The Surgery Center of Joliet in Illinois has applied to discontinue its certificate of need (CON) and become the outpatient surgery department of the Provena Saint Joseph Medical Center.

Since 2006 the underperforming surgery center, located in an office building on the campus of the medical center, has been a joint venture between Provena Health, based in Mokona, Ill., and several local physicians. Provena owns 49.5% of the center.

If the application filed in July is approved, the health system will buy out its partners and the physicians will continue to manage the outpatient surgery department on a flat-fee basis not tied to profitability, said Thomas Manak, system director of strategic planning for Provena Health, based in Mokona, Ill.

"We want to develop additional operating room space for the hospital," said Mr. Manak.

The new arrangement will let the hospital shift some of its outpatient volume away from the main hospital and let the new outpatient department benefit from higher hospital reimbursement rates. In part, the change is a result of "the changing dynamic of the industry," said Mr. Manak.

More importantly, the plan is a result of the fact that the outpatient surgery volume at the hospital has grown more than in the surgery center. According to the application filed with the Illinois Health Facilities and Services Review Board, the surgery center ran at 47% capacity in 2009 and 39% in 2008. At the same time, the hospital ORs have been used at 169% of the state standard of 1,500 hours per room, according to health department documents.

Although the hospital and the surgery center are walking-distance apart, surgeons continued to bring their cases to the hospital. "I have no idea why," said Mr. Manak. "It's physician preference."

The administrator and agent for the Surgery Center of Joliet, Marge Schillaci, RN, MSN, said it was too early to comment on the application to discontinue the CON or the plan for the center.

A hearing on the surgery center's application to end its CON is scheduled for Oct. 26, said Mr. Manak. If the application is approved the conversion should be complete by the end of the year.

Kent Steinriede

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