San Diego At Tri-City Medical Center in Oceanside, everyone’s talking about the robotic wonder. It’s a $2.7 million piece of equipment officially called the Da Vinci Surgical System. The robot arrived at the hospital in July, helping doctors perform surgeries faster and resulting in shorter patient recovery times, said hospital CEO Larry Anderson. Even though the Da Vinci system, made by Intuitive Surgical Inc. of Sunnyvale, and the training required to use it are expensive, it makes Tri-City more competitive by lowering its costs in the long run. “The government will be driving business to hospitals with the lowest costs,” Anderson said. For Tri-City and other local health care districts, including Palomar Pomerado Health and Scripps Health, using new technology is one of the key ways they’re bringing down costs and boosting efficiency in the new era of the federal Affordable Care Act. Also, most local hospitals are putting a greater emphasis in partnering with their doctors. Indeed, competition among hospitals today is very much connected to how well they are poised to embrace federal health care changes, Steven Escoboza, president and CEO of the Hospital Association of San Diego and Imperial Counties, a nonprofit trade association. It makes sense when you consider that the U.S. government will be footing the bill for half of the nation’s projected $4.6 trillion in health care costs by 2020, according to a report from the Centers for Medicare & Medicaid Services. Hospitals are preparing not only for a surge of new patients starting in 2014, when the “individual mandate” for health insurance goes into effect, but also for the switch from a fee-for-service reimbursement model to bundled payments. With bundled payments, hospitals and doctors are paid a flat rate for an episode of care rather than billing separately for each service or test. The approach, also being embraced by some commercial insurers, is meant to discourage unnecessary care and promote coordination among health care providers. Doing Business With DocsThe impending reimbursement change has sparked a wave of hospitals partnering more closely with their doctors, Escoboza said. “It’s all about trying to integrate their physician relationships,” he said. “They’re at it furiously. You’re seeing all of the components of health care delivery align, and the physician is right in the middle of that coordinated care.” One example is at Palomar Pomerado Health, which has formed a nonprofit business partnership with doctors at the Centre for Healthcare to create the Poway-based integrated care organization called Arch Health Partners. Some 70 physicians share medical information with hospital staff and work collaboratively with a “case management” type of approach. “There’s a greater need for us to partner with our physicians more so than we have in the past, not only in the operations of the hospital, but in issues of finances and reimbursement,” said Michael Covert, president and CEO of Palomar Pomerado Health. Tom Gehring, president and CEO of the San Diego County Medical Society, said such business partnerships between doctors and hospitals are a positive thing, for the most part. “It can improve quality and lower cost,” he said. “It’s good so long as the independent clinical judgment of physicians is not at risk.” Scripps Health and Tri-City have similar efforts under way. “We’re working with our doctors in a very, very different way,” said Chris Van Gorder, president and CEO of Scripps Health. The health system this fall launched a public benefit corporation called Scripps Care, controlled by doctors, as a way for the “physicians group to reach into Scripps Health and manage the continuity of care.” While patients are the ultimate consumer, “physicians are also viewed now by the health care delivery system as an important customer also,” Escoboza noted. “When you start talking about new technology and the Da Vinci, a lot of hospitals move into those things not only to please the patients, but also because they want to recruit physicians and incentivize them to be a part of their networks.” ‘Coopetition’ On the commercial side of the hospital business, Escoboza said that he’s seeing a new breed of competition that he calls “coopetition.” Hospitals are becoming more transparent with their information, collaborating on special projects and sharing resources. A case in point: Last month, Scripps Health and Rady Children’s Hospital-San Diego announced they will team up to provide advanced proton treatment to pediatric cancer patients at the Scripps Proton Therapy Center, a $220 million cancer treatment and research facility that is expected to open in spring 2013. “There’s no reason to have a program that’s more than $200 million duplicated in a community our size,” Van Gorder said. Quicker RecoveryThe week after Thanksgiving, Tri-City doctor Paul Mazur used the Da Vinci machine — which mirrored the movements of his hands as he sat at a console, examining magnified 3-D images of arteries — to complete a heart bypass surgery in about two hours with just a 2-inch incision. The patient, a 66-year-old man, was walking around two days later and discharged in half the usual time. “We’re using it every day and our doctors are already asking for a second machine,” Anderson said. Patients spend less time under anesthesia, fewer days in intensive care, and are less prone to complications such as infections. Ultimately, it means shorter hospital stays, freeing up beds for other patients. “It saves us money,” Anderson said, noting that insurance reimbursement rates for a procedure is the same whether or not surgeons are using a robotic helper. Anderson said he hasn’t had the system long enough to predict exactly how much money it will save. Catering to Uncle Sam Some version of the Da Vinci system, which gained Food and Drug Administration approval in 2000, is in use at most every major health care organization in San Diego County — and 2,000 hospitals around the world — helping surgeons with procedures ranging from hysterectomies to appendectomies. Sharp HealthCare and UC San Diego Health System declined to be interviewed for the article. Sharp does use Da Vinci at three of its hospitals and the UCSD Health System uses it as well. Robotic surgeries and other technology, including wireless medical devices, are helping hospital administrators lower their costs and improve patient outcomes in the face of a transforming health care system. Those two important metrics — costs and patient outcomes — will be closely tied to government medical reimbursements as health care reform goes into effect.