 to set up, he said. The center will have one operating room, pre- and post-op areas, and a staff of nurses.

Private doctors, screened beforehand, would be granted privileges to perform the services at the center with an emphasis on healthy patients at low risk for complications.

Typical procedures performed in these clinics are hernias, orthopedic surgery, arthroscopics such as colon or stomach scopes, breast biopsies and other minor general surgeries.

Rainer said insurance companies and government payers prefer the smaller surgery clinics because the bills they submit for reimbursement are less expensive than hospitals’. The greater efficiency created by focusing on certain procedures also means less hassle for patients, less paperwork and more privacy, he said.

SHS board President John Greenemeier said the board has not discussed Rainer’s offer yet. He described the potential profits from such a deal as more of a "token offer that would be an insignificant benefit to the hospital."

Southwest officials expect to lose some patients to any new surgical center separate from the hospital, but they point out they have the infrastructure, emergency back-up and determination to open their own same-day, or "fast-track" surgery center.

"It is something that we have been working on doing for a year, but we have been constrained by a lack of space and other challenges. We have been in the throes of the ER expansion until recently," said Greenemeier. "We realize that insurance companies want people in and out faster and were moving in that direction for less-serious procedures."

The two governing boards of Southwest are anxiously awaiting the outcome of lease negotiations with Vista Grande management that could result in a new nursing home being constructed on the hospital campus. That would free up space needed for Southwest to expand so they can dedicate more surgery suites to efficient outpatient care.

If all goes as planned, Greenemeier said the board expects Southwest’s same-day surgery center to be completed by late summer or early fall of next year.

Some 2,700 surgi-centers are open across the nation with more on the way.

Yet the majority of hospitals were built in the 1950s when longer patient stays and the resulting huge bills were considered normal. Today’s surviving hospitals must financially support nursing and surgeon staff around the clock, laboratories, a full-service pharmacy, radiology, ER and ambulance service, food service, laundry, administration and building maintenance. Surgical centers have the ability to concentrate on a smaller range of services, accruing fewer expenses.

"I think it was appropriate that Dr. Rainer offered us to join in the investment and share in the profits, because he didn’t necessarily have to do that," said Keck.

"I’m hoping they will be a part of it, because it will have an impact on them," Rainer said. "I’m offering an alternative and that competition is good for the community, some of which are, for whatever reason, going to Durango for care."

Mercy Medical Center publicist Joe Wade Plunk said the Durango hospital lost an estimated one-third of its outpatient-care customers since the opening of the private Animas Surgical Center last year.

"We eliminated some services because of that, like specialized eye care, in order to free up space that we will be using strictly for outpatient care in order to better compete," he said.