Surgery centers want slice of Medicaid pie

Critics say broadening the scope of the state's 55 ambulatory surgery centers will increase the overall number of surgeries and ultimately drive up the cost of health care.

Doctors and advocates for the surgery centers say they are only asking for a few more surgeries to be available to Medicaid patients, the section of the population that most physicians and clinics normally try to avoid.

The smallest portion of the most inexpensive types of outpatient surgeries are the ones that hospitals aren't interested in, at least weren't interested in until the surgery centers made a pitch to share them, proponents have told the Deseret Morning News.

"This all boils down to unwelcome competition that hospitals and the insurance industry see as the nose of the camel getting in their tent," Christensen said after watching the 45-minute surgery. "And with all the health care system reform being proposed, they are more inclined to go into a protect-and-maintain mode of operation until it's sorted out."

Opponents of expanding the centers' patient pool say Christensen and other supporters are overlooking the fact that the discounts worked out between insurers and the insured do indeed save taxpayers money. They also note that hospitals are very competitive among themselves for outpatient cases.

Given the proliferation of the centers, many more non-hospital affiliated surgeries are done than those linked to a hospital, public and private data show. The centers are doing what they accuse hospitals of doing — not competing against each other, critics say.

During the past 20 years, state and hospital association data show five new hospitals and 30 new surgical centers have been built. Claiming that they can't survive without getting a special niche in Medicaid appears less than justified when centers have grown by more than 30 to a total of 55 during the same period.

In the Utah Medicaid market that the surgical centers would like expanded, about 15,000 procedures are performed in hospitals annually at an average cost per procedure to Medicaid of $2,600.

Roughly 5,000 outpatient procedures are performed in ambulatory surgery centers at an average cost to Medicaid per procedure of about $1,850.

Simple arithmetic shows a per-case savings of $716. If 10,000 more cases were done in a surgery center instead of a hospital, the state would realize a savings of $7,160,000 per year.

"There is a flip side to that formula," Christensen said. "Usage could go up a lot and costs could go up along with it. That's why we're taking a minute and taking a closer look."

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E-mail: jthalman@desnews.com