A new hospital opening in September on the cusp of Austin and Round Rock aims to change the landscape of not only patient care but also physician involvement.

“In 25 years at my other hospitals, there’s the hospital and the doctors,” said John O’Neill, CEO of Forest Park Medical Center-Austin. “There wasn’t always close coordination and communication between the two, and there really has to be.”

FPMC is a group of five physician-owned hospitals that began in Dallas in 2009. Austin will be sixth facility and will have about 100 physicians who have a financial stake in the facility. O’Neill said most physician investors are local and already work in the Austin area. Their ability to have direct input in hospital operations and patient care ultimately will lead to a better patient experience, he said.

“We’ll give patients a better experience because of the staff we hire, the physicians, the input, the way it’s been designed,” he said. “Everything about this place will be a better experience to the patients at the same [medical] cost.”

Staff- and patient-centric

FPMC-Austin will have 46 patient beds, 10 operating rooms, an emergency room, a lab, pharmacy and cafeteria. The facility was designed by the Neal Richards Group, which purchased roughly 55 acres surrounding the hospital to develop a mixed-use center similar to The Domain. The hospital and adjoining 80,000-square-foot medical office building are the first piece.

O’Neill said NRG also met with the Austin physicians to incorporate their feedback. Everything from the location of bathrooms in the ICU rooms to the infection-control stations near the ORs was designed with staff and patient needs in mind.

“[The physicians’] biggest input was probably in the OR because that’s where they live and work and where patients need the most critical care,” he said.

FPMC is an elective surgery hospital, but it will have a 24/7 emergency room to handle any trauma, O’Neill said. FPMC-Austin has transfer agreements with Baylor Scott & White Health and Cedar Park Regional Medical Center for patients requiring emergency surgery in fields FPMC does not treat, such as cardiology or labor and delivery. The hospital will also be in-network with most major health insurers, so costs will be about the same as other hospitals, O’Neill said.

Physician-owned status

A section in the Affordable Care Act, also known as Obamacare, prohibits any new physician-owned hospitals from accepting Medicare or Medicaid patients.

Before this clause went into effect, it was easier to open physician-owned facilities in Texas because the state does not have a certificate of need law, meaning an organization does not need state approval to open a hospital. Physician-owned hospitals in operation before the act went into effect may not expand without being affected by Medicare and Medicaid restrictions.

Dr. Bobby Hillert, executive director of the Texas Orthopaedic Association and a Texas Medical Association member, said physicians can still play a role in ownership of a hospital through joint ventures with nonprofit and for-profit health care systems.

“The physician ownership of facilities plays an important role in the Texas health care delivery system,” he said.

Competitive landscape

FPMC-Austin will have the greatest effect on St. David’s HealthCare North Austin Medical Center and Round Rock campuses because of its proximity and number of physicians leaving for FPMC, O’Neill said.

Representatives from St. David’s declined to be interviewed on the opening of the new hospital. St. David’s instead released a statement.

“For more than 90 years, Central Texans have trusted St. David’s with their health care needs, and we do not expect that to change because of a small specialty hospital coming into the community,” the statement said.

Seton Healthcare Family also declined to respond. Baylor Scott & White Health also released a statement.

“It is common for Baylor Scott & White Health facilities to have transfer agreements in place to facilitate the support of all people within the community,” the statement said.

In Frisco, where FPMC opened in 2012, physician investor Dr. Joe Valenti said the reaction from area hospitals systems was “nothing short of hostile.” He said many physicians left other hospitals to work at FPMC because of the physician-friendly environment.

“At a physician-owned hospital the first thing on anyone’s mind is always the patients,” Valenti said.

Some physician-owned facilities are limited in size or services they can offer, but Valenti said the tradeoff is more receptive staff resulting in better patient care. He added the facilities also create jobs and add to the tax base because physician-owned facilities have to pay taxes, unlike hospital systems run by nonprofits.

“Patients need to be aware in supporting physician-owned hospitals­—they’re supporting private practice and keeping physicians independent,” he said.

O’Neill said competition among hospitals ultimately will benefit patients.

“Everybody sort of ups their game, and that’s good for the community because they want to get the patients back,” he said.

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