MONTGOMERY, Ala. — Plans for a new surgery center in east Montgomery were put on hold Wednesday for at least a month after the project drew considerable opposition during a meeting of the Alabama Certificate of Need Review Board in Montgomery.
The Southern Orthopaedic Surgery Center would be a non-hospital based ambulatory surgery center, or ASC, specializing in orthopedics and neurosurgery. While the project’s proponents say the center would help improve health care quality and physician recruitment while lowering consumer costs in the area, its opponents, which include several local health care providers, say it could be “devastating” for the city’s existing health care providers.
“We already have an existing, fragile health care system in Montgomery,” said Jim Williams, an attorney representing Baptist Hospital, one of the health care providers opposed to the project.
“There’s no population growth (in Montgomery), we already have 50 (orthopedic surgeons), so we ask that you deny this project because it’s not needed and it’s going to be detrimental and devastating to the existing health care system that we have here.”

Were the project to move forward, Williams said that Baptist Hospital and its subsidiary Montgomery Surgical Center could take an estimated financial loss of between $6.5 and $7.6 million per year, and that the hospital’s joint center would likely shut down.
“We have a joint center that we built for these physicians to do the kind of surgeries they want to do, spent $3 million, and if they get this surgery center?” Williams said. “It’ll be gone, long gone, there won’t be any need for it any more.”
Before appearing before the CON Review Board, the proposal for the new surgery center was vetted by an administrative law judge, who ultimately determined that the project met the criteria to receive approval from the board, something Colin Luke, attorney for the Southern Orthopaedic Surgery Center, stressed during Wednesday’s hearing.
“We think it’s vital for the continuation of orthopedic care in Montgomery, we think it’s necessary for recruitment because I hear from the doctors, not from the lawyers, about these issues, (that) it is going to be an answer for some of the problems we’re experiencing in Montgomery,” Luke said.
“If we don’t approve this project, we’re afraid patients will have to leave Montgomery, go to Birmingham, Atlanta, or locations out of state.”

Behind the project are a number of orthopedic surgeons who currently provide 24/7 trauma coverage for orthopedic care at Baptist Hospital, who Luke said hold 51% ownership of the newly established company.
U.S. Orthopaedic Partners, a management services organization owned by private equity firms, also holds partial partnership of the new company, something the proposal’s opponents expressed concern over, and noted as a barrier to partnering with the surgeons to expand orthopedic services within the Baptist Hospital system.
“There’s a little reluctance on the part of Baptist to enter into an agreement with some company that acknowledges that they are going to flip it when they make some money, I mean that’s why private equity’s about, right?” Williams said. “Nothing wrong with that, but it is something wrong (for) Baptist.”
Luke asserted that Southern Orthopaedic Surgery Center was majority-owned by surgeons, and thus could not be sold without their consent.
Swaid Swaid, the chair of the CON Review Board, asked Luke to provide documentation proving his claim to be accurate, something he pledged to do after the hearing.

Other opponents included Greg Everett, an attorney representing Jackson Hospital and Clinic and the Jackson Surgery Center. Jackson Hospital has been in financial hardship in recent months, with its bond rating having been lowered to a “D” after it defaulted on bond interest payments in September.
“Staff is short in Montgomery; we start adding more providers, where are we going to get all the staff from?” Everett said. “Jackson is open for business, Jackson Surgery Center is open for business, why do we need to make it harder for them to be open for business is our question for you today.”
Swaid pressed the two parties to continue to explore opportunities for collaboration, a potential alternative to launching a new, standalone surgery center in Montgomery.
Perry Hooper, one of the doctors behind the proposed surgery center, said a collaboration with Baptist Hospital would be “extremely difficult” given what he characterized as their initial reluctance to cooperate on any sort of partnership.
Luke said the group of surgeons first sought out a collaboration with Baptist Hospital but were turned down.
“We would have loved to have done this project as a partnership with Baptist; we tried time and time again to partner with Baptist, and they said no, so we’re not going to do it,” Luke said.
Peck Fox, an attorney representing Montgomery Surgery Center, pushed back on Luke’s comments, noting that contractual obligations would have made any form of collaboration difficult.
“There were no discussions about how to get around the operating agreement which prevents Baptist, or any of the owners, from participating in another ambulatory surgery center within 25 miles, so that was one of the reasons Baptist couldn’t participate in it,” Fox said. “We’re contractually forbidden from doing another surgery center, unless we could get the other 32 doctors (at Montgomery Surgery Center who hold partial ownership of the facility) to agree.”
At least one involved party, Peter Selman, CEO of Baptist Medical Center South, did express hope that a collaboration between the parties could still be achieved.
“We would like to consider opportunities to partner with them, our joint center only operates Monday through Thursday, it sits completely vacant on Fridays, we have extra capacity there, we have capacity at Montgomery Surgery Center,” Selman said.
“Instead of building a $40 million freestanding surgery center, we could expand the existing Montgomery Surgery Center, we have had discussions but those have stalled out, (but) I think we can come back to the table.”
Upon hearing well over an hour of debate, CON Review Board member Randy Jones made a motion to table the matter until the board’s meeting in December, with the hope that an agreement between the parties could be reached.
“My concern right now is just the state of health care in this entire state, so I hope that you guys can work something out because Jackson Hospital is very important to the population of this community, and what I’m hearing is that you all are in dire straits right now,” Jones said. “I would like to see if Baptist could come back (with) this great group of doctors (to see) what can be worked out among them to make this work. And if it’s not, next month we hit this thing head on.”