Surgery center bid sparks sharp criticism

Published May 28, 2014 at 4:00pm

WESTMORELAND — Merits and detriments of a planned ambulatory surgery center are being weighed by Oneida County Industrial Development Agency board members as they consider requested assistance for the project.

On one side are eight surgeons based in Utica and Hamilton and the Oneida Healthcare Center who want to construct the outpatient facility that would be for orthopedic procedures. Located off Route 233 across from the Cider Street intersection, backers say it would serve many patients who currently go out of the area for these same procedures.

“We’re trying to to take care of people who live here,” said Dr. Rudolph Buckley, who specializes in spine surgery and is a principal in the proposal, at this month’s IDA meeting. “We are taking care of Oneida County patients and trying to keep them here.”

He said one of the surgeons in his group does work at Syracuse facilities.

The application for Westmoreland ASC, LLC, has been approved by the state’s Health Department’s certificate-of-need program. Project cost was estimated at $5.2 million.

Rome Memorial Hospital finds itself on the other side in this IDA deliberation, seeing no need for additional surgical suites and predicting dire financial consequences if the center opens. The agency carefully evaluates extending assistance to projects that could seemingly unfairly compete with existing operations thanks to taxpayer subsidies. Standard IDA assistance of partial property tax abatement, sales tax break on materials and state mortgage tax recording exemption were requested for the center.

“We vehemently oppose the project because it is an unnecessary duplication of services and threatens the viability of essential services and jobs at Rome Memorial Hospital, as well as future economic development that depends upon quality health care as a core asset,” said CEO and President Basil J. Ariglio in a letter to the IDA. “There is more than enough surgical capacity at existing facilities in Oneida County, without Oneida Healthcare Center building a new facility nearly 18 miles away from its main campus.”

He adds, “Unnecessary duplication in services drives up costs for businesses, consumers and taxpayers.”

Buckley says that because ​none of the eight surgeons performs surgery at Rome Memorial, the center won’t take business from this hospital.

Ariglio insists there will be a negative impact on hospitals.

“Shifting revenue to a new for-profit entity would cripple Oneida County hospitals that depend upon margins from outpatient serves to fund essential inpatient and emergency services and provide charity care to the most vulnerable residents in our community,” he wrote. “The lost revenue would exacerbate RMH’s consolidated operating loss that totaled more than $2.7 million in 2013.”

Hit with more than $30 million in federal reimbursement cuts, the hospital executive says Rome Memorial can’t afford “further erosion of our market share to physicians who would have the ability to steer patients to a facility where they have a financial interest.”

Buckley says free-standing specialty centers offer efficiencies that make less expensive, which helps achieve goals of reducing health care costs. He says there are no plans to expand beyond orthopedic procedures.

Additionally, the surgeon notes that Rome Memorial is a partner with ophthalmologists in an outpatient eye surgery center in Griffiss business park.

Rome Memorial also questions whether 20 jobs will be created if the new center opens versus the migration of existing ones from other facilities.

“... these are positions that will simply be shifted from existing hospitals as they lose their surgical volume to the new center,” Ariglio wrote. “Declining reimbursements and increased competition for profitable outpatient serves have already resulted in workforce reductions at the county’s three hospitals.”

Two of the seven IDA board members have already said they will have to abstain from votes regarding the Westmoreland ASC application. That means if the incentives are to go through, four of the five remaining members will have to vote for them. IDA assistance approval requires a minimum of four votes.

The competition issue surrounding the Westmoreland ASC are not confined just to this particular application. The IDA has before it a request for another surgery center project, this one in Kirkland on Route 5. OMNI Outpatient Surgery Center would be focused on procedures that reduce pain.