Wichita ? Robert Miller is the kind of patient hospitals love.

It’s not just the positive attitude the 80-year-old displays as he prepares to leave after coronary bypass surgery.

“I feel great,” he declares, the fresh scar from the operation peeking from above his pale blue gown.

It’s also that he recuperated fast enough to check out after six days. Medicare estimates the average hospital stay for such an operation at nine days — and pays accordingly. So Galichia Heart Hospital probably made money treating Miller, whose case helps point out the concerns raised by the proliferation of so-called specialty hospitals.

Specialty hospitals like Galichia offer services in particularly lucrative areas of medicine such as cardiology and orthopedics. Critics contend they also cherry-pick the healthiest patients, depriving general hospitals of income needed to offset losses from treating more seriously ill patients such as burn victims and the chronically sick.

While specialty hospitals have long existed, traditionally they were nonprofit centers for treatment, research and teaching of a certain, often especially challenging type of medicine.

Now, they are geared to make money, and their owners often include doctors who can direct some of their own patients to these institutions.

Legislation is pending

An amendment that would forbid doctors from investing in specialty hospitals has been attached to Medicare reform legislation in Congress. The measure is designed to help lessen the impact of these facilities on general hospitals.

Randall Nyp stands in the emergency room at Via Christi Regional Medical Center in Wichita. Nyp, who is president and chief executive at the hospital, says that hospitals specializing in high-profit heart and spine procedures are hurting revenues at large hospitals, making it harder to keep high-cost services like emergency rooms and burn units open.

“Patients don’t think about all the strain specialty hospitals cause,” said Randall Nyp, president and chief executive of Via Christi Regional Medical Center, which runs a nonprofit acute care hospital in Wichita.

“They won’t think about it until they have to go the emergency room and it isn’t there” because it was shut down as too expensive to run, he said.

Doctor-owners of specialty hospitals say they grew weary of the bureaucracies at large institutions, where ordering new equipment or even scheduling surgery can be an ordeal. They deny that they are treating only profitable patients and insist that they also care for the uninsured. Profits, they say, are derived from more efficient operations.

“Opening a specialty hospital gave me the ability to deliver better care,” said Dr. Joseph Galichia, who owns 20 percent of the hospital that bears his name. “It is easier for me and the other doctors to practice in our facility. The equipment is excellent. The personnel is excellent.”

Although there is some evidence that specialty hospitals provide better care, general hospitals question that claim. They have found a champion in Sen. John Breaux, D-La., who co-sponsored the Medicare amendment.

Statistics questioned

Breaux said he acted after a General Accounting Office report in May showed that about 70 percent of specialty hospitals have some physician ownership, averaging 50 percent. It also found that, in 21 of the 25 specialty hospitals studied, proportionately fewer severely ill patients were treated than in general hospitals.

Dr. Joseph Galichia examines heart patient Frankie Harth at the Galichia Heart Hospital in Wichita. Galichia owns 20 percent of the hospital and says the facility gives him the ability to deliver better care to his patients.

Since 1990, the number of specialty hospitals nationwide has tripled to 92, with another 20 in development, according to the study.

Since federal law prohibits doctors from directing patients to laboratories and testing facilities they own, the same should apply to specialty hospitals, Breaux said. “It is a conflict of interest.”

The American Surgical Hospital Assn., a trade group, and two major specialty hospital chains — MedCath Corp. and National Surgical Hospitals, have challenged the accuracy of the GAO report. They said doctors wouldn’t steer patients to their own facilities for financial reasons because, as only small-percentage owners, the benefits to the doctors would be negligible.

Wichita offers example

Concerns about specialty hospitals have risen, among other places, in communities in Arizona, Kansas, Louisiana, Indiana, Ohio, Wisconsin and Oklahoma. Wichita is one such place, with two acute care hospitals competing with two heart hospitals and a surgical center. A spine hospital is on the way.

When Kansas Heart Hospital opened nearly four years ago, Via Christi lost 40 percent of its cardiac care revenues. In 1998, 1,400 bypass operations were performed at Via Christi; now there are 650. Revenue from a bypass operation is about $30,000 so the decline means a loss of $22.5 million in annual revenues for Via Christi.

Using Medicare data, the California Nurses Assn., a union, estimated that Kansas Heart made $12.4 million in profits in 2000. Kansas Heart declined comment. In the same year, after expenses, Via Christi had a $7 million margin.

Nyp said income from heart procedures is especially important, because they typically provide a profit margin of between 8 percent and 10 percent compared to 3 percent to 4 percent on other types of care.

Via Christi attempted to bolster revenues by adding to its neurosurgery department. But two of the doctors it lured to Wichita with salary guarantees are investing in the spine hospital slated to open in January, and now Via Christi fears losing lucrative spine patients.

Nyp said it’s difficult to compete with specialty hospitals when doctors determine where a patient will be treated.

Doctors say they consider several factors when deciding where to direct a patient. Private insurance patients’ plans often mandate that they go to a particular institution or to a hospital within an insurance company’s network. However, patients often can choose to leave the network for an additional fee.

Medicare patients can be treated anywhere, and comprise the majority of the population at both Kansas Heart and Galichia. Medicare allows hospitals to pocket any difference between its standard payment and actual costs, but also requires them to handle any shortfall.

Doctors deny picking

General hospital administrators say it’s easy for physicians to examine which patients are likely to be profitable: An examination of their condition and medical history will show which patients are more likely to experience complications. Physician-owners of specialty hospitals say it’s not that simple, and deny they avoid complicated cases.

“You can’t predict who is going to have a stroke,” said Dr. Gregory Duick, who heads Kansas Heart and owns 5 percent of it. “We don’t exclude patients who are obese, have emphysema, diabetes.”

Doctors own 40 percent of Kansas Heart, while other private investors own the rest.

Duick insists profits are derived from running smaller, more efficient operations. Kansas Heart has 54 beds, Galicia 55. Via Christi has 1,060 acute care beds.

“It seems like they want to punish the efficient,” Duick said of the Medicare amendment. “General hospital are not good stewards of their resources.”

Doctors deny pushing patients to their institution to pad their incomes.

“I don’t think about ownership,” said Dr. Layne Reusser, an investor in Kansas Heart. “Patients ask for this place.”