by James C. Sherlock
More than eleven months ago I wrote an essay titled, “The Legal Corruption of (Virginia’s Certificate of Public Need) COPN.” That system needs overhaul, not adjustment, and the people of Hampton Roads need help. The Governor needs to lead in both efforts.
This is the story of the public, state-sponsored execution of DePaul and a simultaneous attempt to create a bleak future for Bon Secours in Hampton Roads.
COPN mortally wounded that hospital in 2008. It lasted until now as Sentara gnawed away at it Its death was announced this past week. Pending is how Bon Secours will look at its future in Hampton Roads.
Where healthcare services in South Hampton Roads stand now
With the closure of DePaul’s inpatient facilities and emergency room, Sentara has five general hospitals serving South Hampton Roads’ 1.2 million people: two in Norfolk, two in Virginia Beach and one in Suffolk. Portsmouth’s civilian hospital is Bon Secours Maryview. Chesapeake’s general hospital is state-chartered Chesapeake Regional Medical Center.
Hospital services in the two largest cities in Virginia, Virginia Beach and Norfolk, are entirely under the control of Sentara.
I just opened the Sentara website and it announced that Sentara had 264 locations of care near my home Virginia Beach. They operate hospitals, outpatient care facilities, imaging centers, home care services, emergency facilities, primary care offices, therapy and fitness operations, schools, urgent care facilities, specialists offices and senior care facilities.
Sentara’s captive HMO and insurer Optima is powerful in Hampton Roads and makes life difficult for Sentara competitors. Finally, Sentara controls a large percentage of referrals through its massive network and of course has its own MyChart service, making the use of facilities and professionals other than Sentara;s involve a lot of phone calls.
As a direct result, Sentara’s five south Hampton Roads hospitals made 87% of the operating revenue of the entire corporation in 2017.
On the flip side, Maryview in Portsmouth and Chesapeake Regional remain under constant pressure from Sentara, and combined have lost money for years on their hospital operations here.
Virginia has both and Antitrust Act and and an attorney general. Perhaps those two can get together on this.
How was DePaul, and with it Bon Secours in South Hampton Roads, mortally wounded?
The most infamous COPN decision in state history scandalized Virginia in March of 2008. It awarded two hospital certificates to Sentara and denied three parallel applications of Bon Secours on the same date.
Bon Secours, acknowledging that DePaul was in trouble, had developed what it called a “bold new vision” for health care in Hampton Roads, one that would bring a choice of health care providers to Virginia Beach and Suffolk, which were then served solely by Sentara hospitals.
It needed success in the COPN process to execute that vision. It never had a chance.
Bon Secours requested COPN approval for redistributing DePaul’s 238 remaining licensed beds among a new 114-bed hospital in the Princess Anne section of Virginia Beach, a 60-bed hospital in northern Suffolk and a new, downsized 64-bed facility at DePaul’s location on Granby Street. Approval of that proposal, as was documented by Bon Secours in its application, was absolutely necessary to secure the financial future of Bon Secours in South Hampton Roads.
In March 2008, the Deputy Virginia Health Commissioner acting for his boss, an appointee from Sentara who recused herself, decided there wasn’t a public need for the new hospitals Bon Secours proposed, just for the ones that Sentara wanted.
He also determined that the replacement hospital left at DePaul would be too small and have too few services to meet the needs of Norfolk’s residents. Good call.
That decision sealed the Sentara monopoly in South Hampton Roads and ensured the fiscal distress of Bon Secours here. There is no evidence that Portsmouth’s Bon Secours Maryview will not suffer DePaul’s fate.
Sentara’s winning COPN proposals in 2008
In the same group of March 2008 COPN decisions, Sentara received state approval to relocate its Bayside Hospital beds to build a new 120-bed hospital in the Princess Anne section of Virginia Beach.
Sentara had bought Bayside from a competitor in 1991 to expand its monopoly. But Bayside was not as profitable as wished. Those beds were “re-located” far from the minority populations Bayside had served.
Sentara also got permission to expand Sentara Obici Hospital in Suffolk by 30 beds.
Both DePaul and Bon Secours in Hampton Roads were mortally wounded. The death of DePaul was announced last week.
Sentara’s near-total control of COPN decisions
For those who think the COPN professional staff was wrong, remember the political appointee Health Commissioner is the COPN decision authority, not his or her staff.
I made a study of COPN application decisions in Hampton Roads 2001 – 2018 from the official report of those decisions in October 2019.
The Commissioner has overturned the recommendations of the professional staff of the Division of Certificate of Public Need (DOCPN) in Sentara’s favor 12 times in just 61 applications and sustained denials only twice, resulting in a 95% Sentara approval rate over that period.
The decisions overturned in its favor have been worth billions of dollars to Sentara.
Sentara’s monopoly is also a labor issue
People may think of COPN as something that only affects corporations. They are shortsighted if they do.
Consider your options as a physician or a nurse or medical technician in Norfolk or Virginia Beach in which Sentara controls all of the hospitals, nearly all of the more complex diagnostic equipment that requires COPN approval, and most of the doctors practices and thus referrals.
You can try to go your own way, but good luck. Can you stand the pressure? If you do something that Sentara does not like, what position are you in?
If you go to work for Sentara, how about salaries? Who has the whip hand there?
COPN algorithms and DePaul
I made a suggestion the Governor and local officials offer incentives to Mayo Clinic or Cleveland Clinic or both to take over the DePaul Hospital facilities and make them their own.
Sentara would hate that so, historically, there is evidence to lead us to expect that the Health Commissioner may oppose it.
Mayo Clinic and Cleveland Clinic are rated the two top hospital systems in America and perhaps the world. Their track records show that they will not only take wonderful care of local patients and contribute mightily to regional public health improvements, but also attract patients from all over the mid-Atlantic.
No existing COPN demand model will show a “need” for DePaul hospital of the size that will be necessary to attract a world-class new owner because COPN does not consider demand from outside the local service area. So a Commissioner who wants a reason to reject the project will have one.
That will have to be settled before any discussions can be held with any potential buyer of De Paul, much less the two giants of American healthcare who will very likely want to expand, not contract DePaul’s current capacity.
What is to be done?
Reading all of this, is there any Virginian who thinks COPN has served the people of Hampton Roads well?
I urge the following actions:
- If we must have COPN, then the Governor should propose and the General Assembly legislate that it be administered by an independent regulatory agency on the Maryland example. The State Corporation Commission could host it.
- Settle the Mayo Clinic/Cleveland Clinic COPN demand modeling issue immediately.
- Take state action to break up the near-total Sentara monopoly and its oppressive business activities in South Hampton Roads. That is the Attorney General’s job, and he must act.
Finally, I recommend every doctor, nurse, medical technician and other adult in South Hampton Roads contact his/her General Assembly representatives and the offices of the Governor, his Secretary of Health and Human Resources and the Attorney General’s Antitrust Office to urge the three actions above. Send them a link to this essay if you wish.
Time to act.