Hartford Hospital is planning a major expansion of its orthopedics business to rival nearby competitors, with the addition including a new $6.5 million ambulatory surgery center on its Seymour Street campus and the creation of a comprehensive musculoskeletal institute.
The new facility, called HHC Hartford Surgery Center, will be owned jointly by Hartford Hospital and its affiliated orthopedic surgeons, and heighten competition with cross town rival Connecticut Joint Replacement Institute (CJRI) at St. Francis Hospital and Medical Center, which is a major player in hip and knee replacements.
The proposed expansion comes at a time when demand for orthopedic services is expected to increase significantly because of the state’s aging and increasingly obese population.
Hartford Hospital is also shifting more of its orthopedic procedures to ambulatory care centers, thought to be a more cost-effective setting than a traditional hospital.
“Given a growing need and demand for high value cost-effective orthopedic services, the Hospital is committed to maintaining its status as a destination center for advanced orthopedic services and servicing such needs,” Hartford Hospital said in its project proposal, which requires regulatory approval by the state Office of Health Care Access.
Hartford Hospital officials declined to comment for this story, but a project outline obtained by Hartford Business Journal says the new ambulatory center will house three fully equipped operating rooms and shell space for two additional rooms.
The building will also be home to a musculoskeletal institute that will engage in clinical research and provide education opportunities to medical students and residents, documents said.
The extra space is needed, in part, because Hartford Hospital has been aggressively recruiting physicians. They’ve hired 10 orthopedic surgeons in the last year, who will add 1,700 additional surgical cases.
Hartford Hospital will own a 51 percent stake in HHC Hartford Surgery Center LLC. Surgeons affiliated with the hospital and Constitution Surgery Centers will own the remaining shares, documents said.
The orthopedics surgery business, which includes procedures like knee, shoulder, and hip replacements, has experienced steady growth nationally and regionally.
Virginia consulting firm The Advisory Board Company projects outpatient orthopedic surgery procedures will grow 23 percent over the next 10 years because of the aging U.S. population and a rise in obesity, which leads to joint problems in overweight people.
Connecticut is expected to see similar trend lines.
Hartford Hospital currently has 42 operating rooms on its Seymour Street campus, but only eight rooms are dedicated to outpatient surgery, where the hospital wants to shift more of its orthopedic procedures. It’s a trend that has taken hold nationally, as the healthcare industry pushes to deliver care in more cost-effective settings.
It costs, on average, 35 percent less to have an orthopedic procedure done in an ambulatory surgery center compared to a regular hospital, which has higher overhead costs, according to the Ambulatory Surgery Center Association.
Medicare, for example, reimburses hospitals $1,689.29 for an arthroscopic knee surgery, while ambulatory surgery centers receive $1,098.16.
Madhavi Kasinadhuni, a consultant at The Advisory Board Company, said hospitals are increasingly adding or buying ambulatory centers because their patients are moving to that lower cost setting for service.
“Hospitals want to gain a foothold in the outpatient market to capture some of that volume,” Kasinadhuni said.
The orthopedic surgery business is competitive. The nationally recognized Connecticut Joint Replacement Institute (CJRI) at St. Francis Hospital and Medical Center performs about 2,600 to 2,700 hip and knee surgeries annually.
CJRI executive director Dr. Kim Beekman said surgical procedure growth rates have flat lined in recent years because the economy forced people to put off elective procedures, but they anticipate greater demand for services in the future as Baby Boomers increasingly turn 50.
“From 2008 to 2020, 8 million people in the U.S. will be candidates for joint replacement,” Beekman said.
CJRI is housed in St. Francis Hospital’s 10-story John T. O’Connell Tower on Woodland St., which includes six operating rooms and two inpatient floors with 33 private rooms each, Beekman said. The hospital also has shell space for two more operating rooms in anticipation of greater demand.
As that demand increases, however, there is a concern about surgeon shortages in the state.
Michael Marks, a spokesman for the American Academy of Orthopedic Surgeons and Norwalk Hospital’s vice president of business development, said there are only about 230 orthopedic surgeons in the state, and increasing demand for hip and knee replacements, and other related procedures, will likely create the need for at least 200 more doctors.
Connecticut’s high cost of living, however, makes it difficult to woo surgeons from other states, particularly when reimbursement rates from government and commercial payers are typically the same regardless of where a physician practices.
At the same time, Connecticut has one of the oldest orthopedic workforces in the country.
“The challenge is finding physicians willing to come to Connecticut to start a practice here,” Marks said. “We have a hard time recruiting younger surgeons. It’s a huge issue because with all the new regulations coming out with healthcare reform, lots of older surgeons are thinking about retirement.”
