A lawsuit along with legislative action are expected to rain down on the Georgia Board of Community Healths Dec. 13 unanimous 6-0 decision to approve a controversial certificate-of-need rule that recognizes general surgeons as single specialists. That decision paves the way for general surgeons to open their own ambulatory surgery centers. The rule goes into effect Jan. 1, 2008.
While there are 200 small physician-owned ASCs in Georgiaowned by oral surgeons, ophthalmologists, plastic surgeons, gastroenterologists and orthopedic surgeonsnone is operated by general surgeons, according to the state Department of Community Health, or DCH.
Some experts estimate six to 12 general surgery groups will build or open ASCs if the rule goes unchallenged in court or the states General Assembly, which meets next month.
We are thrilled for not only the general surgeons but for patients, said Kathy Browning, executive director of the Georgia Society of General Surgeons. They will have options to get higher-quality and lower-cost caresomething they did not have before.
The Georgia Alliance of Community Hospitals will file a lawsuit to overturn the rule, says alliance President Monty Veazey. Hospitals also will ask the General Assembly to reverse the DCHs CON rule change, says Kevin Bloye, a spokesman with the Georgia Hospital Association. The association will join the lawsuit, he says.
We are disappointed in the boards decision, Bloye says. We still maintain the DCH doesnt have the legal authority to make changes.
Bloye says the CON rule change could cause many hospitals to lose money, cut services or possibly close. In 2005, the last year for which data are available, 56 of 161 hospitals, or nearly 35%, lost money, he says. Some 56% of hospitals had negative patient-care margins in 2005, he says.
It is getting worse in 2007, says Bloye, adding that ASCs operated by general surgeons will conduct cream-skimming (of profitable patients) that will have a dramatic negative effect on hospital bottom lines.
Bloye adds that because outpatient clinics arent legally required to serve indigent patients, they are free to load up on patients who can afford to pay. Hospitals then are left with a higher concentration of nonpaying patients.
To address those issues, the board also approved a separate resolution that asks the General Assembly to approve legislation that would require physician-owned surgery centers to treat Medicaid and uninsured patients and report their utilization data to the state.
Thomas Gadacz, a general surgeon and professor emeritus of the department of surgery at the Medical College of Georgia in Augusta, says general surgeons support the proposed legislation.
Providing charity care is very appropriate, Gadacz says. This will affect the other specialties like ophthalmology that also operate surgery centers. It is very similar to the requirement that hospitals have.
Thomas Reeve III, a general surgeon in Carrollton, says some hospitals exaggerate the effects general surgeons will have on the outpatient surgery market. For example, five single specialty outpatient surgery centers have opened near 176-bed Tanner Medical Center, Carrollton, over the past 10 years, and have peacefully coexisted, he says.
Loy Howard, president and chief executive officer of three-hospital Tanner Health System, is in favor of the CON rule change for general surgeons. It is unfortunate that hospitals and doctors are fighting over these kinds of issues when we have Medicaid funding and rising uninsured issues facing us, Howard says. I dont think privately owned surgery center are good for us, (but) I dont see why general surgeons dont have the right to have surgery centers.
The ASCs also havent negatively affected Tanners Carrollton hospital. We have six ORs, and we run five around-the-clock and the sixth is quite busy. We have not seen any decline in surgeries, he says. Over the past five years, operating margins have averaged 7.5%, he says. This year we are running at 2%, but that is due to significant cuts in Medicaid and the uninsured.
Under the CON rule change, general surgeons, who focus on abdominal surgeries, are now classified as single specialists, a designation every state had recognized except Georgia. Single-specialty physicians are exempt from CONs if capital expenditures are less than $1.71 million. However, they must file with DCH for a letter of nonreviewability.
Backers of the change, including the American College of Surgeons, say physician-owned ASCs offer patients high-quality healthcare at lower costs than at hospitals.
For example, hospitals receive a $3,000 inpatient fee for hernia repair at a hospital, while an ASC gets $800, says Gadacz, a former ASC governor from Georgia. We want to reduce the costs of healthcare. It is astronomical, he says.
General surgeons also believe patients will benefit because minor outpatient surgeries will be more convenient, Gadacz says. The smaller cases in hospitals are deferred later in the day, Gadacz says. Hospitals want major cases in the morning because they have larger nursing staffs then. Simple operations are sometimes done at seven or eight at night. What hospitals do is set up schedules that are inconvenient to patients, doctors and nurses.
It is unclear why the DCH in 1998 adopted the definition of general surgeons as multispecialty. But in 1991, the state exempted single-specialty physicians from CON rules. However, Rhonda Medows, who became DCH commissioner in late 2005, began efforts over the past year to reverse that decision.
General surgeons are recognized by the American Medical Association to be single specialists, and all single-specialist physicians should be treated as hospital applicants, says Medows, who adds she is not afraid to be sued.
The DCHs CON rule change will now be forwarded to the states Legislature. House and Senate leaders can protest or appeal to stop it, Medows says. They have never tried to change a rule, but they have the opportunity to change or clarify the statute.
Reeve says he isnt surprised that hospitals will fight the rule change. We have a small group of hospital leaders who are out to squish this effort, he says. They wont quit.