by James C. Sherlock
Bon Secours/Mercy Health has acquired hospitals currently owned by Community Health Systems (CHS) in Petersburg, Franklin and Emporia. It is welcome news that brings great credit to this Catholic charity and honors its historic mission.
CHS, headquartered in Tennessee, has been in poor financial shape for a long time.[1] CHS hospitals in Petersburg, Emporia and Franklin reported enormous debt loads and collectively reported a combined operating margin of negative 5.6%[2] in 2018, the latest year for which we have published state records. Not coincidentally, they served some of the poorest and sickest people in Virginia in a region whose population is declining. That region also hosts the most heavily African-American population in Virginia. Government payers make up a disproportionately high share of the payer mix. Bon Secours’ tax-exempt status, Medicaid expansion and the associated rate increase will move the needle, but financial constraints will remain.
Recruiting and retaining medical professionals to live and work near those hospitals has proven very difficult. In June of last year, I used the latest available hospital staff requirements and inpatient-days-per-year data from the state[3] and subtracted real-time online hospital recruiting data (staff shortages) to estimate roughly the workloads on existing staff at hospitals across the state.
Under that methodology, CHS’ Southside Regional Medical Center in Petersburg staff appeared to bear by far the heaviest workload, with 65 patient-days per staff member, more than double that of most Virginia hospitals. I tried to discover whether the Virginia Department of Health even monitors staff shortages and if so, whether it has any metrics for intervening to selectively shut down services when staffing declines to dangerous levels, but was unable to detect any such program. Perhaps the Health Commissioner can enlighten us.
Then there is the issue of public health in the communities newly served by Bon Secours. In 2019 the Robert Wood Johnson Foundation rated[4] 133 communities in Virginia for health outcomes — the higher the number, the worse the outcomes. Petersburg was rated 133 and last, and Emporia 128. Citizens of Petersburg lost on average more than five times as many years to premature death, had twice as many people in poor or fair health, and had low birthweight babies at twice the rate compared to Virginia’s healthiest location, Loudoun County. Patients with bad overall health in addition to an urgent illness or injury often require complex treatment that the three acquired hospitals may not be equipped or sufficiently staffed to provide.
Bon Secours will be able to improve healthcare services and outcomes, especially in complex cases, by leveraging its staff and advanced facilities nearby.
- Franklin is less than 40 miles from Bon Secours hospital and cancer center facilities in Harbor View and less than 50 miles from Maryview Hospital in Portsmouth.
- Petersburg is 20 miles and Emporia is about 60 miles from major Bon Secours facilities in Richmond.
The Commonwealth – “not our job”
The Commonwealth must increase its public health efforts in poor communities to help Bon Secours and its new patient populations to succeed. It is not promising. The Governor, the Secretary of Health and Human Resources, the Health Commissioner, DMAS and VCU Health have all previously declined to assist.
I wrote the Governor April of 2019 about Virginia’s four 1 star-rated (Medicare Hospital Compare) hospitals at that time, including the hospital in Petersburg, recommending increases in state oversight and assistance to improve their quality. I received no response.
In May of 2019 I wrote both the Secretary of Health and Human Resources and the Department of Medical Assistance Services (Medicaid) voicing concern about the quality of those hospitals. Dr. Lee, the Director of DMAS, helpfully responded, “Medicaid enrollees are able to choose their hospital.” The Secretary did not respond.
I wrote the Health Commissioner in late May. His response on Jun 5, 2019, stated that the Department of Health had no knowledge that CHS was in financial difficulty. (It had been openly discussed in the healthcare press since CHS’s first bankruptcy in 2014.) He added that his staff had checked with the Virginia Hospital and Healthcare Association (VHHA) and they had not heard about CHS having financial difficulties.
I responded with heavily footnoted details about the dire financial condition of CHS. No response. These are the same people who run the COPN program and award certificates to applicants based in part on their financial condition. Next time I will communicate directly with VHHA and cut out the middle man.
In June of 2019 in fact I wrote a detailed letter to the CEO of the state-owned VCU Health System recommending that the remarkably profitable state hospital system acquire the CHS hospitals to its south. Such a transaction would have fulfilled the very first legislative purpose of VCU Health, “Provide health care, including indigent care, to protect and promote the health and welfare of the citizens of the Commonwealth.”[5] No response.
If the government of Virginia is capable of shame, it should apologize.
Fortunately, a Catholic charity stepped in where every echelon of Virginia government feared to tread.
Health Enterprise Zones
A 2018 study[6] by researchers at Johns Hopkins Bloomberg School of Public Health linked Maryland’s HEZs (five small areas of the state) and their focus on improving access to primary care to a decline of more than 18,000 inpatient stays in the four years of the initiative, and an overall health care cost reduction of about $93 million for a state expenditure of $15 million. Certainly Petersburg, Emporia and Portsmouth, where the only civilian hospital is yet another Bon Secours facility, would be at the top of any list of Virginia HEZ candidates.
A bill was introduced this year that would have emulated in Maryland’s HEZ program in Virginia. It was bipartisan by design. It would have benefited poor Virginians represented by both Republicans and Democrats. I expected bipartisan support in the General Assembly and the Governor’s mansion. I was wrong.
That bill (HB 608) was introduced by Republican Del. Jason Miyares, Virginia Beach, chairman of the Commission on Economic Opportunity for Virginians in Aspiring and Diverse Communities. His parents emigrated from Cuba. He is smart, informed by his parents struggles, does his homework and, above all. ethical. Miyares own district would not benefit from the bill, but he introduced it as the right thing to do. As we have seen in the Maryland program results, the the reduction in Medicaid expenditures could significantly outweigh the program costs at a net financial gain to the state. The bill passed out of the House Welfare and Institutions (HWI) subcommittee on Health unanimously. Killing it in the House Appropriations Committee is literally inexplicable.
The votes for burying HB 608 in the House Appropriations subcommittee came from Delegates Mark Sickles, D-Alexandria; Betsy Carr, D-Richmond; Cliff Hayes, D-Chesapeake; Jay Jones, D-Norfolk; Kirk Cox, R-Colonial Heights; and Emily Brewer, R-Suffolk.
Sickles represents his generous donors from the hospital lobby and a long and thin district that stretches from Lorton all the way into Alexandria. Carr represents Richmond. Hayes represents poor sections of Suffolk, Chesapeake and Norfolk; Jones poor sections of Norfolk. Hayes voted for the bill in HWI and against it in House Appropriations. Cox represents Chesterfield County and Colonial Heights. Brewer represents Isle of Wight, Prince George, Surry and part of Suffolk.
I have no idea how they can explain their votes. They should be asked to do so.
Thank You
It is wonderful that Bon Secours cares enough to take on new and daunting challenges to improve the healthcare of the poorest Virginians with no real prospect of financial reward or of any assistance from the state.
The people of Virginia owe them a debt of gratitude and our best efforts to help them succeed. Would that every hospital system, the state government, every member of Virginia’s General Assembly and our Governor shared Bon Secours’ motivations and ethics.
James C. Sherlock, a Virginia Beach resident, is a retired Navy Captain and a certified enterprise architect. As a private citizen, he has researched and written about the business of healthcare in Virginia.
[1] https://www.moodys.com/credit-ratings/CHSCommunity-Health-Systems-Inc-credit-rating-600065730
[2] vhi.org
[3] ibid.
[4] https://www.countyhealthrankings.org/app/virginia/2019/overview
[5] § 23.1-2401. Authority established; powers, purposes, and duties
[6] Maryland Health Enterprise Zones Linked to Reduced Hospitalizations and Costs; Johns Hopkins Bloomberg School of Public Health; October 1, 2018
