Battling Hospital Goliaths

January 17, 1994|By Patricia Meisol | Patricia Meisol,Staff Writer

As a new gastroenterologist in town in the late 1980s, Mark D. Noar was drawing "horrible" time slots in hospital endoscopy suites. His solution: Buy the equipment himself and treat patients in his own office.

Last week, his four-year battle to conduct procedures in his office for the convenience of himself and his patients ended successfully when hospitals lost their bid to close him down.

The battle was heated because such centers, with their lower rates, could drain business from hospitals as insurance companies push for lower costs.

More narrowly, the fight was over who gets reimbursed by the federal government -- the hospital or the doctor -- for providing space to treat patients in Maryland. Dr. Noar could continue to work in his office unchallenged if he were willing to do it only for his professional fee, which is the same whether he works in his office or in a hospital. But he also wanted to collect the facility fee to cover the cost of equipping and running the center and sought a license that would make him Medicare-certified.

Gastroenterologists treat digestive system disorders, and for more than a decade they have used high-tech scopes outfitted with cameras and lights to look at internal organs, remove blockages and provide other treatments. The technology transformed their specialty by allowing them to treat patients they previously referred to surgeons. About 80 percent of such endoscopies are done on an outpatient basis.

Dr. Noar licensed his first center in 1991, but it wasn't until he applied for two more that opposition arose. State planners are now studying whether and how to regulate doctors who perform endoscopy procedures in their offices. So far, only hospitals require doctors to meet certain standards to be certified for endoscopy.

It should not surprise those who know the 40-year-old doctor that he would pave the way for office-based GI endoscopy practices in Maryland. He has had sideline careers as an inventor, orchid grower and wire-service journalist, reporting on international medical conventions while in medical school. He describes himself as a driven man, highly organized and a bit arrogant.

"I am not the status quo," he said in an interview last week in his Towson office suite.

His business, Endoscopic Microsurgical Associates, does five procedures a day but has the capacity to do 40, and Dr. Noar plans to hire a second doctor this spring. As a result of last week's ruling bythe Maryland Health Resources Planning Commission not to set up barriers for doctors who want to conduct nonsurgical GI procedures in their offices, Dr. Noar plans to expand into Bel Air and Annapolis. Others are expected to follow.

"On every staff of every hospital in the entire state, GIs are waiting to open their own unit," Dr. Noar said.

Dr. Noar said he has grown his business by concentrating on customer service. His endoscopy center looks like a mini-hospital. It has three endoscopy suites and five recovery bays. He is available 24 hours a day.

Most mornings, he alternates between examining patients and performing the five-minute endoscopy procedures that have the hospital industry on edge. Some procedures, like colonoscopy, take 20 minutes.

A patient at Dr. Noar's facility is done after about an hour and a half, compared with four to five hours at a hospital, where all kinds of procedures are performed and delays are common. The cost, too, is much lower at private centers because they do not treat people who can't pay and because they don't have the overhead of a hospital.

"Up until the 1980s, you had to be successful among your colleagues [to get referrals]," Dr. Noar said. Now, suddenly, because of changes in insurance and the move to managed care, the referrals come from doctors who tell patients to look in their medical benefits books to find a doctor. Because the referring doctor often doesn't know the specialist personally, repeat business depends on whether the patient was satisfied.

"So nowadays, the astute physician knows a larger percentage of his business depends on patient satisfaction," Dr. Noar said.

The average case costs $400 at Dr. Noar's center, he said, compared with $800 to $1,200 charged by hospitals. At the current volume of patients, his York Road office alone would generate annual revenue of at least $500,000. Dr. Noar declined to offer financial details, but he noted that it cost $80,000 to equip each of three endoscopy rooms in his center.

In addition to his regular practice, Dr. Noar specializes in biliary (gall bladder) and pancreatic endoscopy.

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