Hospital says all options still on table for new orthopedic surgery center
November 11, 2018
STEAMBOAT SPRINGS — According to Soniya Fidler, chief operating officer and interim president at UCHealth Yampa Valley Medical Center, "nothing is finalized" regarding the hospital's plans for a new multi-specialty orthopedic surgery center.
"There are so many options we've considered in the course of the last few months," she said during a Nov. 1 interview. “And we are actively engaged in discussions with local orthopedic surgeons."
That's a significant shift from a couple of months ago, when then CEO Frank May wrote to colleagues in a Sept. 18 letter that “leaders and work groups are finalizing plans for the center. Our goal is to submit the project to the city for review in November, with groundbreaking anticipated to take place in the spring."
On the same day, at a town hall meeting, May announced publicly that the team of local orthopedic surgeons with whom the hospital had been negotiating for years "decided to take a different path."
The plans to collaborate on the creation of a new orthopedic surgery center have hit numerous stumbling blocks — one, when the hospital was sold to UCHealth in 2017, and again, last March when the hospital submitted plans to build a new facility.
The announcement of plans to construct a new orthopedic center caught local surgeons off guard, creating uncertainty around what role they would play at the new center, especially when the hospital began advertising for new orthopedic surgeons.
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In the preliminary plans, the hospital was moving in the direction of a hospital outpatient department, or HOPD, as opposed to an ambulatory surgery center, or ASC. The surgeons had pushed for an ASC, arguing it would be more cost efficient and give them more of a seat at the table.
Negotiations continued over the summer with the nine local surgeons, who earlier this year merged Steamboat Orthopaedic Associates and Orthopeadics of Steamboat to form the Steamboat Orthopedic & Spine Institute.
But on Sept. 7, the surgeons declined the offer made to them by the hospital, due to an "unsustainable cost structure and inadequate space to practice orthopedic surgery," according to the surgeons.
"We value our independence and autonomy as a private practice, and we had to make a business decision to ensure we stay solvent as a local business long term," surgeon and spokesman Patrick Johnston explained. "This included finding more affordable options to house our practice."
In May's Sept. 18 letter, he explained the surgeons turned down a partnership proposal that "would have locked in a collaborative relationship that put patients first."
May’s suggestions that the doctors weren't putting patients first particularly infuriated orthopedic surgeon Michael Sisk, who expressed as much at the town hall meeting. He told May it was all about the money with UCHealth, not the patients.
In more recent weeks, however, negotiations have resumed, and according to Fidler, all options are still being considered.
Johnston said he is feeling optimistic.
"It's true that there have been times when it felt like our priorities were at odds with the hospital's priorities," he said. "We feel that both parties are working hard to understand each other, and that we are coming closer to a single mission. Our relationship with the hospital is evolving in a very positive way."
May announced his retirement Sept. 25.
Sisk said the initial deal offered by May to the surgeons in terms of rent and space in the new facility made it financially impossible for them to consider it.
None of the surgeons’ requests had been honored, he said.
"They made it impossible for us to be there," Sisk said.
Sisk believes the hospital should have been much more accommodating to the surgeons, who have longstanding relationships in the community and are a "cash cow," accounting for as much as 70 percent of hospital revenue.
Fidler did not confirm this exact figure but did say the revenue and business attributed to the orthopedic surgeons is significant and "a high number."
"We always prefer working with local providers," said Kevin Unger, president and CEO of UCHealth's northern Colorado region.
The initial proposal for the surgery center to be part of the hospital — an HOPD versus an ASC — also raised concerns from the community about whether the new facility would lower costs for patients. It also came with a projected cost of $30 million.
"It has the potential to be an overdevelopment with underutilized space, resulting in higher costs," said Gary Haberlan, a former foundation board member, associate administrator and hospital pharmacist for nearly 35 years. "The hospital currently has a significant amount of space that is not currently being utilized."
Haberlan suggested a better route would be an ASC and joint venture. The ASC, said Haberlan, has the potential to substantially lower costs for the community.
