Out-patient centers surge forward in the fight to reduce elective costs.

Hospitals, already losing revenue to home health care agencies, will keep losing non-critical surgery business because outpatient or ambulatory surgical centers can provide the same procedures for up to 50 percent less than hospitals, according to data compiled by SMG Marketing Group Inc.

Doctors who perform elective surgery such as cosmetic, arthroscopic, gall-bladder and urological procedures, increasingly do so in ambulatory surgical centers, said health care experts.

These centers have operating rooms, labs and much of the equipment that hospitals have, but since they generally are built by a group of doctors that specialize in one type of elective surgery, they don't have the expensive emergency rooms and don't have to buy equipment for procedures they don't perform.

In many cases, they are owned by the doctors who practice in them. By comparison, hospitals buy equipment to treat all types of conditions and have to charge more money for their rooms and more money for procedures.

"There is a push from the payers (insurance companies) to have elective surgeries performed outside the hospital," said Robert Holt, spokesman for the Los Angeles Medical Association. "Unlike most operations, insurers pay a small percentage if any of the bill for elective plastic surgery. Consequently, those who seek cosmetic surgery usually shop for quality and price."

Ambulatory surgical centers have fewer costs than hospitals. Most times, they don't treat emergency patients, they don't have to keep them overnight and they don't have to hike their fees for procedures to make up for treatments they aren't paid for, Holt said. In most cases, the patient goes home to recouperate after the anesthesia wears off and as such, doesn't have to pay the daily charge to stay in the hospital.

Since the out-patient surgery centers aren't treating emergency cases, they review the patients' ability to pay before the surgery is performed. And, since most times elective cosmetic surgery isn't covered by health insurance policies, the patient has a greater motivation to shop for price, said health care industry sources.

Data compiled by the Chicago-based SMG Marketing Group shows the percentage of total surgeries performed nationwide in outpatient surgery centers has grown steadily. In 1985, outpatient surgical procedures (at hospital-owned outpatient centers, surgery centers and doctors' offices) totaled 11.85 million or such centers performed 31.6 percent of the nation's 20.31 million surgeries. In 1991, 45 percent or 10.2 million of 22.8 million surgical procedures were performed on out an out patient basis, according to SMG.

"This procedure will continue to expand, as hospitals beef up their outpatient programs," according to the January 1992 SMG Market Letter, a newsletter that is sold to subscribers by the SMG.

By the end of 1992, SMG predicts 65 percent of all outpatient surgeries will be performed by hospital outpatient divisions, down from 72.1 percent in 1990. At the same time, surgery centers will increase from 16.3 percent in 1990 to 22 percent in 1992. Doctors will perform 13 percent of all outpatient surgeries in their offices in 1992, an increase from 11.6 percent in 1990, according to SMA data.

Ambulatory surgical centers in this state must meet California Medical Association guidelines to be certified. If they treat Medicare patients, they are inspected every year, said CMA spokeswoman Jill Singer.

Dr. Robert Kottler is betting the trend toward centers will continue. He has created The 36 North Bedford Surgicenter, a Beverly Hills facility that caters to elective cosmetic surgery patients.

"Ironically, insurance companies almost uniformly excluded outpatient surgery from their coverage for 10 years. They only recently have started changing their attitude," Dr. Kottler said.

Savings from getting cosmetic surgery outside of the hospital environment add up quickly, Kottler said. He claims an elective "nose job" would cost $10,000 at a hospital compared to $5,500 at an outpatient surgical center.

The surgeon would charge about $5,000 in each setting and the additional $500 would be the charge for use of the facility but, unlike the hospital which typically would charge $4,000 to $5,000 for the operating facility and an average of $1,500 per night for the bed, the surgical center releases the patient the same day, thus saving on the basic room charge.

California Medical Association's Holt agreed patients and insurance companies can realize savings like those described by Kottler.

At the same time, Long Beach-based Dr. James Wells, a plastic surgeon, issued some caveats about ambulatory surgical centers. He said 60 percent to 75 percent of the cosmetic and plastic surgery procedures can be handled in a clinical rather than a hospital setting. However, he said, the patient should examine the doctors who own and perform surgeries in the clinic.

"The advantage of getting cosmetic or plastic surgery in an ambulatory surgical center near or adjacent to a hospital is that you have access to all the doctors on (the hospital) staff. If you have complications during an operation, you are close to a large pool of medical talent and facilities," Wells said.

Patients in good health and not on medication or who take low doses of medication or have minor health problems, such as stabilized high-blood pressure, run little risk with elective surgery at ambulatory centers. On the other hand, patients who take heavy medication, have cardiac or asthmatic conditions or whose proper medication dosage still hasn't been determined should be cared for in a hospital or in an ambulatory surgical center next to a hospital, Wells said.

Before people decide to get treatment at an ambulatory surgical center, they should tour the facility, make sure it has monitoring systems for oxygen, blood pressure and heart rate plus resuscitation equipment, Wells said.

"California doesn't have an adequate review system for the ambulatory surgical centers," Wells said. "On the other hand, Medicare does. Facilities that are Medicare-certified are the Cadillacs of the outpatient surgical centers."