Smaller, regional facilities can’t compete with larger providers
The pending closure of Fairmont Regional Medical Center is another example of an ongoing health care trend where smaller, rural hospitals are closing because they cannot compete with larger, urban-based medical providers — not only in West Virginia, but the rest of the country as well.
Joe Letnaunchyn, president and CEO of the West Virginia Hospital Association, said smaller hospitals, such as the 207-bed Fairmont Regional, face numerous obstacles such as reliance on government payers, low patient volume and an older population with chronic conditions.
“When you package it all together, it is hard to compete,” he said.
Hospitals and health systems play a major role in West Virginia’s economy, contributing $10.5 billion to the economy and employing 46,000. Fourteen of the top 100 employers in the state are hospitals. This includes Fairmont Regional, which with 600-plus employees, is the state’s 30th-largest employer.
According to the West Virginia Hospital Association, state hospitals deliver an average of 19,000 babies, provide care for 7 million outpatients and treat more than 1.2 million in their emergency rooms each year.
Despite those numbers, what is happening in Fairmont is nearly identical to what happened at Ohio Valley Medical Center in Wheeling last fall.
Like Fairmont Regional, both Ohio Valley Medical Center and East Ohio Regional Hospital in neighboring Martins Ferry, Ohio, were owned by Alecto Healthcare Systems of Irvine, Calif. When Alecto announced it was closing its Wheeling hospital and the one in Martins Ferry, community leaders were caught off guard.
“Our thoughts are with the community as we face the closure and the effects it will have on our residents as well as the FRMC employees that have been given such devastating news,” said Hanna Turner, Fairmont’s marketing and communications manager, in an email.
“Having a hospital in Fairmont and Marion County is vital to the health and well-being of our community.”
What is happening in Fairmont and what happened in Wheeling is not unique in the state
Earlier this year, Pleasant Valley Hospital in Point Pleasant announced it was cutting 53 fulltime jobs and ending obstetrics services. Hospitals also closed in Bluefield and Richwood. Williamson Memorial Hospital filed for bankruptcy in October, and a nonprofit system that operates hospitals in Charleston and South Charleston announced last month it planned to file for Chapter 11 bankruptcy but would remain open.
Making an offer and having a hospital close
Fairmont Regional was acquired in June 2014 by Alecto for $15.3 million. It is the only hospital in Marion County.
In announcing its decision to close, Alecto, which said it tried to find a buyer, said it lost $19 million during the last three years. It also said it had difficulty attracting physicians, was dealing with an aging facility and faced competition from larger health systems. And lastly, the hospital was not able to qualify as a critical care access hospital or sole community hospital because of its location and close proximity to other medical centers.
David Goldberg, president and CEO of Mon Health System, said they did approach Alecto about purchasing Fairmont Regional.
“We reviewed options and offered alternatives to the owners of Fairmont Regional Medical Center. They were not accepted,” Goldberg said.
“As for staff and clinicians, as a strong believer in community hospitals, our goal is to help the citizens of Fairmont maintain services close to home. A great example is our intention to employ Dr. Pat Bonasso of Fairmont if the state approves our application for a certificate of need,” he said. “The most important future for those who live in the Greater Fairmont region is to have real choice in where they get their health care. Mon Health plans to do all it can to make sure choice of care remains available.”
WVU Health System did not offer any comment when asked if it approached Fairmont Regional about a potential purchase.
Longer drives are not unusual
So what happens to patients who rely on Fairmont Regional for treatment? They have to drive farther to see a doctor, said Stephen Foreman, a professor of Health Care Administration at Robert Morris University in Pittsburgh.
Foreman, a resident of Franklin, Pa., said it’s typical for people in his community to drive a lot to see a doctor. For example, he said, it is routine for people to make the 90-mile drive to Pittsburgh.
“There are economic and political issues here,” Foreman said. “When an area cannot justify a hospital, is it fair to shrug our shoulders and let them drive or relocate or should we subsidize medical care for those who have access issues? Hard questions in a resource-tight world.”
One way larger area health systems have helped smaller, rural hospitals is through telemedicine. WVU Medicine, for example, has a tele stroke program wherein doctors at rural hospitals can use technology to talk to, hold video conferences with and securely share medical records with neurologists at WVU. By working together, the health care team can diagnose strokes more quickly and determine the best course of treatment.
WVU and Mon Health also teamed up on telemedicine services to expand neurology and stroke care for patients at Mon Health’s facilities.
Letnaunchyn said telemedicine will play a much larger role in health care. There are lobbying efforts to make the use of telemedicine more routine in the state.
“If a hospital can send medical information back and forth, it gets the patient taken care of sooner,” he said.”
An overhaul is needed
Joseph Shapiro, dean of the Joan C. Edwards School of Medicine at Marshall University in Huntington, said smaller, rural hospitals will continue to close. The problem is hospitals operate on tight margins — 2% — and no one wants to pay for health care, he said.
“As a society, we’re self-delusional,” Shapiro said. “We want health care available when it is needed.”
Hospitals are also facing competition from physician groups that now offer services such as MRIs and mammograms — once done exclusively in hospitals — in their offices. And in many cases, the service is cheaper than in would be in a hospital.
“Things like this are what is killing the smaller hospitals,” Shapiro said. “No one wants to pay a lot.”
Gov. Jim Justice formed the Rural Medical Task Force in response to layoffs at Fairmont Regional and its announced closure. Shapiro said he is hopeful the governor will be able to find a solution, but added 200-bed hospitals are likely to become a thing of the past.
“As a society, when you get sick you expect people to take care of you,” he said.
“It seems like we have reached a break point.”