Bon Secours — a Blessing Indeed

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 haven 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

There are currently no comments highlighted.

26 responses to “Bon Secours — a Blessing Indeed

  1. A thought-provoking article for sure.

    So my first thought is a question – is it a core function of government to ensure that all citizens in the State have access to quality health care?

    Or should that be left up to the “market” and willing charities?

    Does anyone think that Bon Secours/Mercy Health will be subsidizing those rural hospitals from it’s more profitable urban locations and in essence engaging in “wealth transfer”?

    Thanks much for the footnotes. One small request, can you put page numbers so I can find the actual part you are referencing?

    thanks for the article and thanks for your other articles – though as you know, we do differ on things.

    • Your questions are good ones.
      First: No one would disagree that it is a function of government to ensure our healthcare system is safe. That function has been widely disregarded by the Virginia Department of Health. They are essentially asleep at the switch in major oversight roles and will need a thorough shakeup to change the culture. I will write a piece soon that will detail some of those failures.

      Second: You will note that I first turned to an existing government entity to solve the Tri-Cities hospital problem. VCU Health had the mission, the opportunity, the physical location and the means to buy those hospitals and declined.

      Third: Bon Secours/Mercy Health will do whatever it takes to improve healthcare in the populations for whom they have assumed responsibility. As I noted, this population will never make a hospital system rich because of the payer mix. But CHS, absorbed with avoiding another corporate bankruptcy, simply did not give the management attention or spend the money necessary to improve care. Every hospital system with urban/profitable and rural/unprofitable hospitals engages in forms of case management that result in better care for their rural patients, but it is not wealth transfer. What the best ones do is a form of triage. The capabilities and staffing of their urban hospitals far exceed those of their rural facilities. They transfer rural patients requiring complex care to their urban hub and treat them there. Complex procedures are themselves far more profitable than less complex ones, including those paid for by Medicaid and Medicare. So the hospital systems can do well by doing good. There are no losers in those transactions. CHS had no urban hub in Virginia to enable that strategy. As I said in my article, Bon Secours won’t ever get rich from this transaction, but I think they will cover costs and earn enough to keep improving the care in that region.

      One of my frustrations with VCU Health is that they get paid at academic medical center rates, which are considerably higher that the rates paid to
      Bon Secours for the same procedures. VCU Health also gets public funding at the rate of $27 million a year and has a Foundation that kicks in another $25 million before they ever treat a patient. Yet they did not step up.

      On the subject of healthcare, I doubt we disagree on much Larry except whether a government run health system would be superior to the one we have now. See my comments about the Virginia Department of Health for a key reason.

      • I posted a map posted that shows the problem is bigger than Virginia.

        Do you believe that all of those other states are also “asleep at the switch” on this issue?

        Is this a Virginia-only issue or a wider one involving a lot of other states?

        Do you see where SOME counties are good and others not good within the same state?

        If there is one office in each state responsible – what does it mean when some counties under their aegis are “good” and others “bad”?

        Should the government FORCE some state-supported hospitals to expand and cover counties that lack good health care?

        • The true answer is it depends. The quality of state healthcare systems varies widely. A key variable is the size of each state, it’s demographics and the number of citizens who live in underserved communities. Every state struggles to bring quality healthcare to its poorer citizens, partially because the health of those citizens is dependent upon so much more than a good hospital as I pointed out in my answer to your previous question. A controlling fact is that no state can force highly trained medical professionals to live where they do not wish to live. That is the source of the poor staffing and low end capabilities from which many rural healthcare facilities suffer and it will remain a problem. Medicaid actually offers free transportation to its patients if they wish to bypass the local hospital, but most of the Medicaid clients don’t have enough information to make that decision. So yes, we will continue to depend on the CEOs and boards of hospital systems – government, for-profit and nonprofit, to do the right thing. Some of them will, some of them won’t.

          By the way, did I mention that I hate spell checker?

          • Thanks for answering questions and engaging in the dialogue!

            You are correct about us agreeing on some issues, no question.

            this one I wonder about:

            ” A controlling fact is that no state can force highly trained medical professionals to live where they do not wish to live.”

            This is true, but they CAN offer incentives especially to those they give financial assistance to in school.

            And it’s also true – that without the government, most health care professionals are also not going to locate in an area where many people cannot afford to pay for services and as a result, the health care professionals earn far less than they would in a more prosperous area.

            What this illustrates is that the “market” will not fix this. The “market” does not really seek to serve those who are unable to pay. The “market” seeks t profit from those who can and will pay so that some hospitals in prosperous regions actually can and do make a profit by selling services that insurance companies and Medicare/Medicaid do not reimburse.

            With those profits, they reinvest in their own systems to offer even more robust services such that both reimbursed and non-reimbursed services delivered by high quality staff are offered.

            Little to none of this happens in low income regions and actually the opposite happens as more numbers of needy who cannot pay – do not get regular primary care – then show up with advanced disease at the local hospital and can’t pay them either.

            I’ll stop here and ask if what I have written so far – you agree with.

  2. Thank you for this post. I, also, welcomed the acquisition of those hospitals by Bon Secours. I had long heard complaints about the service at the Petersburg hospital. Probably the staff shortages that you cited were the main cause of those service problems.

    Your post made me realize that there is very little information or discussion of the role of local health departments. Perhaps that is an area in which primary care could be increased, thereby decreasing expensive hospital stays. I have a feeling the HEZ concept is related. I would recommend continuing to push the HEZ idea during the interim, hoping to educate some legislators before next session. It would be a good idea for you, Miyares, or someone (preferably a Delegate) to talk to Susan Massart, the House Appropriations staff member who handles health issues. The staff on these committees can be very influential.

