Proposed legislation would allow physicians to own new three-day hospital

Carson-Tahoe Hospital and Carson Ambulatory Surgical Center are backing legislation that would allow them to own and operate a separate three-day surgical hospital, and patients could be the winners.

The Surgical Center, a business partnership between physicians and the hospital, currently offers limited elective surgeries and one-day hospitalization.

But under current Nevada law, physicians cannot refer patients to a three-day hospital if they own part of the facility.

The legislation would allow the current operation to expand to a separate three-day facility and ultimately streamline service, resulting in lower costs for patients as well as augment the existing facility.

"This is one of the few states that doesn't allow physicians to own hospitals," hospital chief executive officer Steve Smith said, noting federal legislation passed this year allows ambulatory surgical centers to keep patients for three days rather than just one, which could pose a real threat to Carson-Tahoe.

"Since that (federal legislation) passed, we're concerned that some other entity could come into Carson City and build a new hospital," he said.

If the legislation passes, the new three-day facility could cost the hospital about $17 million in revenues annually according to Smith, but as a partner in the operation they could get a slice of that pie. The size of that slice is yet to be determined.

It's common practice for physicians to usurp the most lucrative services from a hospital, leaving the hospital to provide those services that ultimately lose money, according to Smith. One of the best safe-guards against the practice is partnerships with those physicians.

Mary Walker, lobbyist for the hospital, said the hospital believes in this legislation because the 30-bed hospital will alleviate the shortage of beds, and provide a low-cost alternative to the community.

"They can treat patients and get them out sooner," Walker said, noting that the three-day hospital is limited to elective surgeries, is more efficient and less expensive than a full service hospital.

Originally written to address concerns in Carson City, the legislation has been expanded to include all Nevada counties with a population of 100,000 or fewer.

Walker said rural counties have trouble retaining physicians and finding the capital for improvements such as new technology and surgical room expansion. This proposal will help them attract the physician's investment, and attract and keep physicians.

"One of Carson-Tahoe's successes has been partnering with local physicians," Walker said. "They've been very successful in bringing new technology in at a low cost. They're a model to other rural hospitals."

Extra protection for public hospitals is written into the proposed legislation. The board of county commissioners and boards of supervisors must determine there are no substantial negative fiscal impacts to the community's public hospital. The hospital's governing board must also support the establishment of the surgical hospital.