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Beaumont to build outpatient surgery center across from Royal Oak hospital campus

Beaumont Health plans to build a 90,000-square-foot multispecialty ambulatory care surgery center across from its Royal Oak campus with an unnamed developer and offer investment shares to surgeons.

The plans are a shift from its previous plan, which was to build a single-specialty orthopedic surgery center and musculoskeletal center with Michigan Orthopaedic Surgeons PLLC, a Southfield-based group of 44 surgeons affiliated with Beaumont.

Beaumont COO Carolyn Wilson said the plans changed when other surgery specialties expressed interest in outpatient surgery and Beaumont finalized its overall outpatient center model.

“What we are looking at is a broader physician investor opportunity where other cases can be done,” Wilson said. “Discussions are centered around orthopedics, pain and we have interest from urology, general surgery and others.”

Wilson said the plan is centered on a similar outpatient center announcement with a surgery center component in Lennox Township in a partnership with NexCore Group, a Denver-based development company. Other specialties such as gastrointestinal, cardiology and opthalmology also are participating in the planning, she said.

Paul Fortin, M.D., president of Michigan Orthopaedic, said the group wants to be flexible and work cooperatively with Beaumont. He suggested the group may still need another outpatient surgery site, depending on Beaumont’s final plans.

Fortin said Michigan Orthopaedic had “big ideas for a big scope (outpatient surgery) project,” but as discussions progressed with Beaumont it became clear that Beaumont’s plans for the single-specialty orthopedic surgery center changed.

“This scope fits our needs and Beaumont’s needs. We are very interested in maintaining a good relationship with the mothership (Beaumont). We have no reason to compromise our relationship,” Fortin said.

But Fortin said Michigan Orthopaedic is in a growth phase, recently merging with four smaller orthopedic groups and seeking to expand further into other areas of Southeast Michigan.

“We are considering any and all opportunities. We really see it as our mission to embrace the full musculoskeletal cost of care and provide the best product at the best price,” he said.

When asked if Michigan Orthopaedic will have enough capacity over the next five years at the planned Beaumont surgery site and at its current facility at UnaSource Surgery Center in Troy, Fortin said those questions will be answered over time.

“We hope Beaumont continues to value independent doctors” as that is how Beaumont was built and flourished, he said.

In March, Beaumont announced plans to build an outpatient center in Lennox Township in Macomb County by 2020. Beaumont also plans another outpatient center in Wayne County next year. The planned 105,000- to 120,000-square-foot centers will offer primary and specialty care physicians, emergency care, imaging, outpatient surgery, cancer services and physical therapy.

Beaumont is working with NexCore Group to oversee financing, development, leasing, property management and asset management for the centers in Macomb and Wayne counties. A developer hasn’t yet been selected for the 6.5 acre site, which was once home to an elementary school that was demolished in 2005.

“We have a large volume of surgical care (about 7,000 annual surgeries in Royal Oak),” Wilson said. “Doctors have asked for an outpatient freestanding surgery center … and patients are asking for it. It is a model we are comfortable with.”

Under the outpatient center plan, Beaumont would own the property and a developer would build and own the centers. Physicians and Beaumont would form a joint venture and lease the surgery center part of the outpatient center, Wilson said. Physicians would become investors in the joint venture, she said. The developer would lease office space in the center to physicians.

“We are likely to have a developer build the building. It gives more (financial) flexibility for Beaumont” on the projects, Wilson said.

Massive growth projected for outpatient surgery

Fortin, a foot and ankle specialist, said Michigan Orthopaedic is preparing for an expected explosion in outpatient surgeries as payers, employers and patients are demanding more convenient and lower-cost settings. He said many outpatient orthopedic surgery procedures can be just as effective with comparable outcomes as traditional inpatient surgery.

Michigan Orthopaedic, which is participating in a bundled hip and knee replacement program offered by Blue Cross Blue Shield of Michigan, has quadrupled the number of outpatient surgeries over the past 18 months. Priority Health and other payers, including Medicare, are also offering incentives to increase outpatient surgery,

As technology and support services for ambulatory surgeries have improved, Michigan Orthopaedic has increased the number of outpatient surgeries 286 percent from 700 in 2017 to an estimated 2,700 this year, numbers that are expected to grow as more surgeries move into lower-cost outpatient settings.

Wilson said Beaumont also is planning for the transition of inpatient surgeries to outpatient and same-day surgery centers because patients and employers are demanding it.


Posted By: Crain’s Detroit Business on April 11, 2019.  For more information, please click here to read the source article.

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