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To be a member of the Redlands Hospital physician staff, a
physician must be board-certified in his or her specialty and
regarded by Redlands Hospital as a capable practitioner.
Redlands Hospital uses a "proctory" review process to approve new
members of its physician staff. Before the General Partnership
acquired its interest in the Surgery Center, no proctoring was
conducted at the Surgery Center. Since the affiliation of the
Surgery Center with the General Partnership, it is frequently the
case that, as new surgeons join Redlands Hospital's staff, the
Redlands Hospital proctoring requirements are satisfied, in whole
or in part, during surgeries performed at the Surgery Center.
Redlands Hospital has been involved in teaching new
procedures to be performed at the Surgery Center. An example is
laser arthroscopic surgery, which eliminates incision. These
procedures were developed at Redlands Hospital, and the knowledge
was shared with the Surgery Center.
The Surgery Center’s Financial Results
The Surgery Center’s profit levels and payor mix are
comparable to other ambulatory surgery centers. Its profits are
used for equipment additions, replacements, improvements in
services, and cash distributions to the partners.
In the first 5-month period after April 30, 1990, when the
amended Operating Partnership and the SCA Management contract
became effective, the Operating Partnership had net income of
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