Hospital for Special Surgery to open new joint in Connecticut

Read it at Crain’s New York Business

An Upper East Side medical center known for treating star athletes and baby boomers is expanding its footprint outside the city. The Hospital for Special Surgery will open a long-delayed outpatient center in Stamford, Conn., in February.
The specialist institution for orthopedics and rheumatology has had suburban outposts of doctors’ offices for some time. But the new Connecticut site, which replaces a small operation in Greenwich, is a much larger investment: $12.6 million for an 18,000-square-foot facility.
Designed by architecture firm Perkins Eastman, the building sits in the tony Chelsea Piers complex off I-95 that also houses an outpost of Stamford Hospital—a competitor whose website touts its own orthopedic credentials. The new Stamford site just might spark a turf battle.
“This location serves a broader market: patients who are deciding between different institutions,” said HSS Chief Executive Louis Shapiro.
By strengthening its Connecticut presence, HSS is somewhat late to an expansion strategy that many of its New York City rivals already have embraced: feeding the mother ship with patients from “spoke” facilities located largely in wealthy suburban communities. HSS’ expansion plans cover a 75-mile radius, said Mr. Shapiro.
In October, Memorial Sloan Kettering Cancer Center opened a 114,000-square-foot ambulatory care facility in West Harrison, a Westchester County suburb. The Mount Sinai Health System recently partnered with the Valley Health System in northern New Jersey and is actively looking for a Connecticut alliance. And Stamford Hospital is an affiliate of New York-Presbyterian Hospital, which also competes with HSS on the Upper East Side.
New York-Presbyterian declined to comment, while a Stamford Hospital spokesman said that “we have been aware” of HSS’ new facility, which would “further increase the availability of orthopedic surgeons for our community.”
Long wait for approval
HSS is straining at capacity at its Manhattan location on East 70th Street and the FDR Drive. In late 2014, it filed an application with the state Health Department to build a $16.2 million, 10,000-square-foot extension at the campus.
HSS has the technology to replace every joint in the body, and demand for orthopedic services from an aging population is strong both domestically and internationally. Last year, the hospital’s patients arrived from more than 80 countries.
“Because HSS is such a magnet and name-brand institution, this regional expansion is a significant change,” said Dan Grauman, president and chief executive of DGA Partners, a health care consulting firm.
Some 16% of HSS’ patients live in New York City’s northern suburbs, the impetus for opening a site that brings comprehensive services closer to home. The hospital also has a satellite facility in Paramus, N.J., in a state that is home to 17% of HSS’ patient base. Shifting radiology and other services to the suburbs opens capacity at the institution’s Manhattan campus, allowing it to accommodate the most complex cases.
Connecticut regulators, however, had a far different view of HSS’ Stamford expansion strategy. The state’s Department of Public Health held up a key part of the project for a year and a half over concerns that the hospital would treat only wealthy patients.
Public records show it took 16 months and a lawsuit for Connecticut’s health department to finally sign off on HSS’ purchase of an MRI machine for the Stamford center. In explaining its concerns, the state argued that the hospital’s proposed location would only “serve its own patients who are commercially insured or who privately pay for services rendered,” according to a settlement signed in December 2013.
“Orthopedic services can be really hard to find in the Connecticut Medicaid program,” said Ellen Andrews, executive director of the Connecticut Health Policy Project.
Another reason Connecticut initially turned down HSS’ application is that it couldn’t find evidence that the hospital’s “MRI protocols provide significantly better imaging results or lead to better surgical outcomes than … existing Connecticut providers.”
10% target
The state finally approved the project on the condition that at least 10% of the patients HSS will treat in Connecticut are uninsured or are Medicaid beneficiaries. Medicaid patients compose a fifth of Connecticut’s population. But that 10% target is an exceptionally high bar for a hospital where Medicaid recipients accounted for less than 2% of its patient base in Manhattan in 2012.
HSS can form relationships with community groups that serve low-income Connecticut residents, join the networks of Medicaid insurers and hold several clinic days per month, as per the settlement. For the hospital, meeting the 10% target could be a challenge.
“You can’t control which patients will show up,” said Mr. Grauman, the consultant.
Mr. Shapiro, though, is confident that the new Stamford site will attract patients no matter their insurance status.
“We’re unique, and it’s incumbent upon us to explain and demonstrate how we are unique,” said Mr. Shapiro. Patients bypass their local hospitals and travel to HSS, he added, often from far longer distances than Stamford. “You just wouldn’t have people driving past and flying over excellent institutions across the country—and around the world—if that wasn’t true.”