Health Care Authority Meeting - Charleston WV

Delegate reports on hospital public hearing

Wednesday, October 14, 2009 The Morgan Messenger

by Delegate Daryl Cowles

Reprinted by permission from The Morgan Messenger

A dozen Morgan County citizens and officials traveled to Charleston last week for the West Virginia Health Care Authority hearing about a Certificate of Need permit for the sale and construction of a new $30 million War Memorial Hospital.

Delegate Craig Blair and I were among those who attended the Tuesday, October 6 hearing. It was disappointing that the hearing couldn’t be in Berkeley Springs. 

The Health Care Authority held the hearing due to an “affected party” challenge filed by City Hospital in Martinsburg and Jefferson Memorial Hospital in Charles Town. These hospitals make up the West Virginia Hospitals-East group.

The daylong hearing was conducted like a court proceeding with sworn testimony, an official record and cross examination of witnesses. Near the end, members of the public were asked for their comments and five Morgan Countians testified on behalf of the need for the permit requested by Valley Health and War Memorial Hospital.

Most of the day was devoted to a disagreement between War Memorial Hospital and WVU Hospitals-East over the certificate-of-need application. The application looked to be quite large with construction plans, specifications and a large six-inch thick binder that counsel and the Health Care Authority staff referred to often.

War Memorial’s application seeks to transfer their current operation to a new $30 million facility. This would include the 16 nursing home beds, the 25 hospital beds and two operating rooms. This was a bid requirement when the Morgan County Commission offered the hospital business for sale last year.

WVU Hospitals, however, has a study by a national firm that suggests the Morgan County hospital should be reduced dramatically. They argued for a maximum of 16 hospital beds and elimination of the nursing home beds. They also questioned the need for a second operating room.

Standing room only

The Hospital Care Authority room was filled to capacity. Valley Health and War Memorial Hospital officials were on one side of a large table opposite officials and attorneys from WVU Hospitals and the Public Employees Insurance Agency.

First, War Memorial Hospital officials made their case for a replacement hospital facility and transfer of the county’s existing permit to the new owner and hospital building.

There was an abundance of information for each side to consider — construction plans, thick binders of information tabbed for reference and stacks of financial data. During testimony, counselors and expert witnesses flipped through the info, citing tab section, book and page.

War Memorial Hospital president Neil McLaughlin testified for an extended time. He described the condition of the present building, the room sizes and the physical challenges of the older structure.

McLaughlin discussed the status of War Memorial Hospital as a Critical Access Hospital. He explained the hospital board’s 2003 decision to commission a study to correct the problems. The study resulted in several options, from doing nothing to building a new hospital on a nearby site. The board decided to build a new facility.

McLaughlin also spoke about the doctors that the hospital has recruited to provide more services locally, and the challenge of attracting physicians with the current building and limited operations.

Attorneys for WVU Hospitals pressed McLaughlin about hospital size, operations and services. They suggested a new hospital should be smaller and offer fewer services. Most of the questions were about technical requirements, health industry standards, rules of compliance for the State Health Plan and Medicare Reimbursement Standards.

WVU Hospitals attorneys centered on the $1.4 million loan from Valley Health to Morgan County for the acquisition of land for the new hospital. There was back and forth banter about the number of beds in the proposed new facility and the number of rooms. Valley Health’s plan provides 25 beds in 17 rooms, some private and some semi-private.

McLaughlin and other Valley Health representatives argued that the 16-bed Extended Care Nursing Home is a vital part of the Morgan County community and it is critical to maintain the unit.

For hours, each side argued the minutiae of regulations, bed needs, financial feasibility, cash flow projections and more. The main disagreements centered around the daily number of patients and services rendered in recent years at War Memorial.

Valley Heath suggested they were simply moving a same-size operation to a nearby location with a better, new facility. They noted their history of moving financially troubled smaller hospitals to profitable success and increased usage in new facilities.

WVU Hospitals countered that Morgan County lacks the demand and that a “superior alternative” would be to limit operations by reducing the number of beds, closing the nursing home and providing fewer services.

It was noted there are 16 Critical Access Hospitals in West Virginia. Thirteen have the 25-bed limit for such a facility and three have from 12 to 18 beds. Valley Health compared the statistics for the smaller hospitals and noted the smaller population levels and lack of growth in those counties.

Also, Valley Health pointed out that three recent certificates of need were granted elsewhere, including Hampshire County where 25 beds were permitted.

Public Employees Insurance

The third party involved in the hearing was the Public Employees Insurance Agency (PEIA). Their attorney called only one witness — Ted Cheatham, the agency’s director. He explained the reimbursement rates for in-state vs. out-of-state health services. He also noted the referral patterns of doctors and suggested a War Memorial Hospital connection with Valley Health could lead to more referrals out-of-state.

Valley Health’s attorney asked about the PEIA reimbursement history with Hampshire Memorial Hospital since Valley Health acquired operations there, but no data was available.

Valley Health asked if anyone had requested the PEIA director to be at the hearings. Cheatham said he had been asked to attend by Tom Jones, president of WVU Hospitals, and Governor Joe Manchin.

Public comment

Morgan County Commission president Brenda Hutchinson led off the public comments. She spoke adamantly and pointedly, setting the tone for others who followed.

Hutchinson shared the process for the sale of War Memorial Hospital to Valley Health and the request for bids. She told the story of the courthouse fire and the rebuilding effort, noting the financial debt that taxpayers were shouldering and the lack of desire by the taxpayers to enter into another long-term debt obligation for a county-owned hospital facility.

This history, balanced with the need for quality health care services as well as jobs and economic development, requires the issuance of the certificate of need, she said. 

Connie Perry explained the local economic and medical service relationship with border areas outside of the state, like Hancock and Hagerstown in Maryland, Winchester in Virginia and the proximity to southern Pennsylvania. She implored Health Care officials to notice the importance of War Memorial Hospital to the county’s economy and future. 

Dr. Ed Quarantillo discussed the need for a new War Memorial Hospital from the perspective of a physician who practiced many years here. He suggested referrals to Winchester Medical System are based on patient care as Winchester provides superior quality compared to other nearby facilities. 

Frank Subasic testified as a citizen and former chairman of the hospital board. He explained the hospital’s difficult times in the past, especially in the late 1980s, and told stories of the successful partnership forged with Valley Health. He noted the current staff’s support for the permit, sale of the hospital to Valley Health and construction of a new facility. 

Local businessman Gat Caperton spoke strongly of the local excitement for a new War Memorial Hospital. He expressed his fear of downsizing and what might happen if the Health Care Authority refused the permit.

Caperton said the level of local health care is critical to the operations of his furniture company, which employs over 100 people. Caperton’s firm self-insures its workers up to a certain amount.

War Memorial Hospital provided 35% of his firm’s care while the second place facility in Hagerstown provided about 25%. Third was Winchester Medical Center at 13%. About 5% of his employees’ care was at Martinsburg City Hospital, owned by WVU Hospitals-East.

Caperton argued that the medical services and care offered by War Memorial Hospital led to more health care dollars being spent in-state.

There was no public comment in favor of lowering the number of beds in the new hospital, eliminating the nursing home, eliminating one of the operating rooms, denying the certificate of need, denying the sale of the county owned hospital or stopping the construction of a new hospital facility.

What now?

The opposing sides must now file written briefs and proposed orders to the State Health Care Authority by mid-November. The Authority is expected to issue a decision in late December or January. The agency’s decision can be appealed through the court system.