Physician entrepreneurs are taking steps to sell their expertise in less competitive markets abroad.
The Midwest Center for Day Surgery, a joint venture that's 51% owned by physicians and 49% owned by Advocate Health Care, has partnered with Gemini Consulting Group to help the group's United Kingdom subsidiary set up surgery centers with local specialists as equity owners.
The Midwest Center is based on the campus of Advocate Good Samaritan Hospital in Downers Grove, Ill.
The U.K. facilities will be owned by local specialists-called consultants-in partnership with Surgicenters U.K., which is owned by a Gemini subsidiary in the U.K. Gemini is based in Oak Brook, Ill.
Other owners may include a large private hospital group or a venture capital group, said James McCarthy, Gemini president.
The first surgery center will open later this year in Birmingham. In all, 25 surgery centers are planned for the U.K. in the next three years, he said.
Since "prohibitions doctors face in the states (against self-referrals) are unlikely in the U.K.," primary-care doctors in the U.K.-called GP fundholders-also could buy equity in the surgery centers, McCarthy said.
The U.K. facilities will be serviced by Surgical Ventures International. SVI is 40% owned by Gemini, 40% by the Midwest Center and 20% by the center's administrator, Ronald Ladniak.
SVI will funnel expertise and management assistance from the Midwest Center and Gemini to the U.K. surgery centers and to physicians, hospitals and health systems in the U.S. and abroad that want to set up ambulatory surgical centers.
The U.K. market is ripe for surgery centers because patients wait up to a year in a public hospital for surgery such as hernia repair. Private hospitals so far have not stepped in to meet consumer demand, McCarthy said.
He made his remarks during an International Business Communications conference, "Exporting Managed Care to Europe," recently held in Washington.
"It's not contemplated that the physician shareholders of the Midwest center will have ownership in the U.K. facilities," said Bryan Burgett, Midwest vice president and general counsel. But it's possible that Midwest physicians will obtain equity positions in facilities planned for the U.S. and other countries abroad, he said.
"Surgery centers are one of the last legal investments for doctors," Ladniak said. Midwest Center, which opened in 1985, will gross over $8 million in revenues this year. It has been very profitable for its shareholder physicians, who sought to supplement their income as managed care squeezed their rates, Ladniak said.
The center also has been profitable for Advocate, which will reap its share of returns on the consulting and management fees SVI charges, said Lloyd Dean, Advocate's executive vice president of operations.
"The Midwest Center has been a win-win project for Advocate and the physicians," he said.