The ongoing trend of surgeries being performed outside traditional hospitals shows no signs of slowing in Pennsylvania -- a trend that some feel is contributing to increased health care costs.

		Graphic: Surgery centers growing

Between June 2005 and May 2006, 25 new surgery centers opened in Pennsylvania, bringing the total statewide to 202 -- a big jump from the 44 in operation in 1996, according to a report from the Pennsylvania Health Care Cost Containment Council.

The report notes the average profit margin at such surgery centers was 20.87 percent in fiscal 2005, meaning they earn 20.87 cents on every dollar of revenue, up 9.4 points in four years.

"Profit margins statewide [at surgery centers] have nearly doubled," noted Marc P. Volavka, executive director of the council, an independent state agency that collects information with the intent of improving the quality and restraining the cost of health care in Pennsylvania. "Surgery centers in Pennsylvania continue to proliferate."

Carolyn F. Scanlan, president of the Hospital & Healthsystem Association of Pennsylvania, said the growth should prompt legislators and regulators to consider whether surgery centers are contributing to the overall growth in health-care costs.

"As the state's population has remained relatively stable, the number of outpatient procedures has increased by 34.5 percent in the past five years -- with nearly three-fourths of that growth occurring in [surgery centers]," she said.

"Ambulatory surgery centers now outnumber general acute care hospitals."

Officials with state and national organizations that represent surgery centers could not be reached for comment.

But surgery center operators argue that, in general, they help lower health costs by providing care without the overhead costs that come with hospital-based care.

A study released last year by FASA, a Virginia-based group that represents surgery centers, found that Medicare pays on average $320 less per surgery when the procedure is performed in a surgery center rather than a hospital outpatient department.

Dr. Robert Fusco, the owner of Three Rivers Endoscopy in Moon, said surgery centers can provide care more efficiently than hospitals, and that patients both notice and appreciate the difference.

The report, which is being released today, also notes the financial success of rehabilitation, psychiatric and long-term acute care hospitals.

All three types of facilities have experienced record amounts of income during the past two years, due in part to changes in Medicare regulations, notes the cost containment council.

Rehabilitation hospitals reported an average total profit margin of 12.44 percent, while psychiatric hospitals saw an average total profit margin of 3.08 percent -- the highest seen in more than 10 years.

The number of medical-surgical beds in long-term acute care hospitals has more than tripled from 327 in fiscal 1996 to 1,046 in fiscal 2005.

Long-term acute care hospitals are licensed separately from general hospitals and typically treat patients for more than 25 days.

To Cliff Shannon, a board member at the council, the growth and profitability of surgery centers remains the most visible issue for employers and others who pay for health care.

Other reports suggest that surgery centers skim the lowest-risk patients, he said, which both helps the bottom line at the centers and threatens the financial health of hospitals.

The council's report finds that surgery centers have grown at a slower pace in the Pittsburgh region than any other part of the state.

But there's still reason for concern here, Mr. Shannon said.

"We may be slow to the party, but it's coming," he said.