With net patient revenue of $9.1 million in 2011, Hawthorn performs a wide range of surgeries at its current location. But the 32-year-old facility is outdated, Surgical Care says in its application to the Illinois Health Facilities and Services Review Board, which must approve the move.
More than 20 of the 42 doctors listed on Hawthorn's website are affiliated with Lake Forest, raising the prospect that the new facility could siphon patients from the hospital, which has eight operating rooms.
In a letter to the facilities board, which reviews medical projects to prevent duplication of services, David Havill, vice-president of administration at Lake Forest Hospital, noted the overlap and said the hospital and a Northwestern outpatient surgical center in Grayslake have the capacity to handle more patients.
Highland Park, with 11 operating rooms, is the only hospital in the area whose surgical department is at less than 80 percent capacity, according to a facilities board staff report released last week.
“The competition for surgery centers generally in Illinois is pretty steep,” said Neville Bilimoria, a health care attorney and partner at Duane Morris LLP in Chicago. The north suburban market is “pretty competitive as it is,” he added.
“Surgery centers generally in Illinois would look to move to wealthier areas by near virtue of the more lucrative payer mix in those areas,” Mr. Bilimoria said.
A spokeswoman for Lake Forest Hospital did not return messages seeking comment. A spokesman for NorthShore declined to comment.
If approved, Surgical Care's Vernon Hills location will feature three surgical suites, one procedure room and 14 recovery stations. Surgical Care projects the new facility will receive about 3,400 patient referrals a year when it is completed in 2015, the staff report said.
Outpatient surgery centers usually offer services at a lower cost than hospitals, notes Kara Friedman, a partner in the Chicago office of law firm Polsinelli Shughart P.C., which represents Hawthorn and Surgical Care.
“Given all the pressure government and private payers have on funding health care efficiently, we feel this is important for this option to remain available to the community it currently serves,” Ms. Friedman said.
Two of six outpatient surgery centers near the proposed Vernon Hills location have patient volumes lower than the minimum standard, according to the staff report, suggesting the area does not need another facility.
The venture that owns Hawthorn Surgery Center includes Surgical Care and at least a dozen local doctors. The venture has signed a letter of intent with Chicago-based developer HSA Commercial Real Estate, which would construct the new building, according to documents submitted to the facilities board.
The board is expected to consider the application at its Sept. 11-12 meeting.
