A relatively new joint venture between Hoag Hospital Irvine and a pair of local orthopedic surgery groups has hit the ground running.
Hoag Orthopedic Institute, which opened about 18 months ago, is now doing about 15,000 to 16,000 of bone, spine and other surgeries a year. That’s second in the nation among orthopedic-focused hospitals, executives said, behind the Hospital for Special Surgery in New York, which was founded in 1863 and claims to be the oldest orthopedic hospital in the nation.
Hoag Orthopedic’s main facility is at Hoag Hospital Irvine, with two outpatient centers in Newport Beach and Orange.
“It’s been an incredibly roller-coaster ride experience,” said Alan Beyer, an orthopedic surgeon who is one of its principal physicians.
The institute came about when Beyer’s practice, Newport Orthopedic Institute, and Orthopedic Specialty Institute of Orange linked with Hoag Irvine.
Newport Orthopedic and Orthopedic Specialty both operated outpatient surgery centers, Beyer said.
“We felt we were pretty darn good at that, which was why Hoag gave us the opportunity to go the next step (with) the inpatient side,” he said.
Hoag already was a partner in Newport Orthopedic’s outpatient surgery center.
“The trust was there, the years of working together (were) there, and when this building became available … it was like a light switch just went on and (we) said, ‘Well, let’s use this as a vehicle to do the orthopedic thing,’ ” Beyer said.
The institute is governed by a board made up of Hoag Irvine representatives and doctors.
Hoag Orthopedic began taking patients in November 2010. Beyer said that the institute did not market itself in its first year of operation because it wanted to make sure it generated performance data before going “to brag about it.”
“True Efficiency”
James Caillouette, the institute’s chief surgeon, is one of the founding principals of the institute.
“The vision is really driven by creating true efficiency,” Caillouette said. “What that means is that we wanted to create a delivery system that eliminated a lot of the inherent friction that exists between hospitals, and doctors, and implant companies and all those sorts of things.”
Hoag Orthopedic Institute’s main facility has 70 beds and nine dedicated operating rooms, along with two outpatient surgery centers in Newport Beach and Irvine.
The institute has about 350 workers. There are about 120 staff physicians in total, including about 35 orthopedic surgeons who are members of Newport Orthopedic or Orthopedic Specialty. The other doctors on staff include hospitalists, radiologists and anesthesiologists.
Procedures include joint replacements, spinal surgery and trauma surgery.
Orthopedic medicine is a big part of Hoag Irvine, which opened in September 2010.
Hoag Memorial Presbyterian in Newport Beach spent $84 million to transform the former Irvine Regional Hospital and Medical Center into Hoag Irvine. Tenet Healthcare Corp. of Dallas had shuttered the center in a settlement with Long Beach-based landlord HCP Inc.
Hospital executives cited orthopedics as a growing field for the facility, and said at the time that they expected steady growth as baby boomers get older and seek age-related surgeries such as hip replacements.
Hoag Orthopedic’s early success could eventually lead to the development of more specialty hospitals in Orange County, according to Mitch Morris, a principal in Deloitte Consulting LLP’s life sciences and healthcare practice in Costa Mesa.
“I think there (are) going to be more specialty hospitals (that) emerge,” Morris said, adding that he expects the county to eventually have a dedicated cancer hospital along the lines of City of Hope in Duarte, as well as a heart hospital.
Caillouette and Beyer emphasized that they want to avoid a perception of “cherry picking,” which is a common criticism aimed at specialty hospitals with physician ownership. Cherry picking refers to the practice of only taking patients with private insurance or the ability to pay cash for their care.
“(If) somebody needs to have something done, we do it—we don’t look at what their payer class is,” Beyer said.
Medicare
He noted that the institute does accept Medicare, although it loses money in such cases.
Hoag Orthopedic does not disclose revenue. Caillouette said he projects that it will deliver $10 million in uncompensated care by the end of 2012.
That “flies in the face of the criticism” that physician-owned specialty hospitals “cherry pick” their patients, Caillouette said.
The institute’s patients aren’t just Medicare-age, either. Beyer said that about half the hospital’s joint replacement patients are 40 to 65 years old.
