Don’t Blame Northam for Virginia Medicine’s Structural Flaws

Governor Northam when announcing stay-at-home order this morning.

by James C. Sherlock

I have to give Governor Ralph Northam a partial pass on a key issue. Much of the criticism directed at him is for actions or inactions that are based on incomplete data and, as a a consequence, incompletely informed staff assessments concerning the business of healthcare in this state. That is a structural problem in state government, not a leadership problem.

The Department of Health is not designed as a crisis action agency and has no authority to oversee Virginia’s healthcare system as an industry. It administers Certificate of Public Need regulations and oversees the practice of medicine, not the business of medicine. No agency regulates that business except in the narrowly focused and demonstrably failed COPN system. There is no such regulation because Virginia’s integrated health systems don’t want their businesses to be regulated, and not any other reason.

Virginia’s Board of Health is not designed or populated to function in a crisis and it hasn’t in this one (See this post from Feb. 22). The public health issues addressed by the Virginia State Board of Health include the prevention and control of chronic disease, not pandemics.

Likewise, the Board of Medicine is not structured to help with pandemics. The Board of Medicine prescribes regulations necessary to ensure continued practitioner competence, not crisis readiness.

The State Commerce Commission regulates health insurance, not the business of healthcare delivery. The commission possesses only information it needs to carry out that function.

So, the COVID-19 crisis started with the state government having little information about such things as inventories of emergency equipment and supplies — inventories for which it had never defined specific requirements. The state may still have no such information.

Thus, in making state emergency orders affecting both health insurance and healthcare delivery, Northam may not have possessed the information he needed to do so with confidence.

When the crisis wanes, Virginia must create a state health commission with active oversight, regulatory and coordination roles in the business of healthcare and the business of health insurance on the model of the Maryland Health Care Commission (MHCC).

The Maryland Health Care Commission was created in 1999 to streamline health care regulation and provide coordinated information to the Governor, the Health Commissioner and the public. The commission is organized around the health systems it evaluates, regulates, or influences. It uses data gathering, public reporting, planning and regulation in a coordinated attempt to improve quality, address costs, and increase access.

The Maryland Health Care Commission is an independent regulatory agency whose mission is to plan for health system needs, promote informed decision-making, increase accountability, and improve access in a rapidly changing health care environment by providing timely and accurate information on availability, cost, and quality of services to policy makers, purchasers, providers and the public.[1]

The qualifications of the Commissioners and the numbers of executive staff of the MHCC far exceed those of any such panel in the government of Virginia.

The Commission in FY 2017 had an appropriation for 57.9 full time staff positions[2]. It has four centers:

  1. Center for Health Care Facilities Planning and Development, similar to the COPN Division of the Virginia Department of Health.
  2. Center for Health Information and Innovative Care Delivery. The Center gathers clinical information as well as business information, serves as a policy center for health information technology, and manages the Commission’s Advanced Primary Care programs.
  3. Center for Analysis and Information Services. This Center’s main function is to rapidly create, securely maintain and analyze large healthcare databases and to interpret population surveys. The Center produces reports to guide health policy, including reports on health expenditures, health insurance, the uninsured and uncompensated care.
  4. The Center for Quality Measurement and Reporting. This Center provides meaningful information to consumers about the quality and outcomes of care provided by Maryland hospitals, long-term care facilities and health benefit plans.

In FY 2017, the Commission was appropriated nearly $35 million, which included $15 million for MHCC operations and $4 million for the state health information exchange. Also included was a special fund appropriation of $12 million for a Trauma fund, which MHCC administers, and $3.2 million for the Maryland Emergency Medical Systems Operations Fund. The Maryland Health Care Commission’s budget is funded by a user fee assessment on hospitals, nursing homes, payers and through the licensing process of the Health Occupational Boards. The assessment is designed to maintain a surplus of 10% of the budget.

Going into a crisis with Virginia’s current system does not match hopes with reasonable expectations. Virginia needs to emulate the Maryland example, both in day-to-day coordinated oversight and regulation of the business of healthcare, especially the state-granted regional monopolies, and in crisis response.  We can’t put the Governor and the citizens of Virginia in this situation again.


[2] The Maryland Health Care Commission, Report to the Governor, FY 2017 (through June 30, 2017).  The annual report meets the requirements in state law that the Commission report annually to the Governor, the Secretary of Health and the Maryland General Assembly