The information came from a report made by Sonia Chambers, Chair of the West Virginia Health Care Authority to the Legislative Oversight Commission on Health and Human Rescources Accountability.

Below is a copy of the article from the Charleston Gazette’s website edition.

January 12, 2005

Hospitals get bleak forecast

By Phil Kabler

Staff writer

Fewer than half of all acute-care hospitals in the state are profitable, and the financial outlook for the industry is getting worse, the chairwoman of the state Health Care Authority told legislators Tuesday.

“There are a number of facilities in West Virginia that are starting to have serious financial difficulties,” Sonia Chambers told the Legislative Oversight Commission on Health and Human Resources Accountability.

For 2003, the most recent year available, only 19 of the state’s 41 acute-care hospitals reported a profit, according the HCA report.

Of those, only four had operating margins of 5 percent or better, topped by Greenbrier Valley Hospital at 9.3 percent, she said.

For the remaining 22 hospitals, operating losses ranged from 0.2 percent to nearly 23 percent at Welch Community Hospital.

“The financial outlook continues to slide,” Chambers said. “A number of West Virginia hospitals do not have the financial reserves to continue to sustain losses.”

She said hospital expenses increased only 6.6 percent in 2003, but said patient revenue has declined as underinsured or uninsured patients have increased.

Chambers said a particular concern is the increasing numbers of uninsured West Virginians between the ages of 50 and 64, who lost their health insurance coverage through company bankruptcy or downsizing.

Hospitals also had to write off as uncollectible about $400 million in charity care and bad debts in 2003.

The amount of uncompensated care — 6.2 percent of all patients — was roughly unchanged from 2002, Chambers said.

Steven Summer, director of the West Virginia Hospital Association, said the authority’s report reaffirms what the hospital industry has been saying for some time.

“The bottom line is, most hospitals can’t survive on income from patient care,” he said. “The biggest challenge we face is the growing population of people with non-commercial insurance.”

He said a significant percentage of West Virginians are insured through government-operated plans, such as Medicare, Medicaid, and the Public Employees Insurance Agency, which he said set low reimbursement rates for health-care services.

Closure or consolidation of hospitals would have a serious impact on the state, and not just on the quality of health care, Chambers noted.

Hospitals are a significant force in the state’s economy, the authority’s report found, accounting for 36,411 full-time jobs and a payroll of $1.8 billion in 2003.

To contact staff writer Phil Kabler, use e-mail or call 348-1220.

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The Authority set January 7 as the date for initial briefs to be submitted by both parties as a result of the Reconsideration Hearing held on December 14.

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The charts show a reasons why West Virginia needs to work hard to attract more businesses to West Virginia. As the non-governmental payor pool shrinks those left will take on a greater burden of the cost shift. At some point the breaking point will occur where business will no longer be able to make up the difference and West Virginia hospitals will no longer be able to cover the cost of health care based on the rates paid by governmental payors.

Check out the following charts:

• Cost Shifting
• Distribution of Expenses
• Shortfall in Payments (Cost to Charge Comparison)

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The West Virginia Health Care Authority’s 2008 Annual Report for FY 2007 is now available. The report summary was provided to the West Virginia Legislature by Sonia Chambers, Chair of the WVHCA. The report contains significant information about the state of health care in West Virginia.

The Executive Summary states:

Hospitals:
Overall, West Virginia hospitals remained relatively stable, reporting profits of $184.5 million or 4.4% of net patient revenue (NPR), up from $176.7 million (4.5% of NPR) in FY 2006.

Acute Care Hospitals
The total profit margin for the 35 general acute care hospitals increased by almost 1%, with profits of $165.7 million (4.4% of NPR), up from $123.8 million (3.5% of NPR) in the prior year.

Critical Access Hospitals (CAH)
As a group, the profitability for CAHs continued to improve for the fourth straight year. The aggregate profit was $5.8 million (2.3% of NPR). In FY 2006, profit was $4.3 million (1.8% of NPR).

Long-term Acute Care Hospitals (LTCH)
The two facilities in FY 2007 reported a profit of $1.5 million (5.9% of NPR), a decline from the FY 2006 profit of $3.3 million(12.4% of NPR).

Psychiatric Hospitals
The psychiatric hospitals had an aggregate loss of $8.3 million(35.8% of NPR), with the two state psychiatric hospitals losing $9.6 million combined and the two private hospitals earning profits of $1.3 million. The prior year’s overall loss was $702,000 (2.0% of NPR).

Rehabilitation Hospitals
The five rehabilitation hospitals showed a return to more normal profit levels with aggregate profits of $19.8 million (22.1% of NPR). In FY 2006, these hospitals reported an aggregate profit of $46.0 million (51.7% of NPR) due to the sale of a facility.

Other Facilities:

Nursing Homes
The overall profit margin for the state’s 106 nursing homes increased by 1.5%. Aggregate profits of $44.8 million (6.5% of NPR) were reported, an increase over the $32.6 million (5.0% of NPR) reported in FY 2006.
Aggregate net patient revenue increased $38.6 million in FY 2007; expenses increased $25.1 million.

Home Health
Overall, home health agencies reported total losses of $2.3 million on $84.1 million total revenue; 32 of the 66 agencies were profitable. Eleven home health agencies were acquired during FY 2007.

