Eye Center Approved Despite Protest

Crain's Health Pulse
May 30. 2014
Eye Center Approved Despite Protest

An eye surgeon's quest to open his own ambulatory surgical center at 20 W. 13th St.cleared a hurdle May 22, but not before that doctor's hospital protested it could hurt its own business.

At last week's project review committee meeting of the Public Health and Health Planning Council, members voted to approve construction of Union Square Surgery Center, a leased 3,300-square-foot facility with one operating room. Dr. John Khadem is the owner. The project's cost is $1.9 million.
Dr. Khadem, who sent 183 patients last year to the New York Eye and Ear Infirmary, said in his certificate-of-need application that he will also send his surgery center patients to Manhattan Eye, Ear and Throat Hospital, a division of North Shore-LIJ's Lenox Hill Hospital. At the meeting, representatives of NY Eye and Ear, part of the Mount Sinai Health System, said that hospital would lose about a half-million dollars in annual revenue if the application was approved. The hospital netted $17 million in 2012 and $10 million in 2013, and predicted another drop in 2014.

NY Eye and Ear representatives also pointed out that Medicaid pays more whenever an ambulatory surgery center treats patients who could otherwise be cared for in an office setting. Other committee members pointed out that even though ASCs get higher payments, through a state surcharge, part of that money goes into a general fund that is redistributed to hospitals. Committee chairman Jeffrey Kraut said that while he agreed care in ASCs is costly, "I've given up on making that argument" in part because their patient safety is better.

Mr. Kraut noted that even if NY Eye and Ear lost 183 out of its total case volume of around 31,000, that is less than 0.6% of its patient tally.

"If we accept your argument, that would be a standard for turning down proposals," he said. That tactic would not be popular with the hospital's corporate parent if it wants to open a new facility. The ASC proposal goes to the full council in June.

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