Another Brick in the Wall Around Sentaraland

by James C. Sherlock

Which one of these doesn’t match?

Story in Virginia Business Dec. 20:

EVMS, ODU and Sentara sign health center agreement.

Eastern Virginia Medical School, Old Dominion University and Sentara Healthcare entered into a memorandum of understanding Friday to work toward a collaborative academic health center….

That’s right. EVMS and ODU are state institutions. Sentara just acts like one. Is anyone at the Virginia Department of Health interested in this?

The Attorney General’s Office should have been up to its neck in this agreement, probably to nix it.

Allyson Tysinger is Senior Assistant Attorney General and Chief of the Health Services Section that provides advice to the VDH in its obligation to oversee and regulate such  services. Was her office involved in helping either VDH or the state entities ODU and EVMS conclude this agreement?

How about the University Counsel at ODU, Senior Assistant Attorney General Allen T. Wilson?

The Attorney General’s office actually has an antitrust unit, although as far as I know it never prosecuted an antitrust case under the current AG.  The Antitrust Unit Manager, Sarah Oxenham Allen, currently serves as the chair of the National Association of Attorneys General (NAAG) Antitrust Taskforce. Is she interested in how one dominant, vertically integrated healthcare provider and insurer was the only provider or insurer that was party to this agreement with state entities?

Just asking.

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6 responses to “Another Brick in the Wall Around Sentaraland”

  1. Stephen Haner Avatar
    Stephen Haner

    I assure you any such contract was submitted to OAG for review, and indeed the AG’s staff may have been at the table all along. But more likely review. Entities of that level of self-importance want their own hired lawyers running the show.

    1. James C. Sherlock Avatar
      James C. Sherlock

      We agree. But any level of legal oversight that could see past the documents in front of them should have recognized the anti-trust implications. Chesapeake Hospital and Bon Secours two remaining hospitals in Hampton Roads as well as private ambulatory surgical centers and physician’s practices clearly should have been parties to the agreements.

  2. YellowstoneBound1948 Avatar

    I wish I could dive into this with you, but I am unfamiliar with “collaborative academic health centers.” What are they, and is it presumed, without actually proving, that they damage competition?

  3. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I would think a deal like this would be outside the jurisdiction of the Dept. of Health. And I don’t think antitrust considerations would apply when a state institution is involved in the deal.

    The partnering of a state institution and a private hospital system to establish or expand a medical school is not without precedent in Virginia. The first was the establishment of what is now known as the Virginia Tech Carilion School of Medicine in Roanoke. The state actively encouraged that arrangement. With two state institutions involved in the Hampton Roads deal, I assume that the state was compliant, if not encouraging.

    I share your concern about the growth and expansion of these vertically integrated health care companies. Bon Secours is doing it in Richmond, but on a smaller scale, and it has a competitor in the HCA hospitals. Until the General Assembly sets some standards and limitations on these companies and assigns some agency the responsibility to oversee them, e.g. the Attorney General’s office or the SCC, or puts more teeth in the CON process, I don’t think there is much to stop them.

    1. YellowstoneBound1948 Avatar

      Good observations. I have not seen any data, but from a distance this does not seem to be a classic case of putting the competition out of business by the application of predatory behavior. And the fact that the State is a party does suggest that the proposed combination has already passed a litmus test. It would be hard for the State to bring an enforcement action against itself. But still, who is paying attention? I do not think the Department of Health has any jurisdiction over this, although it seems likely that the AGO does, especially if Virginia has a “baby” Sherman Act. I also thought of the CON laws, but I see nothing here that would implicate those laws unless expensive capital, or massive expenditures of new capital, or the reduction of vital services, are involved in the deal. Or unless unchecked pricing power, market power, or the power to steer patients here and there, are involved. I think the parties most likely to be injured, if any, will have to find relief at the federal level, but it won’t be easy, and the complaint will have to be based on competition not balance sheets.

  4. Nancy Naive Avatar
    Nancy Naive

    Well, look on the bright side… maybe ODU will enforce yearbook standards. Oh wait, no. Bound to be more DE&I compliant. Maybe even evaluated using CRT.

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