Category Archives: Consumer protection

Consumer protection

COPN Monopolies Depress Income for Virginia Healthcare Professionals Without Lowering Costs

The Business of Healthcare

by James C. Sherlock

Virginia is among the richest states in the country.  

We are ranked ninth among states with the highest median household income in the 2019 (latest) Census Bureau American Community Survey. Virginia median household income was $74,222 and the U.S. as a whole was $62,843.

But Virginia has a Certificate of Public Need (COPN) law among the most stifling of competition in the nation. The law itself and the regional monopolies created combine to suppress both opportunity and income for healthcare professionals.  

The monopolies don’t just control the healthcare delivery market, they also control the labor market.  

This essay will illustrate the effects of COPN and COPN-generated monopolies in depressing wages, and thus on the willingness of medical professionals to practice here. And then show you those lower wages don’t save consumers a dime. Continue reading

The Real Nursing Home Scandal in Virginia

Canterbury Rehabilitation and Healthcare Richmond

by James C. Sherlock

Mike Martz has written three excellent columns that have appeared in the Richmond Times Dispatch starting March 19.  Headline of one: “Virginia tries to move ahead of national ‘reform agenda’ for nursing homes.”

The gist of it was that a couple of national nursing home industry organizations have taken advantage of the public consciousness of the COVID tragedies to produce a “reform agenda” centered around significantly higher Medicaid payments.

Unreported so far is that they also want weaker inspections. More about that below.

We all applaud any attempt to “improve operating standards for nursing homes, initiatives to boost the facilities’ workforce, and efforts to give residents more privacy and protect them from poor-performing nursing homes” as Martz wrote. Who could oppose that?

The financials of nursing homes lead me to agree that higher Medicaid payments will be required to accomplish those goals. But the higher payments need to be accompanied by better oversight to make sure that the money brings the desired outcomes.  Continue reading

Medicaid and Medicaid Rate Increases Boost Virginia Hospital Profitability

The Business of Healthcare

by James C. Sherlock

Virginia in 2018 both expanded Medicaid and increased Medicaid reimbursement rates.  

Those changes orchestrated by Virginia hospitals took effect in 2019 and resulted in a major financial windfall to those same hospitals.

I have compared the 2018 and 2019 Hospitals Operating and Total Margins spreadsheets published by the state through its contractor vhi.org. They provide detailed financial performance information for every hospital in Virginia. The 105 hospitals in 2019 included acute care, rural critical access hospitals, children’s, psychiatric, rehabilitation and sub-acute hospitals.

We will see that when the Medicaid changes kicked in in 2019, Virginia’s wealthy urban hospital systems got richer.  

But we will also see that those same changes rescued the rural hospitals from barely breaking even in 2018 and enabled them as a class to book extraordinary profits in 2019.

We will ask at the end of the discussion whether the state-provided outsized profitability of Virginia’s untaxed non-profit hospital systems may warrant a re-examination of their tax exemptions. Continue reading

Podcast: How the General Assembly Has Changed

By Peter Galuszka

I haven’t contributed much to BR lately since I am slammed with non-Virginia work. I did manage to help out on a Podcast about how the General Assembly has changed the state over the last two years as Democrats have gained power.

This Podcast is produced by WTJU, the University of Virginia radio station. I do a weekly talk show on state politics and economics and, on occasion, work on Podcasts.

Joining me is Sally Hudson, a delegate from the Charlottesville area. She is Assistant Professor of Public Policy, Education and Economics. Sally studied at the Massachusetts Institute of Technology and Stanford and is one of the youngest members of the General Assembly.

I hope you enjoy it.

Private Sector Screws Up Vaccine Dispersal

By Peter Galuszka

For more than a year, there has been a stream of criticism of government handling of the COVID vaccine.

On this blog, there has been a relentless pounding of Gov. Ralph Northam for his role in trying to navigate the pandemic that has so far killed more than 500,000 Americans. This is a far greater number than all of U.S. troops killed in World War II.

Now, two members of Congress, both moderate Democrats, are raising questions about the current system of providing vaccines. The private sector has a lot to answer for.

According to U.S. Rep. Abigail D. Spanberger (7th District) and Rep. Elaine G. Luria (2nd District), the current system is confusing, as large pharmacy companies CVS and Walgreen try to handle giving people protective shots.

Of special note is their concern that the current system favors the rich over the poor. In their letter to Dr. Rochelle Walensky, director of the Centers fort Disease Control and Protection, they wrote:

“Unfortunately, the complicated array of programs has caused significant confusion and frustration for public health officials and the general public. The varied eligibility requirements and appointment-making procedures favor the technologically savvy and well-resourced who can navigate the different systems. Retail pharmacy partners have been reluctant to coordinate their outreach and appointments with state public health officials’ priorities, meaning vulnerable individuals patiently waiting their turn according to health department guidelines could be passed over.’

Continue reading

What Texas’s Crisis Means for Virginia

by Peter Galuszka

The Texas freeze and ensuing energy disaster has clear lessons for Virginia as it sorts out its energy future.

