Archive July 2019 XX, No. 7

Business Advisor: 3 Rival Hospitals Own the Same Surgery Center

Partner with your competitors is the name of the game in Pocatello, Idaho.

Ryan Hope

Ryan Hope, MD

BIO

SWIMMING WITH THE SHARKS
Amanda Hope/Skyline Surgery Center
SKY'S THE LIMIT Skyline Surgery Center in Pocatello, Idaho, expects to add 200-plus cases a month after forming a unique joint venture with 3 neighboring hospitals.

We're a couple months into our unlikely — and unprecedented — partnership in which 3 rival hospitals within a 50-mile radius own and use the same ambulatory surgery center. Yes, you heard right. Rather than each building its own ASC, 3 hospitals that used to compete for cases, contracts, surgeons and staff are now living under the same roof here at Skyline Surgery Center in Pocatello, Idaho. The collaborate-rather-than-compete idea is so crazy it just might work.

For our first 6 years, Skyline partnered with Bingham Memorial Hospital in a standard hospital-ASC joint venture. Only independent surgeons and Bingham-affiliated surgeons could use our facility. Meanwhile, Portneuf Medical Center and Mountain View Hospital each considered building their own ASCs to compete against us.

But after running the financials, the hospitals saw it made much more sense to partner with us. Thus was born the 3-hospital-physician joint venture. Each hospital has a 17% ownership interest totaling 51%, and a group of physicians owns 49%. (Before the merger, Skyline was 70% physician-owned while Bingham Hospital held 30%.)

In opening our doors to Portneuf and Mountain View, they, too, can enjoy the convenience and comfort of an ASC, as well as its bargaining power. Now that Portneuf has an ASC in its system, the 205-bed hospital can contract with insurers that want a low-cost alternative to hospitals for surgical care.

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