After years of rivalry Sharon Regional Health System and UPMC Horizon found they can agree on at least one thing.

Both hospital systems are adamantly against a for-profit outpatient surgery center opening in Transfer. Executives at both non-profit health systems said the center could siphon off millions of dollars from their revenues leading to hospital job cuts and cuts in services.

The center's developer, Kapital Development LLC, Sharon, said the hospitals' views were predictable but that in the end, the public is better off when there's more competition.

Kapital Development is building the 20,000-square-foot center at Edgewood Place which would handle such cases as general surgery, orthopedics, gynecology, otolaryngology, gastroenterology, urology, ophthalmology and podiatry. Groundbreaking is set for this fall and the center is expected to be completed in the spring.

Outpatient surgery has been a growing phenomenon in health care and now accounts for the majority of surgeries performed by most hospitals.

"Ambulatory surgery centers are costly duplications of existing facilities, equipment and services that do not bring any new services to the community and as a result may increase the cost of hospitalization insurance,'' said Wayne Johnston, president and chief executive officer of Sharon Regional.

Such a center could take away local hospitals' healthier and well-insured patients which may lead to cuts in programs and services they offer, he said.

"Our mission is to take care of the people in the community,'' Johnston said. "We don't turn any patients away because of an inability to pay. This is a major threat in our ability to do that.''

As non-profit organizations, hospitals were created to care for everyone, he said. Sharon Regional said about 70 percent of the procedures it handles are reimbursed by Medicare or the state Department of Public Welfare which pay less than regular health care insurance.

"The hospital has to take care of the complex cases -- they (surgery centers) can take care of whoever they want,'' Johnston said.

In the end, market forces will decide will patients will go, said Kurtis D. Gramley, managing member of Kapital Development.

"Let competition rule,'' Gramley said. "We don't view this as a duplication of services. We view this as a better product at a lower cost with better service. We'll let the patients of the county determine where they want their outpatient surgery done.''

He added he wasn't surprised by the hospitals' views.

"If you would have asked me six months ago what their response would be I would have written the responses you just gave me,'' he said. "It's only natural to say things like that when you have a competitor with a far better service coming into town. Maybe I would say the same thing if I was in their shoes.''

Similar gloom and doom predictions are made by hospitals when centers open up elsewhere but the centers prove to be a benefit to the area, he said.

"It really does force everybody else in the market to improve their services, Gramley said.

"A competitor coming into the area will force the other guy to improve their services and everybody wins.''

He wouldn't give names of doctors who were investing in the center or say whether they would be required to refer a specific percentage of their patients to the center.

In a news release Sharon Regional said it was concerned "about the ethical considerations of physicians referring patients to facilities in which they have an investment interest.''

Community hospitals have programs that can be money losers but continue to offer them because it's for the good of the community, said Robert Jazwinski, a Sharon Regional board member.

"Hospitals have to be involved in businesses that for-profit businesses wouldn't want to be in,'' Jazwinski said.

Horizon gave an equally dim view.

"I would say development of this center has the potential of a devastating effect on the health care delivery system in this county,'' said Michael Downing, vice president of planning and marketing for Horizon.

Horizon's hospitals in Greenville and Farrell are in towns which have been classified by the state as economically distressed, Downing noted.

"Outpatient surgery centers work best in communities where you have a lot of population and economic growth. You don't have that in Mercer County,'' he said.

He estimated the center could drain up to $7 million in revenue. Last fiscal year Horizon's revenues totaled $86 million.

"If the center opens and succeeds we will be forced into a situation to look to reduce expenses to compensate for that,'' Downing said.

Every $40,000 in revenue translates into one hospital job, he added.

Sharon Regional employs about 1,800 and Horizon employs about 1,200 people in Mercer County.

When it comes to cutting costs hospital employees would take the heaviest hit, Johnston said.

Hospitals have fixed costs such as equipment and paying off debt.

"You can lay off people but you can't lay off debt or equipment,'' he said.

Sharon Regional estimated the center could claim up to $65 million in local hospitals' revenue during the first five years of its operation.

In the past whenever a health care provider wanted to add a new service the state required proof it was needed. The requirement to apply for a certificate of need has since been abolished.

"If a certificate of need was still required for this I don't think it would pass muster in Mercer County,'' said Jim Feeney, chairman of Sharon Regional.

The center is more than justified, Gramley said.

"I don't know how you can't justify a state-of-the-art surgical hospital to serve the patients' needs in a community,'' he said.