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Laura Seitz, Deseret Morning News
Misty Maudsley kisses her son, Jase, prior to ear surgery at the non-hospital affiliated Ear, Nose and Throat Surgery Center.

At half past noon two Wednesdays ago, Jase Maudsley was in the doctor's office again, in pain again and, as usual, being a little trouper. The 18-month-old was getting all kinds of attention from the adults standing around him but not giving him the one thing he wanted — juice.

He hadn't had anything to drink or eat since about 8 p.m. the night before, a fast he clearly was not happy about but one necessary prior to surgery to implant tympanostomy tubes in his eardrums.

The procedure — the most common surgical procedure performed on children age 6 months to 12 years — will relieve the extremely painful build-up of pressure in his middle ear and finally put a stop to his recurring infections and most likely the recurring visits to the doctor.

Remarkably mundane is how the doctor who performed Jase's surgery, one of about 2 million that will be performed nationwide this year, described the operation, which was observed by two Utah lawmakers.

The method used in the procedure was secondary to where it was being done to Sen. Allen Christensen, R-North Ogden, and Rep. Paul Ray, R-Clearfield. The two are sponsoring a bill yet to be debated in public but that is already causing arguments.

Ambulatory surgery centers, like the Ear, Nose and Throat Surgery Center they were visiting, would be designated contract providers reimbursed by the state Medicaid program under SB82.

But there's controversy over the bill and new estimates from the health department that expanding access to outpatient surgery might not be the value to the system the proponents claim.

"They have refigured the net increase in use and other factors, and we may be doing the opposite of saving money," Christensen said. "I'm thinking at this point we're going to end up having to set up a few year-long pilot programs to determine once and for all if the proposed amendment changes will have any effect one way or the other."

Christensen announced during a committee meeting with SB82 on the agenda that he was going to substitute his bill with pilot programs for a year, then if the pilots bear out the savings and access improvement he intends, resubmit the original bill.

Stakeholders affected directly by the shift toward surgical center expansion met with Christensen most of Friday afternoon.

The idea has met strong resistance from hospitals and insurance carriers who say the proposal is counter to the health maintenance organization agreements worked out each year that trades the promise of patients for the promise of discounts on insurance premiums.

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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