Belhaven mayor Adam O'Neal at the NCGA Sept. 2015. O'Neal has walked to Washington D.C. and to Raleigh from the eastern North Carolina town of Belhaven to publicize the problems faced by rural hospitals.
Belhaven mayor Adam O'Neal at the NCGA Sept. 2015. O'Neal has walked to Washington D.C. and to Raleigh from the eastern North Carolina town of Belhaven to publicize the problems faced by rural hospitals. Photo credit: Rose Hoban

Representatives from two recently closed rural hospitals came to Raleigh to ask for some help from the legislature.

By Rose Hoban

Two rural hospitals in crisis got some help from state legislators Wednesday, as amendments to assist them were added to a bill to encourage diabetes screening for children.

House Bill 20, now renamed the Rural Access to Care Act, makes tweaks to existing state law to help residents of Yadkin and of Beaufort counties, both of which have had hospitals close in the past year.

Easing contract paperwork

The first amendment to be added would benefit hospitals that are looking for a new manager or buyer, like the one in Yadkinville, which closed in May.

For now, the proposed language would affect only Yadkin Valley Community Hospital, which has been looking for a new operator. Three potential operators responded to the Yadkin County offer to operate the hospital, located in Yadkinville, but all withdrew their bids.

An ambulance is stationed in front of Yadkin Valley Community Hospital ready to address urgent needs.
An ambulance is stationed in front of the empty Yadkin Valley Community Hospital ready to address urgent needs. Photo credit: Taylor Sisk

“Currently, a municipality or hospital authority has a long, arduous process to go through when they’re trying to lease, sell or convey the hospital,” Sen. Joyce Krawiec (R-Kernersville) told the Rules and Operations of the Senate Committee. “This doesn’t change any of the initial process, the public notice, the waiting period, public meetings, due diligence.”

But what the amendment would do is allow a hospital to move from one bidder to the other more easily if the first bid falls through.

“The negotiations have to take place within the first 120 days after the public hearing is held,” said Rep. Lee Zachary (R-Yadkinville).

Yadkin Valley Community Hospital was operated by HMC/CAH Consolidated, Inc., which had indicated it wanted out of its lease agreement when the hospital continued losing money. Leaders at the closest hospital, Hugh Chatham, in Elkin, have been in on-again, off-again talks with county commissioners in Yadkin County about taking over the facility.

Currently, Yadkin Valley Community Hospital is licensed by the state to have 22 beds, but local leaders have said they really only need a few beds for stabilizing patients, an emergency room, clinics and diagnostic facilities.

County manager Lisa Hughes said the best hope for the hospital would be passage of a bill currently in Congress that would allow critical access hospitals such as theirs to be redesignated as “rural emergency hospitals.” The option would allow a facility to provide emergency services without maintaining inpatient beds, making it cheaper to run.

Yadkin county commissioners have invested tens of thousands of dollars in research to find out what needs to be done to get the hospital reopened, but to repeat all of the due diligence they’ve already made would be expensive and cumbersome.

Hence the tweak to current law.

“It’s getting harder and harder,” Krawiec said. “No body is clambering to buy those [hospitals] anymore. So we’re just trying to help them be able to sell, convey or lease those hospitals to the interested parties more easily.”

The amendment passed on a voice vote.

Tweaking the certificate of need

Another proposed amendment to House Bill 20 changes state law to allow for a hospital that was closed to retain its license and its state approval under the “certificate of need” regimen for up to 24 months after closure.

Dr. Charles Boyette (blue shirt) and Belhaven Mayor Adam O'Neal make their case for help to the Senate Rules committee Wednesday morning.
Charles Boyette (blue shirt) and Belhaven Mayor Adam O’Neal make their case for help to a Senate rules committee Wednesday morning. Photo credit: Rose Hoban

The CON process examines health facilities and hospitals around the state to determine whether there’s too much capacity in one area and not enough in others.

State officials who manage the CON process told leaders in the Beaufort County town of Belhaven that after Pungo District Hospital was closed last year they had lost their certificate and could not reopen.

Pungo had been in trouble for years; it lost a million dollars the year before it was acquired by Vidant Health in 2011. Vidant then closed the facility in July 2014. According to the State Medical Facilities Plan, Pungo had long been approved for 57 beds, but in 2013 state regulators felt the hospital only needed five beds.

“Health care has changed,” acknowledged Charles Boyette, a local doctor who has been involved in reviving Pungo District Hospital. “We have better ways of diagnosing in the outpatient setting, and therefore all that bed space would be wasted. So we would throttle it on down; 12 to 15 beds would be all that we’d ever need under the present circumstances.”

Unlike in Yadkin County, Beaufort and Hyde county commissioners have been cooler to the idea of providing Pungo with financial help and have not put in any funding. But Belhaven leaders say they have received grants and loan guarantees from the US Department of Agriculture’s rural health division and a private foundation. They’ve created a new board of directors and hired a Florida-based management company, Frontiers Hospitals, to run the facility.

All they need is permission to reopen, hence the trip to the legislature.

“This hospital had some problems,” said Sen. Bill Cook (R-Washington) as he introduced his amendment. “However, we’ve got a plan in Belhaven now to open this hospital again.”

One concern cited by Vidant officials is the proximity of Pungo Hospital to the water's edge and a possibility of flooding.
One concern cited by Vidant officials when the company decided to close Pungo Hospital was its proximity to the water’s edge and a possibility of flooding. Photo credit: Hyun Namkoong

When asked by Sen. Tommy Tucker (R-Waxhaw) why the hospital was needed when Vidant was in the process of building a multi-specialty clinic in Belhaven, Cook said the clinic would not be a hospital.

“If you need a blood transfusion or some emergency room-kind of treatment that will save your life, it’s not there,” Cook said. “It’s not a hospital.”

When Tucker pressed Cook and Belhaven Mayor Adam O’Neal on the hospital’s former financial problems, O’Neal said the plan was to “right-size” the hospital with fewer employees.

Boyette said the state should take the lead in assisting troubled rural hospitals.

“There’s many areas in North Carolina and the United States where we start to move to refurbish our small community rural hospitals to the point where they can provide health care to people in these areas of economic and health care deprivation,” Boyette told the committee. “Even in this part of North Carolina, we deserve to have the same type of care that we can get in urban North Carolina.”

This amendment also passed on a voice vote without opposition.

After the meeting, committee chair Sen. Tom Apodaca (R-Hendersonville) said he felt the plight of small hospitals was a conundrum without an easy answer.

“I know what that answer is going to be: We’re going to have to step in as the state and support them like we do our schools in those rural areas, smaller areas,” he said. “And I see that day coming quickly to keep them open.”

The bill is expected to be heard on the Senate floor Thursday morning, where passage looks likely.

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