Former CPH CEO offers insights on proposed surgical center

As a former CEO of Central Peninsula Hospital (2002-2006), I would like comment on the proposed for-profit ambulatory surgery center (ASC) in Kenai.


I strongly believe in competition and, generally, competition is good for the health care industry and the patients served. However, I think it is critically important to look at the broader picture and take into account the impact that a free standing ASC might have on the viability of CPH and the essential health care services the hospital provides to the community. National studies show that ASCs tend to concentrate on low-risk, high-profitability cases, leaving hospitals with higher-risk, lower-profitability cases and the responsibility to provide the full array of services their communities require, many of which result in significant losses for hospitals. The report of the Commission on Health Care Facilities in the 21st Century underscores that freestanding ASCs deprive hospitals of much-needed revenue and correspondingly undermine their ability to serve their communities. Some communities (e.g. the Greater New York Health Authority) have called for a moratorium on the establishment of new freestanding, non-hospital-sponsored ASCs because of their negative impact on hospitals and hospitals' ability to provide needed services to their communities.

During my tenure at CPH, I had the privilege of working with the Board of Directors, medical staff, community leaders and others to design a hospital expansion project to meet community needs for the next several decades. This expansion project was approved by the voters and resulted in a badly needed 74,500 square foot addition to the hospital that included, private inpatient rooms, a new Laboratory, Pharmacy, Cardiopulmonary and Sleep Center, Central Sterile Processing and others.

It's important to note that this expansion project focused heavily on the surgical needs of the community then and into the future. Based on projected community needs and input from our medical staff, this project included the addition of a state-of-art Surgery Department with the capacity for four operating rooms. To save money, only three ORs were initially completed, with the fourth "shelled in" for future development as demand for surgery grew. I understand the 4th operating room will be completed in May 2012. Based on planning estimates, completion of this additional OR should assure ample surgical capability for the next several decades. I predict the state Certificate of Need process will validate this capability as they review the proposed ASC application.

Don't be fooled into thinking that a for-profit entity has your best interests at heart and is a good thing for the community! The physician owners will profit by collecting not only the physician fee, but also the facility (hospital) fee. Services like surgery, imaging and others help subsidize costly services like the ER, Diabetes education and many more. Also, a robust hospital-based Surgery Service helps make it possible for the hospital to provide nearly $6M worth of uncompensated medical care to low income and indigent patients every year.

In evaluating the merits of free competition, I think that community members have not only the right but the responsibility to take into account the impact that a new freestanding ASC might have on the local hospital and the essential health care services the hospital provides to the community. I encourage elected officials, community leaders and others to oppose the proposed ASC and instead focus your efforts on developing the next level of services needed on the peninsula like a cancer center, cardiac services and others.


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