From Outpatient to Overnight
Ohio ASC Expanding Into Physician-owned Hospital
Newark Surgery Center in Newark, Ohio, isn't the only surgical option available to Licking County residents and the physicians who'll operate on them. The facility faces competition from the 161-bed Licking Memorial Hospital, also in Newark, and even from the Ohio State University Medical Center, 40 miles west in Columbus. Yet market research surveys have shown that 50 percent of Licking County's residents who've sought surgical care have done so outside the county.

That's why the 9-year-old, three-OR, physician-owned, multi-specialty outpatient surgery center is undergoing an expansion that will later this year convert it into the Medical Center of Newark, a 22-bed inpatient hospital, says Laurie Eberly, the surgery center's chief operating officer.

The $15 million expansion - to be completed early this year - will add 45,000 square feet, including a fourth OR, an emergency room, a laboratory and a pharmacy, to the 15,000-square foot ASC and connect it to a 7,500-square foot imaging center on the physician-owned medical campus. Currently licensed by the state to perform only procedures requiring a 23-hour or less recovery stay, the facility is slated to go 24/7 by October.

Because the facility will be opening as a general acute care hospital, it sidesteps any complications that the state's 90-day moratorium on the building of specialty hospitals - scheduled to take effect in the spring - may have caused. Its plans were criticized, however, by Licking Memorial Hospital administrators for oversaturating the market.

While Ms. Eberly says the ASC's founders see the transition from outpatient surgery to overnight services as "a natural progression," she also acknowledges the conventional wisdom that warns small, efficient ASCs to avoid the size, expense and bureaucracy that can encumber hospitals.

"We have the advantage of coming from an [ASC] environment," says Ms. Eberly, explaining that a focus on customer service for patients - including a direct telephone number to the pre-op triage nurse on its Web site instead of an e-mail address and complimentary valet parking for surgery patients and family members - "will keep all eyes on the facility's primary purpose."

- David Bernard

A Threat to Liposuction?
Lipid-dissolving Treatment Claims to Melt Fat Away
It doesn't suck. It dissolves fat away." With these seven words, Advanced Lipo Dissolve Center in St. Louis is promoting an injectable called Lipodissolve (www.lipodissolve.com) as an alternative to liposuction in several markets.

According to David Caplin, MD, medical director at Advanced Lipo Dissolve Center, the treatment is a compound of phosphatidylcholine, a polar lipid molecule, and deoxycholate, a bile salt. The compound is said to break down the fat cell wall, which the body then metabolizes along with the cell's contents - or, in layman's terms, it literally melts fat away.

Dr. Caplin says the price varies by the number of body parts being treated. On average, he says, most patients require about six treatments spaced about two weeks apart at $400 per injection. The length of treatment can be as short as three months or as long as 12 months, depending on how long it takes the skin to contract after a treatment. Each injection only takes minutes to perform and generally no bed rest or reduced activity is necessary afterwards.

"Lipodissolve is a non-surgical technique designed to eliminate fat in areas that don't respond to diet and exercise," says Dr. Caplin. "Liposuction is a surgical technique with the same goals although it is capable of removing significantly larger quantities of fat than the quantities targeted by Lipodissolve."

Arnold M. Rotunda, MD, of the department of dermatology at the University of Southern California School of Medicine, who has published a few studies on this therapy, says it seems to be effective, particularly due to the way deoxycholate can remove small deposits of adipose tissue. "It does work, there's not doubt about that," he says. In his practice, he says he sometimes uses just deoxycholate for small injections. "I feel more comfortable using deoxycholate alone. It's safe and stable at a molecular level."

Allen Matarasso, MD, a Manhattan plastic surgeon and president of the New York Regional Society of Plastic and Reconstructive Surgeons, is concerned that Lipodissolve and other mesotherapies where numerous concoctions can be injected into the skin's mesoderm layer could have a varying range of ingredients. "There is no standard formulation of these products, and that is a concern," he says. Dr. Caplin says all the ALDC centers use the same combination of phosphatidylcholine and deoxycholate.

Dr. Matarasso doesn't see Lipodissolve as a threat to liposuction but rather as an adjunct therapy for body contouring procedures or for patients who aren't good candidates for liposuction.

