iTeam Investigates: What's in store for the future of West Virginia health care?

CHARLESTON, W.Va. (WCHS/WVAH) — A little more than one week ago, one of the state's biggest health care providers, Thomas Health System, announced it was filing for Chapter 11 bankruptcy seeking protection from its long-term debt.

The company runs Thomas Memorial Hospital in South Charleston and St. Francis Hospital in Charleston. It's just the latest in a long line of health care providers dealing with rising costs and shrinking budgets.

“The Chapter 11 restructuring process that we're in doesn't affect the employees or any of their benefits. We're open for business,” Dan Lauffer, president and chief executive officer of Thomas Health, said. “All of our services remain the same as we've always offered.”

In October, Mingo Health Partners announced Williamson Memorial Hospital would be placed in Chapter 11 bankruptcy. The facility laid off 35 employees when it made that announcement. Another 20 were furloughed last week.

Since 2000, West Virginia hast lost nearly a dozen community hospitals. Man, Richwood, Guyan Valley and many other areas have felt the sting of closures, takeovers and mergers.

“Back in 2008, you could look and see what our percentage of commercial payers were as part of our book of business,” Lauffer said. “It was as much as 28 to 30%. Over the years, here we are in 2020 we're looking at 16 to 18% of our book of business is commercial insurance. That is a huge difference in terms of revenues that we were obviously able to count on as part of our operation that now has evaporated because of the economic issues in West Virginia.”

One of the biggest problems facing health care providers is the sheer number of people statewide who are on public insurance plans. Data provided by the West Virginia Department of Health and Human Resources show that about 500,000 state residents have Medicaid as their insurance. Another 400,000 are on the Medicare rolls, while 200,000 are covered by the Public Employees Insurance Agency.

All of those plans reimburse health care providers only 32 cents for every dollar of care.

"When those payers are the bulk of your payment and those payments don't cover cost, which hospitals will tell you do not cover cost, it becomes a real problem,” Secretary Bill Crouch with the West Virginia Department of Health and Human Resources said.

The U.S. Census Bureau estimates that West Virginia's population is only 1,792,000 people.

With 1.1 million covered by public policies, there are not enough private insurance patients left for hospitals to shift costs to. That’s not a recipe for long-term survival.

“I would like to see that PEIA and Medicaid would pay their fair share,” Sen. Ron Stollings, D-Boone, said. “That eats into taxes and again we have a little surplus now. In my years of being here since 2006, anytime we were thinking we were doing pretty well with the budget, all we would have to look to is Medicaid and be like, 'Oh my goodness, we've got to pump more money into Medicaid.' And of course, if you do that you get a three-to-one match.”

Stollings is a long-time state senator who is running for the Democratic gubernatorial nomination. He is advocating some of the state's $300 million Medicaid surplus be used to increase the reimbursement rates to hospitals, but the Justice administration has other plans for that money.

“That would be a possibility in terms of changing the state health plan and changing reimbursement,” Crouch said. “The priorities for us right now, and the governor spelled those out clearly, are the IDD population and our child welfare system, which are two areas that we've got to focus on. That, along with the drug epidemic.”

With a declining population that seniorliving.org listed with the third-highest percentage of residents 65-and-older at 20%, along with an energy-dependent, cyclical economy, the future is not rosy for a robust health care system operating in all parts of the Mountain State.

“It's a difficult question to answer,” Crouch said. “I think at some point we need to focus on how many hospitals we have and what those payments are and how they're structured. Some of those services provided I've already looked at and am looking at in terms of can we get a less costly way to provide services?”

There are steps which can be taken to improve the situation, but it's going to take diversifying the economy and conscious decisions to focus on individual health.

“We certainly have to be talking to our patient population as part of our effort related to population health management, to get people to think and value health care as something that they need to do each and every month, quarter or year,” Lauffer said. “Health care cannot be something that we think about doing only when we need it when it's an emergency. Because by the time we reach the emergency room for the problems that we're dealing with, there have been issues that have been there for quite a long time.”

So, can we survive where we are?

“Not long term, something's got to be done,” Stollings said. “I just hope that the people that are making the decisions frankly, have the patient's access to care in mind. Because if you're just looking at pennies, dollars, things like that, without really looking at the health of a population, patients are going to suffer.

West Virginia's Northern Panhandle was rocked late last summer when Ohio Valley Medical Center in Wheeling and East Ohio Regional Hospital in Martin's Ferry both closed.

The facilities were owned by Alecto Healthcare Services of California, which said it had lost $37 million over the past two years.

Nearly 1,100 employees were affected, with the area losing acute care beds, emergency medical services and mental health facilities.