House Bill 2264 was passed by the House of Delegates and at this writing sits in the Senate Health Committee chaired by Sen. Dr. Mike Maroney. HB 2264 would exempt West Virginia hospitals from CON (certificate of need) for proposed services to communities confined to the hospital campus only. The West Virginia Hospital Association opposes this bill, saying it would destabilize the hospital industry in West Virginia during a time of great uncertainty. The argument, to quote Spock, is illogical. Why?
The hospital industry in West Virginia is already unstable! Before the pandemic, hospitals were already in financial trouble as evidenced by closures and bankruptcies (including Thomas Health) of rural/community facilities. Add to this the $400 million in losses incurred by West Virginia hospitals during the first 12 months of the pandemic and no one would deny there is mounting uncertainty. However, let’s look at what is certain:
n Commercial insurance plans in the marketplace are declining.
n Medicare enrollment in the state accounts for close to 400,000 beneficiaries.
n Medicaid enrollment has risen during the pandemic from 482,000 to 564,000 enrollees.
n PEIA accounts for 230,000 lives; they pay providers less than Medicaid.
n West Virginia’s population is declining and projections predict further declines through 2030.
n More than 50% of physicians have left private practice and now are employed by hospitals.
The point of these numbers lies in the fact 1.1 million of the 1.7 million West Virginia residents are covered by governmental payers that pay hospitals less than it costs to care for patients. Do the math and its clear this “business model” is in trouble. The WVHA wants to maintain the status quo — a status quo that has seen a reduction in, at best, services provided by community hospitals but without question the closure of community hospitals.
Any concern that out-of-state entities are poised at the border ready to enter and take over healthcare in West Virginia but for CON is misplaced. The hospital industry in West Virginia is less threatened by outside for-profit corporations or hospital systems in other states or independent doctors competing with hospitals because they recognize an acceptable return on investment cannot be achieved in this market. I know. I saw it firsthand during the Thomas Chapter 11 process watching entities with cash wanting to invest in West Virginia quickly retreat after looking at the numbers associated with healthcare in this state.
Local hospitals serve their communities in times of disasters, water crisis events (recall Freedom Industries spill), derechos, drug addiction epidemics and worldwide pandemics. In “normal” times, community hospitals provide services we now have come to expect and take for granted. Hospitals and their emergency rooms are open 24/7, 7 days a week, 365 days a year to care for family and community needs. Are hospitals community assets? I think so! In the current environment, hospitals need flexibility without archaic regulations that no longer serve our communities because they arose in times and circumstances which no longer exist. Certainly, West Virginia is facing other issues that also need addressed (population decline, economic diversity, etc.) that will take years to address. For now, right now, why not give hospitals the room to identify services that can serve their communities based on access, choice, quality and price transparency that will bring value to patients, doctors and communities? HB 2264 modifies CON to allow a hospital to expand or add services to the existing campus. If issues like CON are to remain status quo, it will allow a continuing trend of loss of local services, further expanding “airport medicine” whereby they have to travel even further to a tertiary care center for care. I urge the Senate Health Committee to move HB 2264 through the process. Status quo is not the answer.