    There is also the Joint Commission on Health Care, which has a staff and carries some clout. Hayes is on that commission. Of course, Sen. George Barker is the interim chairman and he is tied in closely with hospitals, so that might prove an obstacle.

    • Rule number one: the hospitals and their Richmond lobbyists control state health policy with an iron hand. When their campaign contributions don’t do the trick, the are not shy about using their enormous regional economic/political power to threaten. They were awarded that power, by the way, by COPN over the past 47 years. I witnessed a state Senator threatened live at a public hearing by the COO of a major Virginia health system who promised to drive out his employees to vote against that Senator if he didn’t behave. He even provided the number of his employees in that Senator’s district.

      For the chances that the state will step up and institute a HEZ program, see Rule number one. If the hospitals OK it, it will pass. If they do not, it won’t.

      • COPN is the reason why we have financially fragile hospitals in low income regions?

        You’ll have to connect some more dots for me to see that.

        how does that work?

        • We have financially fragile hospitals in rural regions for the same reason the regions themselves are fragile – outmigration of the young people. There is an entire missing generation from ages 20 – 40 in many rural areas. That does not discount the scourges of drugs, poor housing and other social determinants of health. For most medical and nursing school graduates, there is not enough money in the world to make them live in some of these locations. By the ages they get all of their credentials, they are either already married or looking to meet someone and raise families. Living in counties with bad schools and few cultural amenities is not going to happen – maybe for a couple of years as a way to give back, but not permanently.

          The hospital systems that own hospitals in poor areas find themselves with a lack of patients. Some of them staff only 10% of their beds. They are able to support the money-losing rural hospitals because of the money they make by transferring complex cases to their urban medical centers. COPN is not the reason we have financially fragile hospitals in low income regions, but it also no part of the solution. COPN is designed to control growth, not oversee decline. We only have two independent rural hospitals left in Virginia – in Grundy and Hot Springs. Buchanan General Hospital in Grundy is well positioned to join profitable Ballad Health if they wish. Hot Springs (Bath County Community Hospital) is quite geographically isolated. The closest regional medical center with level 1 trauma center capabilities is in Roanoke, a two hour drive or a long rescue helicopter flight. The closest better hospital is Carilion Stonewall Jackson in Lexington. While itself a small Critical Access Hospital, Stonewall Jackson has better facilities and capabilities that Bath County Community. Because of the mountain roads, however, it is still an hour and a quarter away. Hope that helps.

          You are looking for a role for government here. The only one that would matter to the isolated rural hospitals would be a government-funded transportation system for patients and relatives to better hospitals. There are already programs that pay them more from government insurance programs to help with the finances, but the government can’t issue them patients or trained medical staff. Medicaid already offers free transportation to the patients it insures, but it is not clear how many take advantage of it. Primary medical and dental care is a different question. The Health Enterprise Zone bill was designed to address that but the Democrats killed it. You will have to ask them why.

          • Yes, but they are “missing” because there are no jobs for them not because they just left!

            The question is how do we care for the folks who are still there?

            Right now, we have basically abandoned them and they die at rates seen in 3rd world countries.

            It’s more than just hospitals and transportation.

            Hospitals are the tail end of untreated and unmanaged disease.

            I’m actually not “looking” for a role for government.

            I’m asking if there is a legitimate role of government or do we think that it’s up to the “market” and charity to fill the gap?

            I still do not see how COPN has much to do with this as that kind of activity is almost non-existent in poor rural regions.

            I don’t know about the “health enterprise zones” but I suspect it was proposed by GOP without seeking input from the DEMs in co-sponsoring it.

  3. Here’s some interesting data on life expectancy:

    Petersburg City overall 68.1 black 69.3 white 63.4
    Fairfax overall 85.1 black 83.2 white 84.2

    https://www.countyhealthrankings.org/app/virginia/2019/measure/outcomes/147/data?sort=sc-2

    to what do we attribute these differences? Is access to good health care one of the reasons?

  4. Thank you for your dedication to healthcare. As a resident of Petersburg, I appreciate your support. I would like to suggest you send this letter to the Progress Index. Many of the problems here stem from lack of voice and knowledge. Your letter provides both. Again, thank you.

  5. ksmith8953 is likely correct about the “n’ number but the bigger picture here is that folks who live in lower income places typically do not live as long as those who live in higher income urban regions and it is reflected in the hospitals that typically are serving a lower income demographic which results in lower hospital revenues and higher numbers of charitable/not paid for services.

    That same demographic typically does not get routine primary care either which results in diseases not detected and not managed and those diseases take a higher toll than in places where people see a primary care provider on a regular basis which does detect and treat diseases.

    So we KNOW this is true or we ought to know – the data is there even if there are some anomalies in some smaller population data, the preponderance of the data shows a clear correlation between income demographics and life expectancy.

    Virginia is just a part of a much larger demographic with respect to life expectancy.

    So is this a legitimate responsibility of government to deal with or should it be left to the “market” and charitable organizations to deal with?

    Is this a “liberal” or “conservative” issue?

  6. I have a very different view of Bon Secours given on how it treats its own people compared to how they are treated elsewhere.

  7. well… clue us in……. please!

  8. There is a problem with Catholic hospitals and the application of “religious freedom” and refusal of care. Given a choice, I would not choose such a hospital.

Leave a Reply