When a 37-year-old Washington woman recently had surgery to remove a bladder tumor, she chose not to go to a hospital.
Instead, she walked a few blocks from her downtown job to the Center for Ambulatory Surgery Inc. (CASI), located in a 19th street office building sandwiched between MCI Telecommunications Corp. and a Hess shoe store.
After the surgery, she returned to her investment banking job instead of paying the added cost of an overnight hospital stay. "It was so convenient," she said. "Having surgery there was a lot less nerve-racking than if I had to do the hospital routine."
CASI, owned by Washington HealthCare Corp., is just one of the more than 65 ambulatory -- walk-in/walk-out -- surgical centers and emergency clinics that have appeared in the Washington area since the late 1970s. The centers, which are mostly run for profit, streamline costs by keeping overhead low and treating only non-trauma cases. By providing stiff competition to many physicians and hospitals, they are transforming the business of health-care in this region.
The ambulatory care industry is a "marriage between business and medicine," said James R. Roberts, executive director of the Dallas-based National Association for Ambulatory Care. "The industry is going to cause intensified competition across the board," he continued, adding that freestanding medical clinics are the "gatekeepers to the overall health care delivery system in the future."
"More than 60 percent of all surgery that Blue Cross paid for last year in this area is done on an outpatient basis," said Barry Wilson, a spokesman for Blue Cross & Blue Shield, which insures 1.2 million people in metropolitan Washington. Operations ranging from the incision of an eardrum to the removal of a toenail are performed quickly at the surgical centers, and patients either can go back to work or go home to recuperate.
Walk-in emergency clinics, or "emergicenters," also are sprouting in the Washington area. A cross between a private doctor's office and a hospital emergency room, they are 40 to 80 percent less expensive than hospital emergency rooms -- a factor that has turned them into a $1.8 billion-a-year industry nationwide, according to the NAAC's Roberts.
Specific financial figures on the surgical center phenomenon were not available, in part because so many of them are privately owned. But according to the Washington-based Freestanding Ambulatory Surgical Association, by the end of this year, more than 350 freestanding surgical centers -- those not directly connected to a hospital -- will be operating across the country. FASA expects the number of centers to double by 1988 and approach 1,000 by the early 1990s.
While most freestanding surgical centers are owned by large companies, many hospitals also operate one-day surgical units. Similarly, about 40 to 50 percent of the emergency walk-in clinics are owned by private physicians, with the rest owned by large companies and hospitals.
"Eventually the ambulatory care emergency centers business will be dominated by hospitals and large companies," Roberts said. The largest national chain of walk-in medical centers, with 137 clinics, is Humana MedFirst, owned by Humana Inc., a national health-care company based in Louisville, Ken. Another large chain, Florida-based Centra Care, is owned by Adventist HealthSystems and operates about 23 clinics. Profit margins for the successful centers are 10 to 20 percent, Roberts said.
A 1983 study by the Orkand Corp. of Silver Spring projects revenue of $2 billion to $2.5 billion for the industry by 1990. According to that study, average industrywide profits in 1982 were about 13 percent of revenue. The study also concluded that patient volume was growing 20 percent a year with an average of 10,500 visits annually per center.
The number of emergicenters has grown from 260 in 1981 to 2,500 currently, with 45 million patients nationwide. NAAC expects 3,000 clinics to be operating by the end of this year.
Proponents of both ambulatory surgery centers and walk-in emergency clinics argue that they cut health-care costs, keep hospital beds free for the more seriously ill and allow patients to return to their jobs more quickly.
But while a Blue Cross/Blue Shield spokesman said that the quality of care in surgical centers has not been hotly disputed, critics have attacked the emergency clinics, arguing they are ill-equipped to handle life-threatening emergencies and pose a danger to the gravely sick or injured who go to them.
