Clearly the impetus for physicians to invest in ancillary facilities, be they imaging facilities, ambulatory surgery centers, or full-blown specialty hospitals, is waning professional reimbursement and lack of physician control over what they feel is mismanagement by an increasingly bureaucratic and bloated administrative structure. These are common motivations in both private practice and academic settings.
In my own academic medical center, a series of developments that have occurred illustrate nicely both sides of the debate over whether or not physician-owned facilities and services are a good thing. Being an academic medical center with a rich history of entrepreneurial spirit (including pharmaceutical and biotech spin-offs), there has been a tradition of business-minded specialties gaining independence.
The first was ophthalmology, which with the help of philanthropy and good business sense developed a freestanding facility 12 years ago. Since that time, the ophthalmology department (in partnership with the medical school) controlled charges and revenues as well as the professional revenues of this clinic and operating facility. Since this was a very lucrative business (especially the surgery portion, considering the facility revenues), the department has since expanded and opened up a building that is some three times the size of the original facility.
The next service line to gain independence was cancer care, thanks to a wealthy benefactor who donated a significant amount of money to build a combined research institute and cancer hospital. This hospital effectively has peeled away the well-insured portion of the surgical and medical oncology business from the main university hospital (because there is no emergency room at the cancer hospital, the underinsured patients are preferentially admitted to the university hospital). In addition, radiation oncology, classically a primary source of revenue for hospitals, has moved its base of operations to the cancer hospital. The most recent emigration was, as one might predict, orthopedics. Approximately one-half of orthopedics’ total surgical volume (all outpatient procedures, including simple spine) and all orthopedic clinic business was decanted into the orthopedic facility, which has the capability to provide care for overnight admission.
All of these entities, with the original blessing of the medical school and CEO of the hospital, have become or are in the process of becoming financially independent and successful. They have reaped the benefits of an improved payer mix, the efficiencies of running specialty operating rooms, and the growth in their respective academic faculty. However, the university hospital, as an independent financial enterprise, is now struggling for capital to facilitate much-needed expansion. All of the loss leaders in a medical school — poorly reimbursing medical specialties such as endocrinology, neurology, trauma services, and others — that require subsidization for solvency but are necessary for student education and comprehensive training programs are now being supported by resources that are generated by vanishingly fewer specialties in the university hospital.
Neurosurgery and some other surgical subspecialties (heart surgery, for example) are now shouldering much of the facility cross-subsidization necessary to provide comprehensive programs in a full-service academic institution. While most spine practices may thrive in a specialty hospital, cranial neurosurgery is heavily invested in the general full-service hospital. Cranial surgery requires access to the neurointerventional subspecialists, intensive care units, critical care specialists, emergency room, and tertiary imaging modalities, and thus will not in the near future be amenable to an ambulatory surgery center approach.
It has become very apparent to the medical school leadership that the community as a whole must support and nourish the Mother Ship. Ironically, I now find myself — entrepreneurial, an advocate of hard work, free enterprise and competition — helping to lead the charge within the medical school for a social consciousness that will support those medical services which fulfill vital educational and tertiary healthcare needs. Such a consciousness and support are necessary for neurosurgery to thrive, to help care for the underinsured, and to train our next generation of surgeons.
William T. Couldwell, MD, PhD, is editor of the AANS Bulletin . He is professor and Joseph J. Yager Chair of the Department of Neurosurgery at the University of Utah School of Medicine.