Hospice
Hospice profits for the 19 agencies were $8.3 million, compared to $9.1 million in FY 2006.

Behavioral Health Facilities
Eighty-nine behavioral health providers reported aggregate profits of $15.1 million, 2.9% of total revenue; 57 of 89 facilities were profitable.

Methadone Treatment Facilities
The aggregate profit for the eight facilities was $6.1 million, 29.7% of total revenue.

Ambulatory Surgical Centers (ASC)
Eleven reporting certified ASCs had an aggregate profit of $5.2 million, 21.7% of total revenue.

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These revisions were made by the Authority after Governor Manchin rejected the previously proposed standards. The proposed standards continue to modify the requirements for the participants in the demo pilot project involving offering therapeutic cardiac catheterization.

The standards distinguish between Primary (Emergency) Percutaneous Coronary Intervention (Primary PCI) which involves providing cardiac catheterization services within 120 minutes of an emergency myocardial infarction and Elective Therapeutic Catheterizations. The proposed standards also set new need threshold levels for elective therapeutic catheterization.

Written comments on the proposed standards may be submitted to Dayle D. Stepp, Director of Certificate of Need, no later than May 23, 2008.

I previously reported on the modifications to the standards here, here and here.

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Written coments on the proposed certificate of need standards may be submitted to Dayle Stepp, Director of Certificate of Need no later than June 23, 2006.

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The certificate of need law requires health care providers, including hospital, physicians, long term care facilities, hospice providers, home health agencies and other health care providers to first seek approval prior to expanding health services, incurring capital expenditures above a particular threshold, purchasing certain medical equipment and developing or acquiring new health facilities or services.

Below is a summary of the major changes to the law that will go into effect 90 days from passage on April 3, 2009:

• The bill raises the capital expenditure threshold and major medical equipment threshold from $2,000,000 to $2,700,000.
• Eliminates lithotripsy from certificate of review.
• Amends the fee structure of the Health Care Authority for certificate of need reviews.
• Provides that in specified instances nonhealth-related projects are not subject to certificate of need review.
• Provides that in specified instances certain ambulatory health care facilities are not subject to certificate of review.
• Eliminates from certificate of review acquisition of any health care facility outside of West Virginia by a West Virginia health care facility.

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Governor Manchin has until Friday (tomorrow) to decide whether he will approve the revised standards developed by the West Virginia Health Care Authority or send them back with recommended modifications.

For more history on the standards with links to the revised standards see my previous post.

UPDATE (7/18/08): This morning Governor Manchin issued the following statement indicating that he is sending the proposed Cardiac Catheterization standards back to the West Virginia Health Care Authority to revise and clarify the “medical transport drive time” language.

The Daily Mail reports on the decision.

STATEMENT FROM THE GOVERNOR ABOUT HEALTH CARE AUTHORITY’S PROPOSED ANGIOPLASTY STANDARDS

Contact: Lara Ramsburg, 304-558-2000

Gov. Joe Manchin today released the following statement about his approval, WITH EXCEPTION, of new West Virginia Health Care Authority rules that would allow some smaller hospitals in the state to perform angioplasty and other cardiac catheterization procedures:

“Any time we’re charged with making a decision that affects the quality of health care for our citizens, it’s a decision that must be carefully considered. In this case, we’ve taken a very close look at data gathered over several years, and a number of other facts about the ability of our hospitals to perform heart angioplasty procedures that have the potential to save hundreds of lives, especially given our state’s high heart disease rates and rural nature.

“Based upon this research, and the recommendation of the Health Care Authority, I am approving the majority of the standards that will give our citizens easier access to important emergency heart procedures; however, I have directed the Health Care Authority to revise the rules as they pertain to elective cardiac catheterization service and return them to me for reconsideration as soon as possible.

“Due to the ambiguity in the term ‘medical transport drive time,’ the current language in the proposed standards does not make it clear as to which hospitals could provide the elective procedure to their patients, so I believe the standards should be written to make sure that the appropriate hospitals are allowed to provide this service, under the strict guidelines and monitoring of the Health Care Authority.

“This decision, in its entirety, is solely based upon one objective – to provide all of our citizens, regardless of their location, access to the best possible medical care in their time of need.”

– Gov. Joe Manchin

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The proposed Computed Tomography Services CON Standards provide a new need methodology process for new, additional or replacement CT scanning services by hospital and non-hospital applicants. The proposed standards set forth a weighted need methodology threshold of 3,000 scans per year and provide an exemption for CT scanners costing less that $300,000.

Although I’ve not read anything official from the Authority, today’s Charleston Gazette article indicates that the Authority will accept comments on the proposed standards during the next 30 days and the Authority’s board will vote on the regulations at its September meeting. The new standards will then be sent to Governor Manchin for final approval. UPDATE: The Authority has now posted information about submitting comments. The deadline for submitting comments is August 10, 2007.

The Charleston Gazette reports on the new standards today in its article, “Doctors’ offices to be allowed to buy CT scanners”. Additional background information on the development of the CT Standards can be found on the Authority’s CT Services Workgroup Meeting site. For comparison, the old 1992 CT Standards are available.

UPDATE 8/22/07: It appears that the Authority has extended the deadline for submitting comments until August 31, 2007 based upon the Notice of Public Comment listed on the Authority’s website. Also the Authority has uploaded the comments submitted on the proposed CT Standards.

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