OUTPATIENT IS IN.

Byline: Tim Christie The Register-Guard

Surgeons and hospitals have long been locked in a mutually beneficial relationship.

Doctors bring hospitals business in the form of sick patients who need surgery. Hospitals give doctors a place to conduct their business by providing operating rooms, nurses and recovery areas.

But that relationship is undergoing a fundamental shift - here, and across the country. Doctors are building and operating their own outpatient surgical centers, providing convenience and amenities for patients, and more control and, potentially, income for themselves.

The trend has left hospital officials scrambling to figure out how to make up for the loss of revenues, which are "not insignificant," said Barbara Dember, PeaceHealth's regional vice president for clinical institutes for PeaceHealth, parent corporation of Sacred Heart Medical Center in Eugene and five other Northwest hospitals.

"It's in the millions," she said.

The clinics, often referred to as ambulatory surgery centers, have been around for years - at least 10 outpatient surgical centers are operating in Eugene and Springfield - but their numbers are now increasing rapidly.

Two separate neurosurgical groups in Eugene will be operating on patients at their own surgery centers by the end of the year.

By next year, the city's largest orthopedic group, which does about 35 percent of all surgeries at the local hospitals, will open a new medical office with four operating rooms for outpatient surgeries.

And the second largest medical practice in the metro area is looking seriously at building its own outpatient surgery center.

Nationally, the number of outpatient surgery centers has been rising steadily in recent years, as well as the number of outpatient surgeries. In 1997, there were 2,500 Medicare-approved ambulatory surgical centers operating in the United States. In 2004, the most recent year for which statistics are available, there were more than 4,000, according to the American Hospital Association.

Leaders of McKenzie-Willamette Medical Center declined to comment on this trend.

But Dember said that, while Sacred Heart will suffer "a financial hit" as more operations move to free-standing outpatient facilities, the hospital will adapt by refocusing on its core business, and work to improve the efficiency of its surgical operations.

"This is not the first time we've had to adjust to a major shift in the market," she said.

Imaging, for instance, used to be the exclusive province of hospitals, she said, but MRI and CT scanners have proliferated.

PeaceHealth has proposed a joint venture with different physician groups to operate an outpatient surgical center, but so far has struck no deals, she said.

Orthopedic Healthcare Northwest, the metro area's largest orthopedic group, decided against going into business with either hospital and instead is moving forward with plans to build a four-story, 80,000-square-foot medical office building that will have four operating rooms.

"They approached us fairly aggressively and regularly throughout our planning process, but we still felt we were better off to stay independent," said Dr. Thomas Wuest, the group's president.

The new clinic, set to open in August 2007, will provide a one-stop spot for patients needing orthopedic care, including imaging, physical therapy and surgery, Wuest said. The facility also benefits the 19 doctors in the practice, he said.

"We are able to collect the facility fee for surgical procedures as opposed to that going to another institution," he said.

Doctors basically break even when they treat patients covered by Medicare and Medicaid, so they need to generate enough income in other areas, such as imaging and surgery, to stay in business and independent, he said.

Oregon Medical Group, which employs just over 100 doctors in Eugene and Springfield, is "taking a hard look" at building an outpatient surgery center, said Peter Davidson, the group's CEO.

"It is a natural extension of health care in this day and age from a patient service standpoint and also from a cost standpoint," he said. Surgery centers "have a lower cost structure than do hospital operating rooms."

As with the orthopedic surgeons, Oregon Medical Group has been approached by the hospitals about a joint venture, Davidson said.

Two neurosurgical groups also have decided to build their own surgery centers.

Drs. Catherine Gallo, Christopher Miller and Kasia Van Pett opened the NeuroSpine Institute opened last month on Centennial Loop. The 24,000-square-foot office has two operating rooms set to open early this summer.

Gallo and Miller, longtime partners who had their office at the PeaceHealth-owned Physicians & Surgeons Building across from Sacred Heart, have been talking about opening their own clinic for years, Gallo said.

"It's more autonomy for us," she said. "It gives us a chance to control the practice environment."

That includes the medical - doctors can order images of their patients on MRI and CT scanners on site - to the aesthetic: the clinic features two courtyard Zen gardens, including one visible from one of the operating rooms, and spine-shaped light fixtures in the waiting areas.

Dr. Glenn Keiper plans to open the Spine and Brain Center of Eugene on July 1 with Dr. Andrea Halladay, also a neurosurgeon, and Dr. James Kassube, a rehabilitation specialist. The center also will offer physical therapy. Doctors will be doing outpatient surgery at the center by the end of the year.

"It's the way of the future," Keiper said. "It's more efficient and it's more convenient for the patients."

Both Gallo and Keiper said the advent of minimally invasive surgery, in which doctors can remove a troublesome disc or repair carpel tunnels through incisions less than an inch long, means more neurosurgery can be done on an outpatient basis.

The two neurosurgical surgery centers will mean a loss of business for the city's oldest multi-specialty surgery center, McKenzie Surgery Center on Country Club.

Doctors have been doing day surgeries at the center since 1996. The center, which has four operating rooms, is owned by HealthSouth, an Alabama-based health care corporation, and six local limited partners, said Administrator Lynn Stapes.

About 100 surgeons are credentialed to practice at McKenzie Surgery Center, with 40 to 50 doing surgeries there at least once a month, Stapes said.

In addition to neurosurgery, doctors do a wide range of surgeries including cosmetic, gynecological, oral, ear, nose and throat, pediatric dentistry and podiatry, Stapes said.

Doctors like it because it's more convenient and easier to schedule a surgery than at the hospitals, Stapes said. Patients like it because it's faster and less hassle than the hospital, she said.

The center also prides itself on customer service and the "wellness approach" it takes with patients, she said.

Patients can wait for surgery in a reclining chair instead of a gurney, and they walk into the OR, if they're able. Parents can stay with their children in the OR until they're put under.

"It gives them more control over their environment," Stapes said. "We have healthy patients - they walk into our lobby - and there's no reason for us to to take control of that patient until it's needed."

Dr. Steven Marks, medical director for Eugene health insurer PacificSource Health Plans, said doctor-run surgery centers are more efficient because they don't have to carry all the overhead that a hospital does, and that can save patients money. And they're better able to get patients in and out quickly.

But as more doctors do surgeries out of the hospital, it could mean that patients who require hospital care will pay more, he said.

"In the long run, the more of these bread and butter services that leave the hospital, the tougher it is for hospitals to spread their costs across a lot of different types of services," he said. "It gets more expensive for someone going to the ER or having other kinds of surgery that can't be done in outpatient surgery venues."

Hospital officials have other concerns, including regulations of surgery centers that are less stringent than those imposed on hospitals, said Ellen Pryga, policy director for the American Hospital Association.

"We have been concerned at the pace at which physicians are owning these entities, which gives them the ability to decide which patients go to their facility and which go to us," she said.

That tends to leave hospitals with the sickest patients and those with the least ability to pay, including Medicare and Medicaid patients, which are money losers, she said.

"We end up on the short end of the stick yet we have to provide the back up services in the community," such as 24-hour emergency care, she said.

CAPTION(S):

Doctors prep Maggie Miller for foot surgery at McKenzie Surgery Center, one of the oldest outpatient surgery clinics in Eugene. Kevin Clark / The Register-Guard Lynn Stapes, administrator with McKenzie Surgery Center, says advantages to outpatient surgery centers compared to hospitals include efficiency and convenience for patients.