Vermont health care regulators on Monday approved a freestanding, for-profit surgery center in Colchester — despite strong objections from all of the state’s hospitals.

The decision comes two years after a group of doctors first sought permission from the Green Mountain Care Board to build an independent outpatient facility.

Amy Cooper, a member of that group and executive director of the independent doctors’ association HealthFirst, pitched the center as a lower-cost alternative to the care provided in hospitals.

The Green Mountain Surgery Center will perform colonoscopies, epidural injections, orthopedic surgeries, hernia repair and other procedures that aren’t emergencies and don’t require overnight stays. Cooper has said — and the decision stipulates — that the center will accept patients regardless of the insurance they have. The Office of the Health Care Advocate, a consumer watchdog housed within Vermont Legal Aid, ultimately backed the project.

The Vermont Association of Hospitals and Health Systems, which advocates on behalf of the state’s nonprofit hospitals, fought the proposal from beginning to end.

Hospital officials argued that there isn’t demand for such a center and, if created, it will actually drive up the overall cost of health care by providing duplicative services.

They’ve also expressed concern about their own bottom lines, suggesting that the center would siphon away the profitable procedures that hospitals depend upon to offset costlier surgeries and the overhead expense of maintaining an emergency room.

Among the 29 conditions the board is requiring: The surgery center must participate in the state’s all-payer health care reform effort, clearly disclose the prices of its procedures, negotiate lower reimbursement rates than what hospitals receive from insurers and report regularly to the board.

The board approved the center in a 4-1 vote. In a strongly worded dissent, board member Con Hogan wrote, “Instead of working within our system of care, the surgery center would fragment it, funneling healthier and higher-paying patients away from the hospitals.”

The hard-fought battle over the surgery center is indicative of a broader debate in Vermont about whether the health care system needs more competition or consolidation.

Outpatient surgery centers are common elsewhere in the country but, with the exception of South Burlington’s Eye Surgery Center, which opened in 2008, Vermont has resisted the trend.

Twenty-two employees will staff the facility, which will have two operating rooms, four procedure rooms, and 14 beds for patients awaiting or recovering from procedures, according to the Green Mountain Care Board’s decision statement.