- Nathan Hall

Medicare's Proposed ASC Payment System
GAO Report Good News?
A new government study expected to influence CMS's final rule on the restructuring of the outpatient payment system shows that ASCs' costs, while significantly lower than hospitals', far exceed proposed payments. The long-awaited GAO report backs linking ASC and hospital rates, as proposed by CMS in August. It also reveals that ASCs' costs are 84 percent of current hospital payments - a far cry from the 62 percent of payments the government has proposed.

"The GAO report clearly shows that for the services currently performed in ASCs, 62 percent of the hospital rates falls woefully short of the cost of providing ASC services to Medicare beneficiaries," says Craig Jeffries, executive director of AAASC.

Overall, the GAO found that ASCs operate at just 39 percent of hospitals' costs. However, notes AAASC, many of those procedures are rarely or never performed, and it is the "analysis that account[s] for the procedures actually performed in an ASC" that is most important. That weighted figure is 84 percent of payments.

Further, notes Kathy Bryant, the president of FASA, the report shows that both ASCs and hospitals bill for diagnostic, laboratory and imaging services added to the top 20 ASC procedures at very similar rates. Despite the similarity of these figures, hospital costs were 104 percent of payments, meaning ASCs perform at 81 percent of hospital costs for the same procedures.

"If the government gives us the 75 percent of hospitals' rates that we've been asking for, it'll still be getting a bargain," says Ms. Bryant.

- Stephanie Wasek

• N.J. Weighs Out-of-network Cap. New Jersey's Department of Banking and Insurance is considering a proposed regulation that would cap insurance payments for out-of-network services by permitting the state's large group plans to reimburse out-of-network providers at 150 percent of Medicare. At present, out-of-network providers can bill and collect "usual, customary and reasonable" fees for services, which are based on proprietary databases of a region's prevailing charge amounts. The department explains that insurance reimbursements based on Medicare's rates, while lower, allow for price transparency, since Medicare fee schedule data is available to healthcare consumers while the proprietary databases are not. The New Jersey Association of Ambulatory Surgery Centers argues that the proposal, which doesn't apply to hospitals, will cut reimbursement to physicians and physician-owned facilities while adversely impacting their ability to negotiate with insurers and bill and collect for out-of-network services.
• Physician-owned ASCs Remain Dominant. Physicians still own most of the nation's freestanding ASCs, while hospital investments in surgery centers have increased slightly since 2004, according to survey results released by the AAASC. Ninety ASCs from across the country provided ownership information for their facility and up to four other centers in their geographical area. The survey shows that physicians completely own 48 percent of ASCs, a figure that jumps to 88 percent - or 4,000 facilities nationwide - when including ASCs with at least some element of physician ownership. According to the AAASC, hospitals are at least partially invested in 32 percent of ASCs, including physician-hospital joint ventures and hospital-corporation partnerships. That marks a three percent increase from 2004 and represents about 1,500 facilities nationwide. Surgery centers with 100 percent hospital ownership account for just 5 percent of the market, down one percent from 2004, the survey results show. Still, says Craig Jefferies, executive director of the AAASC, total hospital investment in freestanding surgery centers has maintained in a market traditionally dominated by physician-owned models. "There's still a lot of competition out there," he says, "but the ownership dynamic of the industry is changing."
• JCAHO Shortens Name. The Joint Commission on Accreditation of Healthcare Organizations is shortening its name to the "Joint Commission" and changing its logo. The Joint Commission hired an organizational branding firm to study if a name change would better reflect its expanding scope of services.
• Orthopod Who Abandoned Patient to Cash Check Suspended. The Massachusetts state medical board has suspended the license of an orthopedic surgeon who left the OR for 35 minutes during spinal surgery to go to the bank to cash a check. David C. Arndt, MD, of Mount Auburn Hospital was found to pose an "immediate threat to the public health" after he allegedly abandoned a patient under anesthesia with an incision on his back to go to a bank, according to the board. Dr. Arndt left the patient in the hands of a less experienced surgeon. He later told another doctor that he was having a financial crisis "and needed to cash a check," board documents state.