Surgery Without The Hospital? Regulators Approve For-Profit Surgical Center In Colchester

Jul 11, 2017

State regulators have approved construction of what would be Vermont’s first independent surgical center, despite protests from nonprofit hospitals who say the venture will siphon needed revenue away from their operating rooms.

For Vermonters hoping to schedule a colonoscopy, fix a torn ACL or get some other low-risk surgery, the local hospital is the only option right now. That could change soon though. And many consumers are cheering the decision.

When Melinda Moulton heard that state regulators had signed off on construction of the Green Mountain Surgery Center, in Colchester, she was, in her words, “pumped.”

“Yeah, I was really excited about it,” Moulton says.

Moulton says she and some of her employees and her friends have all had to wait longer than they’d like to get routine surgeries at University of Vermont Medical Center.

Much as she appreciates her local hospital, Moulton says another player in the health care industry might be just what the doctor ordered.

“When things get highly monopolized by one organization, or even two or three, then there’s a level of control,” Moulton says. “And I think it’s important to have competition.”

"And so you pull that revenue out of the hospital system and it weakens the hospital's ability to care for its community in many ways." — Jonathan Billings, Northwestern Medical Center

Better yet, Moulton says, investors behind the new, for-profit, venture are promising lower prices for comparable procedures. And she says that’s one of the reasons she lent her formal support to the proposal.

“Why would you not want this?” Moulton says.

Jeff Tiemen, president of the Vermont Association of Hospitals and Health Systems, has a ready answer.

“Ultimately, our contention is that the surgery center, by adding unnecessary capacity to the system, can over time increase costs to the system,” Tiemen says.

Tiemen’s trade association, which represents all 14 hospitals in Vermont, has been pushing state regulators to reject the proposed surgery center. He says the Green Mountain Surgery Center, as it will be called, will likely follow the same business model employed by comparable outfits across the country.

“Take the most profitable surgeries away from the local hospital. And those are surgeries and procedures that the hospital uses to cross-subsidize or help pay for less profitable parts of the hospital,” Tiemen says.

Jonathan Billings is vice-president of planning at the Northwestern Medical Center in St. Albans, one of the hospitals, along with UVM Medical Center, that will be competing with the new venture. 

“And so you pull that revenue out of the hospital system and it weakens the hospital’s ability to care for its community in many ways,” Billings says.

Billings says the procedures the new surgical center will specialize in are the same ones that Northwestern relies on to pay the bills. And just because there’s another game in town that might reduce utilization at Northwestern, Billings says the hospital can’t downsize accordingly.

"I think that those accusations are way to raise fear, to get people concerned about moving in a new direction, and to protect the status quo, which ultimately has not been serving to provide affordable health care services." — Amy Cooper, Green Mountain Surgery Center

“Because the ambulatory surgery center is not taking emergent cases in the middle of the night, and our teams need to be there. And the way we keep our teams there is through revenues through surgeries that we do during the day,” Billings says.

Amy Cooper is one of the nine investors behind the new surgical center, seven of whom are local doctors who want another venue to perform surgeries. She says hospitals opposition is unfounded.

“I think that those accusations are way to raise fear, to get people concerned about moving in a new direction, and to protect the status quo, which ultimately has not been serving to provide affordable health care services,” Cooper says.

The proposed 13,000 square-foot facility will cost more than $11 million to build, and have two operating rooms, four “procedure rooms,” and 14 beds. Cooper says it could open as soon as fall of 2018. And it’s being built with room to expand in the future.

Regulators at the Green Mountain Care Board, the five-person panel that oversees the health care industry in Vermont, say the center can only open if it agrees to treat patients covered by Medicaid, and patients with no insurance at all. They say the center will also have to participate in Vermont’s new health care reform efforts.

Cooper says the company behind the project, called ACTD, LLC, is happy to abide by those conditions. She says it’s provide services that consumers have been clamoring for.

“There are sometimes very long wait times for needed procedures and wait times for needed procedures and consults at the one provider in Burlington of these sorts of procedures. So we also thought there was an opportunity to reduce those wait times and have patients seen on a more reasonable time schedule,” Cooper says.

Michael Carrese, director of media relations at UVM Medical Center, says the operating rooms there still have plenty of capacity.

“We are currently at 78 percent capacity in the operating rooms at the main hospital and 62 percent at the Fanny Allen campus,” Carrese says. “Two of the ORs at the Fanny Allen have cut back hours due to lack of demand. If there is more demand for OR time, we can simply extend the hours the rooms are staffed, but there has been no need to do that.”

Carrese also says there’s no indication that the independent physicians who utilize the operating rooms — the same kind of physicians who would be performing procedures at the Green Mountain Surgery Center — have had any trouble scheduling surgeries for patients.

“Independent physicians have a decision-making role in determining OR scheduling and there have been no complaints in years from any independent surgeons about OR access,” Carrese says.

Hospitals have 30 days to appeal the decision by the five-person Green Mountain Care Board, which regulates the health care industry in Vermont.

Tiemen says the Vermont Association of Hospitals and Health Systems is happy with some of the conditions regulators have imposed, and that the association is still contemplating its options.