NC Regulators – A new assertive stance for rural areas when considering hospital moves.

It’s increasingly an issue as the division between the two North Carolinas becomes even deeper.  Hospitals in poorer, rural areas seek to move to the richer and faster-growing I-40/I-85 central corridor.  We’ve got more information posted on our new hospital conversion/movement web page here at the Justice Center.  A recent News and Observer article with plenty of charts did an excellent job of graphically illustrating this issue in one particular proposed move.

When a hospital wants to move, it needs approval from state regulators who look at a variety of criteria, including what the effect would be on the people who the hospital currently serves.  Under North Carolina law on hospital moves, special emphasis is given to the effect of any move on people who are elderly, on Medicare or Medicaid, or are lower income.  It only makes sense – without some regulatory oversight, there would be few or no hospitals in the rural and poorer areas of North Carolina.  It’s just much more lucrative to have a hospital in a place where a greater proportion of the population has private health insurance and is generally wealthier.

Several years ago in Harnett County, a private for-profit hospital chain attempted such a move but lost out to a nonprofit proposal to create a new county health system that would create more access across the entire county and not just the part nearest Raleigh.  At issue in the dispute was the effect of the different proposals on elderly and lower income people in the county, although in the end that issue played a fairly minor role.

Then last year the dispute over similar move in Franklin County heated up.  There, the hospital’s attempt to move was denied largely because of the effects on the lower-income and much more rural part of the county the hospital wished to leave.

 A similar issue has arisen in Davie County now in the central part of the state.  Again, NC regulators denied the proposed move:

Even if the population of the eastern census tracts increased at a faster rate than the population of the western and central census tracts, a substantial percentage of the population of Davie County would still be negatively impacted by the proposed relocation.

“Further, the residents of Davie County who will be negatively impacted by the relocation include relatively higher populations of medically underserved groups, including lower-income persons, the elderly and racial minorities," Frisone wrote.

When HAC did legal research and filed legal briefs several years ago regarding the Harnett dispute, we could find little or no evidence that the portion of NC state law regarding hospital move effects on medically underserved people was a major issue.  Now it appears to be a determinative issue for an increasing number of cases.

The new assertiveness on the part of NC regulators is welcome.  Business and market share disputes, operating room numbers, and the number and type of specialty care units are often the major issues in certificate of need controversies.  At bottom however, proposed moves of hospitals affect real people.  It’s a good thing that healthcare for people with the smallest amount of resources is an increasingly important factor in the big business of hospital relocation.