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Bill to allow bigger surgery centers sparks battle

ATLANTA (MCT) -- Georgia hospitals and doctors are bracing for a tough fight over legislation that would allow physician groups to build multi-service outpatient surgery centers across the state.

Supporters say surgery centers offer patients more convenience and quality, lower-priced care at a time when paychecks are light and health care costs are surging.

Hospital officials, however, warn that larger surgery centers would threaten the financial stability of hospitals that are an economic backbone of and safety net for many communities -- especially in rural Georgia -- by siphoning away profitable paying patients.

The hospitals, they argue, would be left caring for uninsured and poor patients they lose money on, a burden outpatient surgery centers don't bear equally.

House Bill 279 would allow multi-specialty physician practices to circumvent the state's lengthy -- and expensive -- approval process to plan and develop new medical facilities. Currently in Georgia, single-specialty practices are exempt from what's called the certificate of need, or CON, process. The proposed law would make building outpatient surgery centers easier for many more doctors groups that offer a range of procedures.

Right now, an orthopedic practice can have a surgery center for knee repairs or similar services. Under the new proposal, a surgery center would be able to offer orthopedic, pediatric, gastrointestinal or other services in one location.

"Both sides have a good argument," said state Rep. Mike Cheokas, R-Americus, who isn't sure how he will vote on the bill.

Hospitals fiercely oppose loosening the state's CON rules, which were overhauled in 2008 after a heated, years-long battle between doctors and hospitals.

Allowing physicians groups that specialize in multiple fields to open surgery facilitIes puts already-struggling hospitals at a severe disadvantage, said Kevin Bloye, a spokesman for the Georgia Hospital Association.

"They need to be strong and financially viable," Bloye said. "Anything you do to weaken that infrastructure is not good for the patients."

Multi-specialty centers can essentially become private hospitals without having to care for the uninsured like public hospitals do, said state Rep. Mickey Channell, R-Greensboro, chairman of the tax-writing Ways and Means Committee.

Channell said the CON issue was resolved a few years ago, and "quite frankly, what we did just a couple of years ago is still adequate."

A spokesman for Gov. Nathan Deal said only that the governor is committed to the current system and will work with legislators on an as-needed basis.

Some lawmakers and health care providers say, however, that Georgia's CON process is outdated and no longer serves it's original intended purpose.

Nationwide, states started using CON laws in the 1960s to prevent overbuilding that could lead to health care price inflation.

That's because hospitals unable to fill all of its beds would be forced to charge more to meet overhead costs. Under CON, health care providers must prove to state officials there is a genuine need in a community for the services they propose to offer or the costly equipment they want to buy.

Critics of the arduous process say it's a way for hospitals to limit competition, protect market share and dominate certain medical services in a region.

Debate across the country has intensified in recent years as physician-owned, free-standing surgery centers are increasingly seen as a way to offer cheaper care.

"We've got to find savings in the health care system that also delivers quality care," said Donald Palmisano, CEO of the Medical Association of Georgia, which supports full repeal of CON laws. "Ambulatory surgery centers are one way to do that."

A number of states have done away with CON regulations over the years, though three dozen or so still have some form of them.

The process was established many years ago to entice medical providers to come into a community and have some sort of protection for that investment, said Rep. Wendell Willard, R-Sandy Springs. Georgia has grown beyond that point, he said.

"As a Republican, I believe in free enterprise and market tests and the idea of competition," said Willard, who supports the House bill.

He also supports a proposed Senate bill, SB 171, which would allow multi-specialty physician groups to buy single-specialty facilities without having to obtain a CON. Both bills are being considered by committees in their respective chambers.

For Dr. Harold Kent, a general surgeon in Brunswick, outpatient surgery centers are a cheaper option for many of his patients -- especially those without insurance.

The price tag for a type of gastric bypass procedure at a hospital would be $18,000; at a surgery center the cost would be closer to $11,000, said Kent, past president of the Georgia Society of the American College of Surgeons.

"Competition is good," he said. "It certainly makes me try to be better at what I do."

Hospital officials say labeling the health care industry as a "free market" is a gross misnomer.

For one thing, they say, federal law requires hospitals to treat anyone who walks through the emergency room doors whether or not they can pay. That cost isn't shared by outpatient surgery centers, though they are required by state law to provide a limited amount of charity care. Georgia hospitals provide an estimated $1.5 billion in free care to the poor each year, with the cost rising as the economy struggles.

Rural hospitals would be hit the hardest by the proposed legislation, said Julie Windom, vice president of government relations for the Georgia Alliance of Community Hospitals. Surgery centers would lure away both paying patients and medical staff, she said.

Rep. Pam Stephenson, D-Atlanta, who is on the House Health and Human Services Committee, said she has an open mind about making changes to the CON system and believes all requirements should be looked at.

Some lawmakers, though, feel the bills undermine compromises already forged by hospitals and doctors.

"I fear that reflects again a reluctance to make hard decisions about controlling health care costs," said Rep. Mary Margaret Oliver, D-Decatur.