Critics refer to them as "Doc in a Box," "McDoc" or "7-Eleven Medicine," because they offer fast service (for such ailments as colds and flus, back injuries, sprained or broken limbs). For example, the average cost of a hospital emergency room visit is $165, according to Blue Cross/Blue Shield, while the average cost of the Walk-In Medical Clinic on Benning Road NW in the District is $45, according to the clinic's spokesman.
Hospital emergency room costs for minor injury treatment have skyrocketed in recent years to support the backup facilities needed for major trauma cases, several emergicenter operators said. They added that walk-in clinics can charge patients less, in part, because they don't need sophisticated and expensive equipment to treat heart attacks and other critical problems.
Most clinics also keep costs down by demanding payment on the spot. Private insurance and self-payment are the principal sources of payment, according to local centers, and most clinics try not to deal with insurance companies directly. Area clinics add that Medicare, Medicaid and worker's compensation account for a relatively small proportion of their payments.
Walk-in emergency treatment centers are often located in or near shopping centers and most are open 12 to 16 hours a day, seven days a week. For example, one local center, the Walk-In Medical Clinic, is located in Hechinger Mall next to a Radio Shack outlet and advertises and sells its medical treatment much the way the other merchants in the mall sell clothes, eyeglasses, shoes or hamburgers.
Most of the clinics are centered in western and Sun Belt states, where the population is growing, people are more mobile and fewer have private physicians. The NAAC says the centers are opening nationwide at the rate of one a day.
NAAC estimates start-up costs to be $250,000 to $550,000, and says it takes 18 months to three years to recover those costs. The association adds that the centers may provide opportunities for recent medical-school graduates who don't have the resources to go into private practice.
Perhaps not surprisingly, with proliferation of the centers, the criticism has become more intense. Some critics worry that many centers don't have blood banks, laboratory equipment, surgical rooms or monitored inntensive-care beds. And while clinic operators argue that they could stabilize a seriously ill patient and then send him to a hospital by ambulance, critics insist that the delay is critical.
The American Medical Association has criticized these centers for using the term "emergency" in their titles or descriptions unless they have specific emergency capabilities.
The AMA said in a July 1983 report that emergency centers should be open 24 hours, always should be staffed with a physician, registered nurse and other personnel trained in emergency care, should have specific emergency equipment on hand and should have immediate access to a hospital for those critical patients that need care beyond that in the emergicenter.
NAAC accused the AMA of trying to bring "undue economic hardship" on the freestanding centers by "raising our operating costs and destroying our competitive edge."
The emergency center trade group then filed a formal complaint with the Federal Trade Commission, arguing that the AMA guidelines are "overbroad, restrictive and unwarranted," and "to limit the use of the term emergency infringes upon certain freedom issues, as well as suggesting that patients themselves are unable to properly decide when and where they should seek medical attention." The case ultimately was dismissed by the FTC because the AMA recommendations were simply guidelines.
Besides the AMA guidelines no other uniformly accepted criteria for the emergicenters exists. The clinics are not regulated, and licensing varies from state to state. The comprehensiveness of emergency services provided, ownership, institutional affiliations, staffing and method of financing vary significantly.
Although the NAAC's Roberts said that less than 1 percent of the center patients are considered life-threatening emergencies, the trade association has deleted the word "emergency" from its original name (National Association of Freestanding Emergency Centers). He added that the industry is evolving to be providers of primary care rather than just emergency care.
Roberts points to estimates that ambulatory centers eventually will capture as much as one-quarter of the nation's primary care business. Feeling that competition, many hospitals are opening satellite walk-in medical clinics. The freestanding clinics also are beginning to cut into the private physician's market because of their low costs and convenience, causing some private physicians to extend their hours and expand services, Roberts said.
To slow their proliferation, some states are trying to regulate the centers or force them to obtain a "certificate of need," which is required for hospitals but not doctors. The NAAC opposes any such regulation. "It's an economic tax upon the industry, which will decrease competition -- the solution to the health care cost crisis in this country," Roberts asserted.