West Penn To Develop Suburban ‘Mini-Hospital’

February 5, 2010 – In The News
Los Angeles Business Times

The nation’s second-largest hospital network, Allegheny General Hospital, has experienced considerable growth, particularly in orthopedic services, prompting it to move deeper into the suburbs. In the next two years, hospital officials expect a “mini hospital” to be developed where outpatient surgery and other services will be offered. The hope is to cut costs and increase efficiency for these procedures and services through the use of freestanding facilities.

Allegheny Orthopaedics’ hybrid academic model could free doctors from worrying about things like billing and staffing, allowing them to focus on the practice of medicine, according to Edward Kabala. But the pure academic model can appeal to younger doctors who carry a big education debt and worry about risk.

Third-party reimbursement for medical procedures is broken down into payments for building overhead and physician services, so ownership of the proposed facility will determine who pockets the overhead portion, he said.

“The real question is who’s putting up the money for the building and who gets the money from the facility fee,” said Kabala.

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