A group of Coeur dAlene doctors has signed an agreement with a Chicago company to open a surgical hospital in Post Falls, a move that Kootenai Medical CenterCoeur dAlenes only hospitalestimates will cost it $6 million to $7 million a year in lost revenue.


The surgical hospital should open in 14 to 18 months, and will have four operating rooms and 12 inpatient beds, says Dr. Adam Olscamp, an orthopedic surgeon who is a member of the group thats investing in the project.


Whats not known at this point is where exactly the new hospital will be located, although Olscamp says his group is looking at property on Mullan Avenue in Post Falls, near Kootenai Medical Centers satellite health park there. One of the Coeur dAlene investors in the new hospital, Dr. Bret Dirks, also is a partner in North River LLC, a development company that owns property in the area, but Olscamp says he doesnt know if North Rivers involved or not.


Also unknown is the total cost of the project, Olscamp says. We dont have any firm idea of what the cost of the land will be, he says.


Olscamp is one of about a dozen physicians who will invest in the project in partnership with the Chicago company, National Surgical Hospitals Inc. Most of the physician investors currently are associated with North Idaho Day Surgery & Laser Center; as part of the agreement for the new hospital, National Surgical Hospitals has acquired an interest in North Idaho Day Surgery and will close the practices Coeur dAlene facility, at 2205 N. Ironwood Place, when the new hospital opens, Olscamp says.


National Surgical Hospitals operates a chain of nine boutique hospitals around the country.


The proposal to build another hospital in Kootenai County has created much rancor in the medical community there.


Joe Morris, CEO of Kootenai Medical Center (KMC), says, Theres been some loss of collegiality among the medical staff.


At a meeting called last month by KMCs board to discuss the issue, Dr. Jeff McDonald, one of the investors in the new hospital, said hes been surprised by the savagery of the attack weve been under, and accused KMC of at least partially orchestrating a response to the groups plans, which became public in December.


Other physicians at the same meeting who are not involved in the project accused McDonald and his group of putting their own financial interests ahead of the community. How much is enough in terms of profit? asked one.


National Surgical Hospitals estimates that its projects will provide a return on investment to physician-investors of 25 percent to 30 percent a year, the companys Web site says.


Morris says the new hospital will have a definite impact on KMC. The physicians involved in the project generated about $10 million in net revenue for KMC last year by performing surgery there, and although all of that work wont be shifted to the new hospitalemergency surgery wont be shifted, for example, because the new hospital wont provide emergency careKMC still expects to lose $6 million to $7 million in annual revenue when the Post Falls facility opens, he says. The expectation is that the physician-investors will elect to perform at the new hospital most of their scheduled surgical procedures. Such procedures are one of KMCs biggest profit centers.


Although that loss should be offset in the near term by revenue generated from KMCs cardiac-surgery program, which it expects to launch in 2003, five or 10 years from now, thats another story, Morris says. At that time, KMC could find it necessary once again to exercise its taxing authority and levy property taxes from Kootenai County residents, he says. The hospital hasnt used its taxing authority since 1994.


Olscamps group counters that the new hospital will provide patients with greater choice in where they receive their care, and will provide surgeons with more flexibility in scheduling procedures. As for KMCs assertion that it will be financially harmed by the new hospital, My feeling is thats just not true, Olscamp says. Everyone involved in the project feels like this wont hurt KMC to any great extent.


Now that the deal is done, Morris says KMC will try to make North Idaho residents aware that, once the new hospital opens, they can choose where they want to have their surgery. Its not strictly up to the doctor, he says.