A medical office building set to break ground in north Douglas County in the next few weeks will include a $3.5 million surgery center that is expected to attract more than 2,000 patients a year and provide less-expensive medical services compared to area hospitals.
This competition may drive costs down, so patients will benefit, said Chris Greenman, who is a partner in Sunridge Medical Properties, a limited-liability company that owns the land and will construct the building to house Carson-Douglas Ambulatory Surgery Center and other health-care providers.
"There is no inexpensive outpatient surgery services available here," he said. "You can have savings up to a third of the cost a hospital will charge for the same services. So the insurance companies are very interested. Outpatient surgeries in an ambulatory surgery center are often more cost effective than a traditional hospital."
Carson-Douglas Ambulatory Surgery Center, off Mica Drive and Highway 395 North, is expected to compete with Sierra Surgery Hospital, which is a 15-bed outpatient and inpatient acute-care hospital that opened last year in North Carson City. Sierra Surgery is owned by a group of physicians and Carson Tahoe Regional Healthcare, which operates the $132 million medical center in North Carson City.
The reason that surgeries are often less expensive at ambulatory-surgery centers is that costs are lower. For example, a repair of an acute rotator cuff tear at an outpatient hospital surgery department can cost about $1,800. The cost for the same procedure at an ambulatory surgery center is about $700, according to an article in the March/April 2005 Journal of Health Care Compliance.
This could pose a revenue problem for the Sierra Surgery Hospital, which serves patients who need care for up to three days. The Douglas County surgery center will only be able to see patients who require stays that are less than 23 hours.
Sierra Surgery officials could not be reached for comment on this story. The Carson Tahoe Regional Healthcare spokeswoman declined to comment.
But Greenman said the company doesn't want to rob patients from either of those facilities - because both are investors.
Carson Tahoe has a 24 percent share in the future surgery center, which is a $378,000 capital contribution, according to documents filed with the state. Carson Ambulatory Surgery Center Inc. has a 10 percent share, which is a $162,000 contribution.
Many of the members who are investing in the new surgery center are also investors in Sierra Surgery. Carson Ambulatory Surgery Center is a group of health-care providers who own a 30 percent share in Sierra Surgery. Carson Tahoe controls the remainder of Sierra Surgery.
The majority of the future for-profit surgery center is controlled by a group of physician investors, who have contributed about $1 million total. They control 66 percent of the planned facility. Seven of the 20 physician investors are involved with Tahoe Fracture & Orthopedic, a group with offices in Carson City, Gardnerville, South Lake Tahoe and Dayton.
Greenman said Sierra Surgery and Carson Tahoe are mindful that some patient cases will come over to the new surgery center.
"Yes, that will be an issue, however, they are investors and will be reaping the benefits," he said. "We're also pulling in areas that have traditionally been separated."
He said the surgery center will bring together services from different areas, rather than take from any one hospital.
The surgery center should be open by September 2007, said Greenman, who is also the administrator for Tahoe Fracture & Orthopedic Medical Clinic and is directing the development of the surgery center.
He said one reason why the Mica Drive location was selected for the medical offices was because of its proximity to the hospitals in Carson City and Gardnerville. In emergency cases, patients can be transported to either location, or to Reno.
Other properties are proposed to move into the two-story Sunridge medical building: Tahoe Fracture & Orthopedic Medical Clinic, Tahoe Women's Care and Sierra Pain Management. Several physicians will lease offices.
The 39,000-square-foot building will be developed by Sunridge and then leased out to these groups. GE Capital is financing a $1 million construction loan and a $1.1 million medical equipment loan, according to certificate of need documents.
This model of medical office management frees the medical providers to focus on patient care, said Lynn O'Mara, health resource analyst with the Nevada State Health Division.
"It is probably one that we'll begin to see more and more of because it allows for more efficient use of a building, as well as it allows the ambulatory surgery center staff to focus on patient care," she said. "And they don't have to worry about the building issues."
The ambulatory surgery center is expected to compete with Carson Valley Medical Center's surgery unit. The medical center, which is owned by Washoe Health System and Barton Healthcare System, pulled out of the partnership about five months ago.
Carson Valley was involved in the planning and was considering a 20 percent interest in the surgery center before it pulled out, said Gerry Conley, administrator for Carson Valley Medical Center.
"As the project evolved the numbers didn't pencil out for my board," he said. "They are very cautious about their investments. They thought this one they should pass on."
Washoe Health System and Barton Healthcare are partners in the Carson Valley Medical Center.
• Contact reporter Becky Bosshart at firstname.lastname@example.org or 881-1212.
Carson-Douglas Ambulatory Surgery Center
• Care is expected to be provided by 20 physician investors.
• It was granted its certificate of need from the state in July 2005.
• It will be housed in a two-story medical office building on Mica Drive that will be constructed by Sunridge Medical Properties.
• It is expected to have two ambulatory surgery operating rooms, one minor procedure room, four pre-operative beds and four recovery beds.
• It is expected to primarily serve Carson City, Dayton, Gardnerville, Genoa and Minden.
• Some surgery services to be provided: orthopedic, pain management, gynecology, ears nose and throat.
• It is expected to have a positive cash flow in its first full year and may turn a profit.
Source: From the state director of the Department of Human Resources letter of approval to construct the surgery center