The State of NC Healthcare

On Stanly Regional Medical Center and Scotland Memorial Hospital

Posted in Grassroots, NC Healthpress, Reform-in-progress by writemyline on 12 February 2009

John Lowder’s recent article In the Stanly News and Press (1 Feb. 2009) discusses Stanly Regional Medical Center’s (SRMC) management service agreement with Carolinas HealthCare System (CHS). It is a well-written statement with significant points of discussion that speaks directly to Stanly County citizens. It identifies the issues and circumstances leading to the SRMC Board of Directors’ decision to deepen the hospital’s relationship with CHS. Articles similar to Lowder’s Making change work for the community appeared about the same time in The Exchange and The Fayetteville Observer; however, these articles announce a management contract between CHS and Scotland Memorial Hospital in Laurinburg.

It is not surprising that CHS is the largest healthcare organization in the Carolinas. It is a very aggressive one in terms of acquisitions, mergers, leases, and management contracts. The Charlotte-based business has ties to 25 facilities from North Wilkesboro NC to Charleston SC; two additional hospitals in western NC are currently considering affiliate proposals. Russ Guerin, CHS executive vice president of business development and planning comments in the Charlotte Business Journal that Carolinas HealthCare management relationships, such as those with Stanly Regional and Scotland Memorial, can lead to mergers and leases.  

Integrating CHS’s large academic healthcare model into Stanly and Scotland’s smaller healthcare culture will be challenging. Technically speaking, the contract provides that the autonomy of the small hospitals remain; however, the management association with Carolinas HealthCare will be very visible in the public eye as well as the professional one. This could tax the confidence of some folks. Stanly and Scotland have histories that are entirely built on their local communities. Shifting their identity towards a corporate giant is unsettling; and, to some people, equates to a departure from certain long-held values of the community.

Indeed, management is a necessary component of any healthcare delivery system; but the public and professional perception of management weighs heavily on patients and their families. Perhaps the decision of Scotland and Stanly boards to deepen their relationships with Carolinas HealthCare System will prove financially fruitful and beneficial to the health of the community; but if and how much community citizens and local healthcare professionals will benefit financially is questionable, especially given the current chaotic state of the US economy. And the greater community, including physicians and healthcare professionals, could wait months, or perhaps even years, before the trickle-down effects of change deliver a substantial and beneficial outcome.

Smaller geographic areas, particularly rural ones and those with increased over-65 and disabled populations, are bound to the services closest to home. For some, there is no element of choice when it comes to health services; and when this is the case, public trust is absolutely critical. The role of organizational healthcare leadership in small boroughs and rural areas has a primary obligation to its service area population because there is no local competition providing other options.  Regardless of the business, service, or industry, public trust is critical for security and progress. And fostering and maintaining trust requires forthrightness, especially when it comes to healthcare issues.

In regards to SRMC, there are statements in need of clarification for the benefit of Stanly County citizens:

John Lowder writes: “Control over Stanly Regional will remain within the community. The Board of Directors will continue to govern the medical center and will retain ownership of all assets. The Board will make decisions in the best interests of the community and our same management team, led by Al Taylor, will run the medical center.”

Scott White, spokesperson for Carolinas HealthCare, says something different about the contract with SRMC in the Hickory Record: “We’ll hire the executive officers and manage the hospital on behalf of the board.”  (Hickory Record, 28 January 2009)

White’s and Lowder’s conflicting statements are very troublesome for the public. Merging the two statements suggests that CHS will hire the existing SRMC executive staff, including CEO Al Taylor. If that is, indeed, the case, then “control over Stanly Regional” will not actually remain in the community because its executive staff will not be appropriately vested by SRMC and its board of directors. Clarification and a more detailed disclosure of CHS’s management contract would be a positive step towards preserving public trust.

Another thing lacking is substantion of SRMC’s claim of a long-standing relationship with Carolinas HealthCare by physicians and healthcare professionals close to home. Public confidence is better built on relationships with the first line of care–primary care physicians, family doctors, specialists, and other healthcare providers, not management.  Moreover, how involved were Stanly physicians in the board’s decision? 

 Healthcare reform is an undeniable paradigm shift occurring at all levels of American society, from grassroots to corporate giants. It is a phenomenon that will ultimately redesign systems of healthcare delivery, finance, and management. It is a phenomenon in which organizations like Stanly Regional Medical Center and Scotland Memorial Hospital along with hundreds of other independent non-profit hospitals in the US will lead and represent the healthcare culture of small communities. On the other hand, Carolinas HealthCare System and other corporate giants will aggressively protect their own interests and profitability; small community-led healthcare will not be a top priority in reformation from their perspective.

 Indeed, change can be positive and work for small communities when citizens are directly involved in the process. Patients and families in Stanly and Scotland counties have that opportunity now by expecting their leaders to listen and respond with diligence and honesty.


Carolinas HealthCare System to “manage” Stanly and Scotland

Posted in Grassroots, NC Healthpress, Reform-in-progress by writemyline on 30 January 2009

The Charlotte Business Journal featured an article by Jennifer Thomas this week that announces a management service agreement (MSA) between Carolinas HealthCare (CHS) and two independent NC hospitals: Scotland Memorial Hospital (SMH) and Stanly Regional Medical Center (SRMC). The article, CHS to manage two more hospitals, appeared on January 28.