If the hospital went in the direction of the HOPD, which would have to be located within the rest of the Yampa Valley Medical Center campus, it would also be part of the hospital in terms of the facility fees charged to patients and insurers.
"The building would not so much be an asset to the community as an asset to UCHealth," said Nancy Spillane, a former foundation board member.
Facility fees are controversial in the health care industry.
Critics argue that patients and insurance companies are charged unfairly large additional fees when services are rendered by independent doctors in a hospital, or hospital-owned facility, than if the same procedures were performed in a private doctor's office.
According to a 2013 national report by the Medicare Payment Advisory Commission, an echocardiogram, an ultrasound test that helps doctors look at a patient's heart, costs about 140 percent more when done in a hospital facility located off the hospital's campus than in a doctor's office. The commission is an agency that advises Congress on Medicare spending issues.
Facility fees also impact Medicare reimbursements. In 2011, Medicare paid about 80 percent more for a 15-minute office visit in an HOPD than in a freestanding physician office, according to the commission.
In 2017, a new policy was implemented over industry opposition in which the Centers for Medicare and Medicaid Services no longer pay hospital-owned facilities located off a hospital's grounds the same as those based at a hospital. Thus there is geographical significance of where a hospital builds a new center.
The health care industry argues the facility fees are necessary given their much higher overhead costs, and the access to resources available in a hospital system.
Sisk contends the bottom line is the reason the hospital wants a HOPD. An ASC, he said, would be far more convenient and cheaper. Sisk said the hospital has obstructed efforts toward an ASC every step of the way thus far.
Haberlan argued a joint venture also allows surgeons to be more responsive to patient concerns and needs and have more input in how to operate the business more efficiently.
In an interview Nov. 1, Dr. Tom Downes, who is serving as Yampa Valley Medical Center’s interim CEO, said, "We can't say an HOPD is set in stone."
Downes, who is also serving as chief medical officer of UCHealth Poudre Valley Hospital and UCHealth Medical Center of the Rockies, has a specific focus on physician relations, and he said he’s been busy meeting with the local hospital staff. They, along with the hospital board, has begun the process of searching for a new president and CEO.
In terms of the new surgery center, Fidler reiterated that "nothing is definite."
Sisk acknowledged that on the surgeons' side, the merger of the two orthopedic offices makes negotiations with the hospital much smoother. Dealing with competing groups was understandably an additional challenge from the hospital's perspective, he added.
The merger was announced last April, and they officially co-located into the same, temporary office about two weeks ago.
“It’s a dream team with nine supremely qualified orthopedic surgeons who can handle everything, A to Z," Sisk said.
Despite the rocky past, he also maintains it is best for the community if the surgeons and the hospital can find a way to work together.
Fidler said the newly cohesive Steamboat Orthopedic & Spine Institute created "new opportunities to engage."
As of Nov. 1, Fidler said they were still advertising for new surgeons, but that things were "changing day to day."
In terms of permitting, an additional parking lot next to the hospital did receive planning commission approval at the end of September and approval by the City Council in mid-October.
"With the onset of winter conditions, the decision was made to pause the project until the spring," said Lindsey Reznicek, Yampa Valley Medical Center communications specialist.
"We are currently in positive negotiations with the hospital to explore other models of collaboration. And we are excited about partnering with the hospital to create high quality services for patients close to home,” Johnston said. “We think the best orthopedic care for Steamboat would be a collaborative effort between UCHealth Yampa Valley Medical Center and our physician group working as a local private practice, allowing us to make decisions for our patients here in Steamboat."
"The goal in any community is to keep care local," Unger said. "We don't want patients to feel they have to get care elsewhere. We want to bring the best product to the patient close to home."
"In an ideal world," Sisk said, "all of this bickering and bad blood from the past would go away. We both can provide an awesome patient experience that is profitable for both of us and cheaper for the patient. We, as a group, are willing to look at it again, but the hospital has to meet us in the middle."