Two aggressive hospital systems in North Carolina have hit some speed bumps in trying to push their already lofty market shares to even greater heights.
In denying their recent certificate-of-need applications for further expansion, the state's message to both Novant Health and Moses Cone Health System is clear-be prepared to justify your construction plans.
State regulators late last month rejected a proposal by Presbyterian Healthcare, part of Novant, to build a hospital in Huntersville, N.C., just north of Charlotte, N.C.
"They just could not demonstrate that there was a need for another hospital in that area," said Samuel Robinson, a project analyst with the state Department of Health and Human Services' Division of Facility Services.
Presbyterian had proposed building a 60-bed hospital for $37 million. Under the plan, the proposed hospital would not have added any beds to Presbyterian's system. In fact, the system would have experienced a net loss of licensed beds, because Presbyterian would have decreased the bed counts at all of its facilities other than Presbyterian Hospital Matthews (N.C.) (June 28, p. 24).
But Robinson countered that if Presbyterian is reducing its number of beds, in one instance proposing to move 15 beds and four operating rooms from Presbyterian Specialty Hospital in Charlotte to the new hospital, it didn't need those beds in the first place.
Furthermore, he said, 111-bed Lake Norman Regional Medical Center in Mooresville, N.C., which opened in June, is a mere 10 minutes from the proposed site of the new hospital and is less than half full. Health Management Associates, a Naples, Fla.-based hospital chain, owns for-profit Lake Norman.
Thomas Revels, president of Novant's Southern Piedmont region, said the system intends to appeal the decision, and he disagreed with Robinson's assessment.
"We don't think our hospital that we are proposing would serve many people from Mooresville," he said.
Eight-hospital Novant was formed July 1, 1997, through the merger of Winston-Salem, N.C.-based Carolina Medicorp and Charlotte-based Presbyterian Healthcare System.
The second system doing battle with state regulators, Moses Cone Health, has already filed its appeal after the state in mid-September rejected its CON application to spend $17 million to expand the Women's Hospital of Greensboro, N.C., one of Moses Cone's three hospitals.
Moses Cone operates all the acute-care hospitals and a total of 1,112 beds in Greensboro. Its hospitals, Moses H. Cone Memorial Hospital, Wesley Long Community Hospital and the women's hospital, all operate under one hospital license.
"They didn't adequately demonstrate the need to build new space when they have substantial underutilized space at the Wesley Long campus," said Martha Frisone, project analyst at the state's Division of Facility Services, Department of Health and Human Services. "Their biggest problem is demonstrating that it's not less costly or more effective to renovate the existing space at Wesley Long."
In fact, if all of the Women's Hospital patients were admitted to Wesley Long, Wesley Long would still have unoccupied beds, she said.
That view, however, is overly simplistic and ignores cost, said Jim Roskelly, vice president of planning and development at Moses Cone Health.
Using space at Wesley Long would cost $4 million more than renovating and expanding the women's hospital, Roskelly said. In addition, the design of the Wesley Long facility would require that obstetrics services span seven floors, instead of enabling consolidation in one area as planners hoped to do at the women's hospital.