Thomas writes that CHS’s 10-yr. contract with Stanly begins March 1 and with Scotland on April 1. The article does not disclose the financial terms of the two contracts; however, the article suggests that the 10-yr. contract could mean a merger later on down the road. Russ Guerin, executive vice president of business development and planning at CHS,  is quoted: “managing independent local hospitals is a business line of (CHS).”  He also comments that such agreements have the potential for mergers.

Interestingly, CHS and Stanly’s recent request for a certificate of need for a 40-bed rehab facility was denied by N.C. Division of Health Service Regulation (NCDHSR) because the two organizations failed to demonstrate need and cost-effectiveness. The facility would have been built in Cabarrus County. CHS and Stanly are appealing the State’s decision. 

Both Stanly and Scotland serve local communities and are significant providers of care “close to home.”  People age 65 and over constitute 14.6% of Stanly County’s population. In addition, 20% of the county’s total population consists of disabled citizens over the age of 5. In Scotland County, 11.6% are 65 and up and 22% disabled.  Stanly’s older population exceeds the state/county average of 12.2%; and both, Stanly and Scotland, exceed the state/county average of 17% disabled. (Census Bureau)

“Close to home” care is a big concern for many of the folks affected by big hospitals swallowing up smaller ones. CHS is the 3rd largest public system in the country and the largest in NC. It owns, leases, or manages 25 hospitals from North Wilkesboro NC to Charleston SC, including SRMC and SMH.

See press releases on the Carolinas Medical Center website:

Stanly Regional Medical Center Partners With CHS

Scotland Regional Health Care System Partners with CHS

The CON in NC: “A Next Big Thing”

Posted in The CON in NC by writemyline on 24 September 2008

Doug Smith begins his article: “Health care development is emerging as a Next Big Thing in the Charlotte area as activity slows in residential, industrial and commercial real estate.” He goes on to discuss and describe the increasing demand for physicians’ offices, imaging centers, and specialty clinics in the Charlotte-Mecklenburg area of NC.

Reading Smith’s piece in the Charlotte Observer resuscitated some bitter aggravation for me–the aggravation over the Carolinas HealthCare System (CHS) and Stanly Regional Medical Center’s proposal to build a 40-bed inpatient rehabilitation hospital in Cabarrus County. The new facility is intended to serve residents of Cabarrus, Rowan, Stanly and Iredell counties and will be similar to the Mount Holly outpatient rehab center that opened last October. 

It’s a CON (Certificate of Need) discussion that hasn’t taken the centerstage like what’s happening between Novant and Baptist Hospital’s fight for Davie County; however, CHS-SRMC’s proposed rehab facility will certainly affect a significant number of rural citizens in Stanly-Montgomery-Anson communities.

Back in July of this year, CHS announced their proposal and submitted the necessary CON application with the NC Division of Health Service Regulation (DHSR). The plan included taking in Stanly Regional Medical Center’s (SRMC) 10-bed inpatient rehab program housed in its main campus in Albemarle, NC. With the contribution of SRMC’s 10 beds, CHS’s proposal fit the NC Department of Health and Human Services and DHSR’s proposed 2009 State Medical Facilities Plan by specifically not increasing the total number of beds in the service area. While the state’s proposed facilities plan does not call for additional inpatient rehab beds, under DHSR and CON guidelines the new rehab hospital would simply relocate and combine existing rehab beds.

Stanly Regional isn’t the only bed contributor to the project. Carolinas Rehabilitation on CMC’s main campus will hand over 10 beds and CMC-Mercy, 20 beds. 

So why is this a bitter pill to swallow? Just take a quick look at this illustration:

Stanly folks’ travel time and transportation costs will definitely increase. As for Anson and Montgomery county citizens to the east and south of Stanly, those increases will be even more. On the other hand, the booming population of northern Mecklenburg and Cabarrus counties will be on the receiving end of convenience and accessibility to quality community care.

In addition to increased travel, what about the local community healthcare culture in a county with a higher percentage of people over 65 and the availability of healthcare to rural citizens?

Stanly’s CON for inpatient rehab beds was granted in 1995. How, then, has that specific need changed? An FAQ on SRMC’s website explains that federal rules and admission criteria (Debt Reduction Act of 2005) have “significant reduced utilization of the 10-bed unit.” But the Center for Medicare Services announced changes to payment policies and rates for inpatient rehabilitation on July 31, 2008. These changes appear to offer relief for Stanly’s existing inpatient rehab unit, relief that would support maintaining the unit “close to home.”

What does CHS have to say about the proposal of a new 40-bed rehabilitation hospital? CEO Michael Tarwater states that the goal “ is to duplicate the tremendous success of Carolinas Rehabilitation-Mount Holly, a similar inpatient rehabilitation hospital that opened last year. Our partnership with Stanly Regional allows us to provide specialized rehabilitation services at a central location easily accessible to the residents of Rowan, Stanly and Cabarrus counties.”

Back to Smith’s article, The burgeoning business of medical offices; Demand for space grows as industry moves toward providing more outpatient services, one could ask, “Where’s the CON?”

See Doug Smith’s video,  NEXT BIG THING: Medical Parks, at the Charlotte Observer.