Yet much of the media coverage in Virginia and certainly on Bacon’s Rebellion conveniently leaves out pertinent observations.

The statewide freeze in Texas completely fouled up the entire energy infrastructure as natural gas pipelines and oil wells stopped working, coal at generating plants iced over and wind turbines stopped working.

Making matters much worse, Texas opted not to have power links with other states. Its “free market” system of purchasing power meant utilities skimped on maintenance and adding weather-relative preventive measures such as making sure key generation components were weatherproof.

The result? Scores dead and millions without electricity. Here are more points worth considering in Virginia:

Climate Change is For Real

It is a shame that so much comment in Bacon’s Rebellion is propaganda from people who are or were paid, either directly or indirectly, by the fossil fuel industry. Thus, the blog diminishes the importance of dealing with climate change in a progressive way.  Continue reading

Business as Usual in the Virginia Senate – “Dominion Dick” Saslaw Delivers

Sen. Dick Saslaw (D)

by James C. Sherlock

Associate Press headline Feb. 15: “Virginia Senate Democrats kill electric rate reform bills.”

Fish gotta swim, Senator Richard L. “Dominion Dick” Saslaw gotta be Senate Majority Leader and Chairman of the Virginia Senate Commerce and Labor Committee.

Saslaw has received nearly a half million dollars in campaign donations from Dominion Energy and its previous CEO, Thomas Farrell. The Chairman literally would be cheap at ten times the price.

From the AP:

“The Senate Commerce and Labor Committee on Monday swiftly killed the last of more than half a dozen bills this session that aimed to reform Virginia’s system of electric utility rate review, which is seen by Wall Street investors as favorable to the utilities and by critics as an example of legislative capture by companies with an outsize influence over the General Assembly.”

Dominion sweeping all before it actually gives some sense of stability to the General Assembly.

Below is a list of campaign donations by Dominion Energy and Tom Farrell to the Senators who voted with Dominion on the closest vote, 8-7 to table Virginia HB1132 Electric utility regulation; initial triennial review, requirements, sponsored by Del. Jay Jones (D). Continue reading

All According to Plan – the Biggest Government Scandal in Virginia History

by James C. Sherlock

The Virginia Mercury published  an excellent article on the difficulties being encountered in Virginia in scheduling COVID shots.

But who could have anticipated the need? Who indeed.

This story is part of the single biggest government scandal in Virginia history and the press is either ignorant of the underlying issue or has ignored it. I think ignorance is more likely. Certainly Governor Northam’s executive branch made every effort to hide it from them.

I say the executive branch because I firmly believe — and hope really — the Governor himself never had a clue.

The now-hidden-from-public-view Commonwealth of Virginia Emergency Operations Plan, Hazard-Specific Annex #4 Pandemic Influenza Response (Non-Clinical), Virginia Department of Emergency Management August 2012 (the Plan) required planning and exercise of a vaccine distribution plan and much more.

Never happened.

The Plan specified planning, exercise and operational responsibilities for
the following executive branch organizations: Continue reading

Holding Richmond Public Schools Accountable — Part I

by James C. Sherlock

We have discussed here the failures of the City of Richmond Public Schools (RPS) in educating its economically disadvantaged children, as well as the abysmal performance of Black children in its schools.  

I intend to help readers understand how it manages to fail repeatedly even with major federal funding as guardrails and state oversight officially in place.

Title I of the Elementary and Secondary Education Act (ESEA) provides financial assistance to local educational agencies (LEAs) such as RPS and its schools with high numbers or high percentages of children from low-income families to help ensure that all children meet state academic standards.

It is useful to drill down into the details of that program so that readers can understand how every school district in Virginia is supposed to plan and execute the education of poor kids to improve their chances of success.

The question that will remain when I finish will be accountability.  

How does a system like the Richmond Public Schools continue to submit similar paperwork every year and every year fail to meet its stated goals? Where is the accountability? Why do the people of Richmond put up with it?  Continue reading

Basic Child Literacy Cannot Be too Much to Ask of Richmond City Public Schools

by James C. Sherlock

Half of Black 4th graders in Richmond public schools couldn’t read in 2019. That is not OK.

It is way past time to demand both better performance and accountability. Clearly neither the city of Richmond nor the Commonwealth has done that effectively.

So I have filed formal complaints with the federal government to see if the Departments that provide federal money to the Richmond City Public School District can establish accountability for how all of that money has been spent.

Jason Kamras currently serves as the Superintendent of Richmond Public Schools (RPS). He has first-rate credentials — National Teacher of the Year in 2005, undergraduate Princeton, masters in education from Harvard. Worked in leadership positions in D.C. Public Schools before coming to Richmond.

He is the highest-paid superintendent in Richmond history at $250,000 annually. His initial three-year contract was slated to expire this summer.  He just received a 4-year extension on a split 6-3 vote by the Richmond School Board.

