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Hospital to buy Surgery Center of Kenai

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Riley Board
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KDLL
The center opened in 2014.

Central Peninsula Hospital is buying the independently owned Surgery Center of Kenai for nearly $10 million.

The purchase of the two-operating room facility will, in turn, expand the hospital’s capacity and allow it to address a backlog of surgeries, said hospital CEO Shaun Keef.

“We’ve had several surgeons over the last year who have requested additional block time in our ORs because they had patients that need procedures that live in our area," he told the Kenai Peninsula Borough Assembly at a Tuesday finance committee meeting. "And we’re unable, at this point, to get them any more block time, due to the fact we practically just ran out of block time. The ORs are full.”

The Surgery Center of Kenai opened in 2014 and is the only for-profit center of its kind on the peninsula.

It does outpatient surgeries and has historically been a competitor with the borough-owned hospital. In 2014, the hospital declined to accept a transfer agreement with the Surgery Center, according to the Peninsula Clarion, making it so the center could not take Medicare or Medicaid patients.

But Keef told the assembly the hospital needs more space than its four operating rooms allow today. He said the hospital has a waitlist and is booking out months for some procedures — until November for knee replacements, for example, forcing patients to go up to Anchorage if they want operations done before then.

But it can’t open another room because of what are known as “certificate of need” regulations, which require medical facilities to get approval before changing their capacity.

“This would enable us to shift some of our outpatient surgeries over to the Surgery Center, open up more block time at the hospital for inpatient surgeries" he said. "This is definitely an opportunity for us to advance what we’re providing to the citizens in the area.”

The hospital is purchasing the center for $9,120,000, plus an additional $650,000 to pay off a loan. Keef said what they’re paying for are the fixed assets of the center — like the anesthesia machines — as well as those certificate of need licenses. Hospital spokesperson Bruce Richards said most of the doctors at the Surgery Center are already licensed to practice at the hospital.

Assembly President Brent Johnson said at the committee meeting that as it stands, the surgery center does some operations cheaper than the hospital because it has less overhead. Keef said that will still be the case even after the acquisition.

The Kenai Surgery Center building is owned by a local rental company — Schillings Rental in Kenai. Keef said the hospital will have a $127,000 lease with the company a year.

Surgery Center CEO Kristin Hernandez declined to comment or say how many surgeries the center does annually before the Surgery Center signs a final agreement with CPH.

You can find the original story here.

Sabine Poux is the news director at KDLL in Kenai. Originally from New York, she's lived and reported in Argentina and Vermont, where she fell in love with local news. She covers all things central peninsula at KDLL, but is especially interested in stories related to energy and fishing. She'd love to hear your ideas at spoux@kdll.org.
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