Homer Alaska - Business

Story last updated at 10:53 AM on Wednesday, December 14, 2011

Doctors continue to pursue idea of opening Kenai surgery center

By Brian Smith
Morris News Service - Alaska

A group of area surgeons has resubmitted paperwork seeking to open a surgery center in Kenai after having the idea denied by the state as a result of an incomplete application.

Kahtnu Ventures LLC recently filed an application for a certificate of need with the Alaska Department of Health and Social Services for an 8,365-square-foot, $9-million ambulatory surgical center. However, that application was denied for "untimely submission of information."

Dr. James Zirul, an ear, nose and throat surgeon in Kenai and one of the founding members of Kahtnu, confirmed the group resubmitted their application for a certificate of need from the state on Dec. 1.

The group consists of seven other surgeons, all of whom are associated with Central Peninsula Hospital in Soldotna, Zirul said. The group hopes to build the facility in downtown Kenai by the spring of 2013, he said.

Currently, the state is waiting for other similar CON applications to come forward before conducting a concurrent review of the application. That deadline is Dec. 27.

Zirul said a surgery center providing outpatient surgeries is designed to provide "high quality care" efficiently, "which makes it much more cost effective at a patient level to have procedures performed."

"Myself and other surgeons in this area have recognized for years that there is a need for an outpatient surgery center, or an ambulatory surgery center," he said.

In September, Kahtnu filed for a CON and, at the time, former CPH CEO Ryan Smith said none of the hospital's surgeons had taken ownership of the proposal.

Zirul wrote in a news release there have been discussions with CPH since the mid 1990s about opening a surgery center, most recently at a Central Peninsula General Hospital Inc. board meeting in June where Zirul and others detailed and proposed the project for consideration.

"In the process of all that development, we would bring it to them, we would talk about it and then somehow it would be put on the back burner," Zirul said of the proposal's history. "Over the past year, in further discussions with these other surgeons, we decided that as a group we would get a business plan together and start the ball rolling.

"We went to (CPH) first and asked them if they would like to participate with this because this is part of what they told us they wanted to do in the past.

"You'd have to ask their reasons for not wanting to participate," Zirul said.

CPGH Inc. board president Lore Weimer said in general surgery centers in other areas pose a "significant threat" to hospitals' operations.

"More often than not it is not considered a desirable opportunity," she said.

However, both sides discussed the matter at a recent meeting that included at least Weimer, Zirul and interim CPH CEO Rick Davis.

Zirul wrote in a news release that Kahtnu wanted to collaborate with CPH and Weimer said last Thursday a "spirit of collaboration is there."

However, Weimer said CPH's lease and operating agreement may become an obstacle in the process of considering a partnership.

"If there is a CON determination that allows them the opportunity to move forward, it may — because of our restrictions in our lease and operating agreement — not be until that point we can look and see what opportunities are available to us," she said. "But in general we are happy to communicate with them."

Zirul said a surgery center in the area is necessary because of the number of cases lost to ambulatory surgical centers in Anchorage.

"Those are cases that can be kept here," he said. "That there is an option for patients to stay in the community for outpatient surgery who would otherwise go North to (those) facilities."

Cost, not level of care, is a main consideration, he said. "The cost to a patient at an outpatient surgery center is less than what it would be at an in-patient center, as is the hospital."

There are a lot of other things going on at a hospital, Zirul said, that make it "inherently inefficient in certain ways."

"The hospital has other responsibilities besides outpatient that it is dedicated to that can sometimes take precedence over what is going on in the operating room," he said. "That's why an outpatient surgery center is much more efficient because a lot of those other issues are out of the picture."

Weimer disagreed.

"I think we would be able to find examples on both sides where the cost for surgery is lower in surgery centers in some places and it isn't in others," she said.

Since the proposal came forward, however, Weimer said the board has been looking at ways to work together with a surgery center.

"While I can't say without a lot of opportunity and analysis and to be able to see their application and what they are proposing whether that would be desirable for us, but I don't see any reason why we wouldn't continue to talk to them about it," she said.

Zirul said "the door is wide open" for CPH and that a partnership would be beneficial to both sides.

"Quite frankly we all see this as a need to benefit the community and obviously, we think it is going to be more cost effective for the patient and the peninsula for this facility to be there," he said.

Brian Smith is a reporter for the Peninsula Clarion.