Arise Opens New Physician-Owned Hospital in Austin

An affiliate of Arise Healthcare is opening a new, acute care hospital with a physician-owned structure in West Austin.

The hospital, named Arise Austin Medical Center, aims to provide the Austin community a new choice in their healthcare. Arise Austin Medical Center will operate at 3003 Bee Cave Road, at the site of the former Austin Surgical Hospital.

Arise Healthcare has purchased all of the assets of Austin Surgical Hospital which includes the licenses, registrations, permits, equipment and tangible property. The transaction is slated to close on June 30. As of July 1, the hospital will be resyndicated and start operating as Arise Austin Medical Center. Employees, approximately 100 in all, immediately become employees of the new hospital as well.

The 23-bed, 55,192-square-foot hospital features an ideal location, about one mile west of MoPac Expressway in Rollingwood. The new full service hospital will continue to accept all major insurance payers including Medicare and Medicaid, and will re-tool and update its operating room and related capabilities to focus on neurosurgical brain and spine surgery, general surgery, orthopedics, bariatric surgery, urological surgery, and pain management.

“There’s a great conviction and commitment on our part to ensure this hospital succeeds,” said Dr. Robert Wills, founder and chief investment officer of Arise Healthcare. Dr. Wills is also a practicing physician and founder of Austin Pain Associates. “We aim to do that by attracting physicians that want to practice medicine in a patient-centered, financially-independent manner.”

Arise Healthcare has tapped Diana Zamora to serve as the hospital’s new CEO. Zamora has more than 15 years of industry experience, most recently as the senior director of operations at Tenet Healthcare Corp., where she helped create an outpatient division. Prior to that, she was the vice president of operations at HealthSouth, where she oversaw three hospitals and 11 surgery centers.

Zamora says step one will be to comb through finances and increase operational efficiencies. The hospital has a well-documented history of fmancial challenges. It was built and opened in 1997 by the Renaissance Women’s Center, and closed in February 2001 because offmancial problems. It was purchased by OrthoNeuro Corp. became the Surgical Hospital of Austin in 2002; its name was quickly changed to Austin Surgical Hospital. In 2009, Symbion Inc. bought a majority stake from the hospital’s previous majority stakeholder, Hospital Partners of America, or HPA, which filed for Chapter 11 bankruptcy protection the prior year.

Arise Healthcare has now purchased the assets from Symbion; however, unlike previous owners, it is not assuming the debt. Debt has loomed over the hospital since inception and was passed down to every ownership entity until now.

“That’s a key distinction, and one that enables us to start with a clean slate,” said Jared Leger, CEO of Arise Healthcare. Further fmancial details aren’t being disclosed. Wills acknowledges Arise Healthcare’s management team will have a lot of eyes in the medical community watching to see how the hospital performs.

“The location has never been in question, and we hope to bring the right mix of doctors, medical services and fmancial acumen to ensure long-term viability,” Dr. Wills said.

Leger notes physician interest is already high because of Arise Healthcare’s success in the Austin market. Launched in 2009, Arise Healthcare owns, manages and develops healthcare facilities and healthcare relates businesses. It owns and operates three outpatient surgery centers in the Austin area: Cedar Park Surgery Center, Hays Surgery Center in Kyle and Stonegate Surgery Center in South Austin. Each surgery center is majority owned by physicians.

“Each center is beating all financial projections, and we’re confident our newest hospital will attract like-minded Austin-area physicians once again because of our successful track record,” Leger said.

Dr. Wills notes that physician-owned hospitals have struggled to serve as an alternative to large privately held hospital systems since federal laws changed in 2010. Due to the change in federal law, no new physician owned hospitals that accept Medicare and other federally-based health insurance plans such as Tricare, have been developed. One result has been an open market for hospital industry titans to target and employ previously independent physicians and physician groups, a decision often made reluctantly by many physicians, just to stay afloat.

When physicians have direct ownership in a hospital, they pay attention to the expense of providing hospital based medical care, starting with administrative cost, the cost of billing and collections, all the way to the cost of providing optimal patient care in the operating rooms and hospital floors, Leger notes. When doctors are engaged in all the details of a hospital operation,patient outcomes soar, and hospital expenses decline.

There are more than 260 hospitals owned by doctors in 33 states, according to industry trade group Physician Hospitals of America, which notes Texas is one of five states where they are most prevalent.

Of 161 physician-owned hospitals eligible to participate in the health law’s quality programs, 76 percent met or exceeded all the quality metrics while 74 percent of corporate hospitals (ones that did not have physician owners) failed to meet these quality metrics, a Kaiser Health News analysis shows. This is further evidence that physician involvement in the full scope of healthcare delivery benefits the patient and the healthcare system as a whole.

“Doctors face tremendous financial pressures these days, yet we don’t want delivery of care to become homogenous and mechanical,” Dr. Wills said. “Competition is an intrinsic part of the American way, and it’s imperative that it remain alive within the healthcare industry. We aim to offer doctors a viable option for remaining in the driver’s seat with regards to calling the shots over medical care. Our patients are the first and foremost beneficiary of this type of control over their healthcare delivery.”

Zamora notes doctors aren’t the only ones that benefit.

“Patients are also often looking for an alternative to large, institutional hospitals,” Zamora said. “This is a delivery model that is attractive to both our physicians and our patients and one that is proven to provide high quality, cost effective care.”

About Arise Healthcare
Arise Healthcare owns, manages, and develops healthcare facilities and healthcare care related businesses. Its team of professionals have decades of experience managing healthcare businesses. This includes clinical services, finance, and operations of numerous successful healthcare facilities. For more information, visit: www.arisehealthcare.com.