Virtua Health, Southern New Jersey’s largest health care system, is making outpatient surgery a cornerstone of its future.
The Marlton-based system is in negotiations to add up to 13 ambulatory centers to its network as a way to expand its one-room surgical capabilities.
Dennis Pullin, who was appointed CEO of Virtua in October, said the centers are being negotiated with independent doctor offices. The system is looking to add them to increase its capabilities in performing surgeries outside of the traditional hospital setting, he said.
“We’re looking at 13 new ambulatory service centers across the state,” Pullin said.
They are in active review for acquisition – some deals could fall through and some might not. The deals are really joint ventures with independent physicians or network of physicians to expand our footprint and prepare us for what we see as the future of surgery, which we think will be around lower acuity-type surgeries that don’t have to be done in a hospital setting.”
Chief Financial Officer Bob Segin said additional surgical centers will help increase one of Virtua’s biggest areas of business.
“Our revenue is made up of 52 percent of outpatient ambulatory service business,” Segin said. “We were the first organization to have a free-standing surgery center 30 years ago. We treat 110,000 surgical cases per year, and in a ‘one-room’ surgical setting, we have 306 physician investors and $210 million in total revenue in that business. So when you talk about outpatient surgical cost, that’s where the surgical volume is going to go. We feel we’re really positioned strongly for that.”
The state’s new one-room law, passed in January, should help Virtua expand in that area. It allows, for the first time, registered surgical centers, or one rooms, to obtain licenses from the state Department of Health and be exempt from current hospital standards overseen by the New Jersey Board of Medical Examiners.
In essence, the new law eases the regulatory burdens on surgical practices and make it easier for them to sell or expand their businesses.
Meanwhile, Virtua also is engaged in other types of expansion.
In March, it signed a letter of intent with Maxis Health System to acquire Lourdes Health System, which operates two hospitals in Southern New Jersey — Our Lady of Lourdes Medical Center and Lourdes Medical Center of Burlington County. Maxis is the parent company of Lourdes.
Cooper University Healthcare pulled out of a deal to acquire Lourdes in February.
“We’re currently in the final stages of our due diligence,” Pullin said. “But as of right now, things are moving quite well. We hope to conclude our due diligence this month and move to a definitive agreement. From a complementary perspective, the one thing [Lourdes] has that we don’t and others in the region is its cardiac services units.”
Like other large systems, one of Virtua Health’s ultimate goals is to provide the complete continuum of care, as well as expand its behavioral health capabilities and cancer care through its partnership with Penn Health. Most of all, it is seeking to provide care to low-income residents.
“We have a community commitment to the most vulnerable communities such as Camden,” he said. “That’s in addition to what we’re doing in the area of behavioral health, which we know is a tremendous community need. We had an acute care hospital in Berlin that we have repurposed to focus on behavioral health. We’re implementing a detox, outpatient and partial hospitalization program there.”
The system is in the midst of spending $22 million to repurpose its Camden facility into a 34,500-square-foot Family Health Center, which will be a multispecialty ambulatory site with a free-standing emergency department and mental health and wellness services that is expected to be completed next fall.
The system also will expand its cancer care and neurosurgery capabilities through its partnership with Penn Medicine. Currently, Virtua is working with Penn to establish a proton therapy center that will provide the full spectrum of radiation therapy to cancer patients in New Jersey. It also is building a $38 million cancer center in Moorestown.
Stephanie Fendrick, Virtua’s chief strategy officer, said the strategic alliance with Penn Medicine has made it easier to treat cancer and neurosurgery patients in state and to recruit cancer specialists.
“For cancer care, we’ve been able to bring more clinical trials into our local community,” she said. “We have our physicians working together on things like clinical protocols, quality and safety programs, and we also have specialists that are harder to recruit that we work with Penn on to recruit.”
Pullin emphasized that the partnership with Penn Medicine is more than “a branding relationship” and is designed to keep New Jersey cancer patients in the state.
“The physicians employed by Penn are here in our community,” he said.