The performance of Mr. Kamras’ Richmond School District is cataclysmically bad.   Continue reading

Consumer Reports Misleads on Virginia EV Bill

Great Seal of Virginia

by James C. Sherlock

Few media outlets are as influential with their readership as Consumer Reports or as active in soliciting direct contact of public officials on issues that management feels are important to that publication’s political values. That is their right, but false statements in support of their positions is a violation of public trust.

I received yesterday afternoon in my email a solicitation for political action in Virginia pushed out by Consumer Reports to all subscribers. It read:

Earlier this week, the Virginia House of Delegates approved an exciting piece of legislation that would allow the state to make it easier for consumers to buy fuel-efficient and electric vehicles at car dealerships in the Commonwealth.

That in turn could help drivers save money on fuel and reduce our air pollution: a win-win no matter how you slice it.

But before the bill can get signed into law, it must pass through the Senate by next week. Can you send a message to your VA Senator now and ask them to vote YES on House Bill 1965?

Continue reading

Virginia’s Legendary Corruption Blocks Antitrust Enforcement

Great Seal of Virginia

by James C. Sherlock

Readers of this blog have indicated an unquenchable appetite for information about and discussion of Virginia’s Certificate of Public Need (COPN) law and its administration.

This essay informs on the negative impacts of the COPN law and the Virginia Antitrust Act (the Act) itself on the enforcement of antitrust laws against Virginia’s regional hospital monopolies.

First, know that the business activities that some of Virginia’s hospital monopolies exhibit can already be deemed illegal under both federal and state antitrust laws. But the Act gives them a special dispensation, complicates both state and federal antitrust enforcement and results directly in the in-your-face anticompetitive activities we see every day.

The federal government (and once even Bob McDonnell as Virginia Attorney General) occasionally have intervened to block interstate mergers or in-state acquisitions before they occur, but always within the federal administrative and court systems, and they have never challenged COPN decisions.

But no government agency has ever sued over the business activities of Virginia’s COPN-constructed monopolies. Continue reading

DePaul Hospital’s Closing Presents a Unique Opportunity for Hampton Roads

De Paul Medical Center Jan. 29, 2021. Photo Credit: James C. Sherlock

by James C. Sherlock

Not too long ago, before the decline of the malls and COVID, the healthcare community coined what they called the Nordstrom Rule.

The meaning was that if you wished to optimize profits in your healthcare business, build it close to a Nordstrom. The theory was that Nordstrom had already done the market research to identify concentrations of wealthy customers.

I wrote yesterday about the Sisters of Charity and Bon Secours, Catholic charities both. The Sisters were not in it to serve wealthy patients. They purposely located their hospitals among the poor. So 19th and 20th century of them.

Sentara, a more sophisticated public charity, avoids locations close to the poor.

In 1991, Sentara purchased the Humana Bayside Hospital in Virginia Beach, renaming it Sentara Bayside Hospital. That cleansed Virginia Beach of a competitor. But Bayside served Virginia Beach’s largest concentration of economically disadvantaged minorities. So Sentara closed it at the first opportunity.

The Virginia Department of Health brokered the closing of Bayside in 2008 under the cover of the Certificate of Public Need (COPN) process that fatally wounded DePaul, allowing Sentara to relocate the Bayside beds to the new Sentara Princess Anne, far from the minority citizens of Bayside.

The closest hospital for many residents served by Bayside was then, you guessed it, DePaul. No longer. Continue reading

Unintended Consequences of Minimum Wage Hikes

Credit: prescottenews

by James C. Sherlock

Sen. Louise Lucas, D-Portsmouth, and Del. Lashrecse Aird, D-Petersburg, contributed an op-ed titled Home health workers at risk without legislative action this morning in the Virginian-Pilot. They will be surprised to read that I agree with every word.

And that I would go farther.

Unintended consequences in the government economy

Lucas and Aird have authored a compelling, well-written narrative of the problems faced by home health workers and their employers under two Virginia programs that have not been reconciled:

  • the rise of the Virginia minimum wage from $7.25 an hour to $9.50 an hour, a 31% increase; and
  • the lack of a corresponding raise of the Medicaid reimbursement rate for home care workers.

As the legislators point out: Continue reading

Another VA Gas Pipeline Project Dies Under Fire

Still Alive? The northern part of the Header Improvement Project. Source: VNG Application.

By Steve Haner

Another proposal to build a pipeline pumping wealth and prosperity into the Virginia economy has been brought down. That is my impression of what the impact would be of expanding natural gas supply to our state – added wealth and prosperity. This beneficial project is not to be.

Virginia Natural Gas has notified (read it here) the State Corporation Commission that it is abandoning plans for the Header Improvement Project, a major expansion connecting existing major transportation pipelines with its Hampton Roads service territory. That also ends its plans to provide service to two merchant electricity generating plants in Charles City County that would have been served by the additional supply.

The dispute over the expansion was discussed here earlier this year. The project drew the usual environmental objections, based on their firm belief that natural gas pipelines deliver death, but the SCC itself sank the plans over its skepticism that one of the electric generation plants would actually get built and need the supply. Writes VNG through counsel:

Continue reading