By Senator Rob O’Leary
Currently physicians are allowed to open and operate free-standing surgical centers without going through the same licensing process as hospital-owned surgical centers; known as a Determination of Need (DoN).
While these physician-exempted surgical centers provide additional access to services, they often compete with our community hospitals for patients and leave these hospitals to deal with the more complex and expensive cases. This can cause financial hardships for hospitals that depend on revenue from more basic surgical procedures to subsidize other critical public services, such as emergency rooms.
That is why I have filed legislation to apply the same state licensure, national accreditation and quality of care standards that apply to acute care hospitals providing the same level of surgical service to these physician-owned single or multi-specialty facilities. It does not involve imaging centers and other similar operations.
This legislation concerns Ambulatory Surgical Centers (ASCs), which are facilities that perform outpatient surgical procedures not requiring an overnight hospital stay.
Currently, only free-standing ASCs—those not owned and operated by physicians and covered by their licenses—are required to meet similar state regulatory criteria.
Only the physician-owned clinics and offices may provide surgical procedures without direct oversight or review by the Department of Public Health.
My bill establishes a level playing field without creating administrative burdens.
The DoN law is designed to ensure equitable access to health care services; to help maintain standards of quality; and to contain overall health care costs by eliminating expensive duplication of technologies, facilities and services.
All hospital-associated ASCs must be operated under a hospital facility license and are subject to DoN review on the same basis as other hospital facilities and services.
In contrast, a DoN review is not required for a physician-owned ASC that relies upon the physician office exemption.
The DoN process also was designed to limit the growth of health care costs by requiring health care providers proposing to build new facilities to demonstrate they were filling an unmet need.
Applying the DoN standard to all centers will slow the growth of so-called “niche” providers.
These “niche” providers are typically physician-owned ASCs that remove certain profitable procedures out of the hospital setting and into a for-profit business. This legislation still allows the creation of ambulatory surgical centers, but only if a clear need is established.
The increase in ASCs has the potential for increased costs to the private and MassHealth market. This is related to duplication of services in a given geographic area, the impact on the current health delivery infrastructure and the ability of hospitals, particularly community hospitals, to maintain their crucial role in the equation, particularly their emergency departments.
Most community hospitals, including those on Cape Cod, have suffered many years of poor profitability as a result of the current absence of this public oversight.
(Senator O’Leary, D-Cummaquid, represents the Mid and Lower Cape and Islands and is a member of the Legislature’s Joint Public Health Committee.)
(EDITOR’S NOTE: As he filed this report, Senator O’Leary told TYGH that he has agreed to meet with the physicians affected by his bill to hear their concerns.)
At last winter’s meeting of the Advisory Board of To Your Good Health, A Health Care Newsletter, Cape Cod Healthcare President/CEO Steve Abbott warned of an increasing “impact on community hospitals of so-called niche players like surgery and imaging centers who don’t have to cross-subsidize those other services that don’t really pay so well and often are the most needed,” such as emergency rooms.
In a recent interview with TYGH concerning his impending retirement, Mr. Abbott reiterated that one of the reasons the hospital system faced a continuing challenge “to remain financially viable” was the growing “competitive factor of new outpatient services, those free-standing centers for [such as] surgery and imaging.”