Medical center opens acute-care facility

Arise Austin Medical Center purchased all of the assets—licenses, permits and equipment—of Austin Surgical Hospital and finished the resyndication process July 15, AAMC CEO Diana Zamora said.

Zamora said that by resyndicating, the hospital allowed for a smoother transition and for quicker asset transactions. The resyndication also let AAMC purchase the facility without acquiring any of the previous owner's debt.

The 23-bed, 55,192-square-foot facility at 3003 Bee Caves Road is a Medicare-accredited and -grandfathered facility that will continue to accept all major insurance payers, Zamora said.

"We are sort of unique [among physician-owned hospitals] in that we can see Medicare patients and not have to screen them," Zamora said. "That's really the big difference. A lot of physician-owned hospitals are not Medicare-accredited and have to go out of network. We can see and service that entire population."

Physician-owned hospitals

Zamora said there are obstacles physician-owned hospitals face that other medical facilities do not.

"I think one [of the challenges] is getting the word out and making sure people understand that you are a hospital and you service patients just like any hospital would," she said.

Dr. Robert Wills, Arise Healthcare founder and chief investment officer, said physician-owned hospitals have struggled to serve as an alternative to large, privately held hospital systems since federal laws changed in 2010. Because of the change in laws, no new physician-owned hospitals that accept Medicare and other federally based health insurance plans have been developed.

Wills said this has resulted in an open market for larger hospitals to target and employ previously independent physicians and physician groups, a decision often made reluctantly by many physicians, just to stay afloat.

Zamora said that in addition to challenges, being a physician-owned hospital has its benefits.

"I think [there] is much more individualized care [at a physician-owned hospital]," Zamora said. "The patient-to-nurse ratio is smaller, the attention to detail and the time we spend with patients [is increased]."

Arise Healthcare CEO Jared Leger said when physicians have direct ownership in a hospital, they pay attention to the expense of providing medical care. When doctors are engaged in all the details of a hospital's operation, positive patient outcomes increase and hospital expenses decline, he said.

Zamora said patients get to have a connection with the physician, and the hospital gets to learn about the physician.

"It's a smaller number of physicians, but we get to learn all their nuances," she said. "We like to be able to say that our patients leave feeling cared for."

Difference from previous owners

Previous hospitals at this location have faced financial challenges, Zamora said.

According to a news release, the hospital was built in 1997 by the Renaissance Women's Center and closed in 2001 because of financial problems. OrthoNeuro Corp. purchased the hospital, and the site became the Surgical Hospital of Austin in 2002, later changing its name to Austin Surgical Hospital.

In 2009, Symbion Inc. purchased a majority stake of the hospital from Hospital Partners of America, which filed for Chapter 11 bankruptcy protection, according to a news release.

Arise Healthcare purchased assets from Symbion but did not assume any of the outstanding debt, an important factor, Zamora said.

Leger said not assuming any of the hospital's debt is a key distinction between AAMC and the previous owners.

"It enables us to start with a clean slate," he said.

Other ventures

Arise Healthcare, an affiliate of AAMC, manages and develops health care facilities and health care–related businesses throughout the Austin area. Arise owns and operates Cedar Park Surgery Center, Hays Surgery Center in Kyle, and Stonegate Surgery Center in South Austin. Most recently Arise built Medical Tower at River Place in the Four Points area.

"[These facilities] fit in with our global vision," Zamora said. "Our first goal is to serve the patients in this hospital, but [the other facilities] will operate as departments of the hospital."

Medical Tower at River Place will have an outpatient imaging and women's services department, Zamora said.

"One of our thoughts about delivering health care differently in this community is that we are not the institutional large tower—we are a smaller facility where we can have the high-touch patient experience," she said. "We want to be able to reach out in the communities where our patients live to deliver care in their communities. [These facilities] are the way we plan to [do that]."

Zamora said the hospital will look at what services different neighborhoods need and try to fill those needs. The idea mirrors shopping malls, she said.

"What do consumers want? They want something that is easily accessible and personal," Zamora said. "There is no reason that health care shouldn't be the same."

Changes to services

The full-service hospital is undergoing some changes to what services are offered, Zamora said.

"The biggest change is that we are not doing cosmetic plastic surgery any longer," she said.

In addition to eliminating cosmetic plastic surgery, the hospital is shifting its focus to retool and update its operating room and related capabilities to focus on neurosurgical brain and spine surgery, general surgery, orthopedics, bariatric surgery, urological surgery and pain management.

"We are really expanding services [Austin Surgical Hosptial provided] but perhaps didn't do them as comprehensively as we will be doing," Zamora said.

The only service line the hospital will be adding is the da Vinci robotic surgery service, she said. The robotics-assisted program will service urology, gynecology and general surgery, she said.

Zamora said all of the changes the hospital is undergoing makes it a great place to go for health care.

"We really feel that there is a place for us here," Zamora said. "We really pride ourselves on the fact that we are different. We are going to stand up for our ability to be here and do this differently."