The Medicare Prescription Drug, Improvement and Modernization Act of 2003, best known for delivering prescription drug coverage to seniors, also contained a little-known 18-month moratorium on the development of new physician- and investor-owned surgical facilities. Community hospitals, which must compete with these facilities, pushed for the moratorium and are now lobbying to extend it or even make it permanent. That would be a terrible mistake.
Known as specialty surgical hospitals, these facilities typically focus on a few areas of surgical practice, such as heart surgery or orthopedic surgery. They trace their roots to ambulatory surgical centers (ASCs), which started to appear roughly 30 years ago. An ASC is a facility whose patients are admitted, treated, and discharged within a single day.
The ASCs developed slowly until 1982, when Medicare first approved them for reimbursement. From that point, growth has been rapid. There are currently more than 3,500 ASCs in the U.S.
From the ASCs developed modern specialty surgical hospitals. By focusing on a few surgical specialties, additional gains in efficiency and quality can be realized, this time in procedures that require an overnight stay or longer while the patient recovers.
Approximately 100 specialty surgical hospitals exist in the U.S. today. Some, such as Stanislaus Surgical Hospital in Modesto, California, offer a broad range of surgical procedures, including knee and hip replacement, hysterectomy, corneal transplant, and kidney surgery. MedCath, a chain of 13 hospitals in nine states, focuses on cardiovascular surgery.
Specialty surgical hospitals are much smaller than traditional general hospitals. Medcath’s 13 hospitals have between 32 and 112 inpatient beds each, and Stanislaus Surgical Hospital has 23 inpatient beds. The average hospital in the U.S. has more than 160 beds. Hospitals in large urban areas typically have several hundred beds, and some have more than one thousand beds.
Patient-to-nurse ratios are typically lower at specialty surgical hospitals. In a recent interview with Surgicenter Online, Stanislaus Surgical Hospital CEO Michael Lipomi said, “The nurses who prepare patients for surgery also recover patients, so patients see the same reassuring faces.” At larger traditional general hospitals, a patient may see many different nurses during the course of his or her treatment, which can interfere with the continuity of care.
Many specialty surgical hospitals provide better care than their traditional counterparts, as measured by patient outcomes. The Lewin Group, a consulting firm specializing in health care, found the mortality rate from open heart surgery for Medicare cases at MedCath hospitals was 16 percent lower than at community hospitals and 12.5 percent lower than at teaching hospitals.
Specialty hospitals are also able to discharge patients sooner. The average length of stay for MedCath patients was 21.9 percent shorter than at community hospitals, and 25.6 percent shorter than at teaching hospitals. MedCath discharged 22.9 percent more of its patients to their homes than did the community hospitals.
Lewin’s report also showed a lower rate of complications from surgery for MedCath heart patients and noted that MedCath patients’ conditions tended to be more severe than the conditions of patients at other hospitals.
Specialty surgical hospitals pride themselves on a superior level of patient comfort–what observers outside the health care industry might call “customer satisfaction.” This includes rooms with VCRs, private baths, refrigerators, and soft carpeting. Stanislaus Surgical Hospital prepares food for each patient individually, with cooks who ask each patient what they would like to eat.
Despite the luxury, specialty surgical hospitals can cost less than traditional hospitals. MedCath, for example, saves Medicare money due to the shorter average length of stay and reduced rate of complications among its patients. The low rate of patient-to-patient infections at hospitals like Stanislaus Surgical Hospital saves money by dramatically lowering the costs associated with re-admitting and treating patients who become infected while at a hospital.
Specialty surgical hospitals epitomize one of the distinguishing features of the U.S. health care system: its commitment to innovation and consumer choice.
Extending or making permanent the moratorium on these facilities would harm patients and increase spending unnecessarily. The moratorium on new specialty surgical hospitals ought to be lifted so they can continue to play an important role in the country’s continually improving health care system.
Sean Parnell ([email protected]) is vice president – external affairs for The Heartland Institute, a national nonprofit research organization headquartered in Chicago.