By and large, the Sunday News front page article “Billion-dollar baby” about  Lancaster General Health was very gratifying.  It included much of the same information that NewsLanc has been reporting over the past couple of years.  It also included attempts by LGH’s executives to put the best spin they could on information that suggests that LGH is more interested in rewarding its executives and personnel and  irrational growth than fulfilling its responsibilities  as a Public Charity to the community.

We encourage that careful reading of Gil Smart’s report.   Until LGH makes public its past due 2008 / 2009 federal return, we will not be able to make a definitive evaluation of LGH’s representations.  However, there are a few that  minimally require further explanation  and likely condemnation:

“Just two years ago, Lancaster General Hospital recorded record profits of $138 million. Last year’s profit of $78.8 million represented a 42 percent fall from that summit.” Maybe yes, maybe no.   According to a recent Intelligencer Journal New Era article, LGH added  over ten million to its employee pension fund to make up for losses due to the stock market plunge.   If those tens of million (the exact amount was not specified) are added to the $78 million in profit, LGH may have only suffered only a 10% rather than a 30% drop from the 2007 /2008 fiscal year’s  earnings.   This while most ‘for profit’ firms were struggling to even remain profitable!

“’We have taken a disproportionate amount of responsibility for the medically underserved in this community,” said LGH Executive Vice President Jan Bergen. Medical assistance patients account for 15 percent of patient days, but just 4 percent of revenues. ‘We get paid substantially less than cost,’ said Bergen” .  This is disingenuous.   All hospitals absorb some of the costs of Medicaid, but LGH’share is among the lowest as a percentage of gross revenue  throughout the state.  The paucity of such aid contributes to LGH’s extraordinary profit margin, more than double the state wide average.  Furthermore, those expenses are before, not after, the $78 million in profits.

“The system employs 3,906 full-time workers and 3,215 part-time workers, said hospital spokesman John Lines. And one reason Lancaster General Hospital’s profit fell last year is that expenditures on salaries, other compensation and employee benefits soared 23 percent, to $385 million.” Wow!  No wonder profits were down when this so called Public Charity is providing a 23% increase in a single year  in “expenditures on salaries, other compensation and employee benefits….” Talk about excesses on Wall Street!

And for sheer silliness, the article ends with a quote from Beeman as follows: “”It’s as if [hospitals] are at the head of the Colorado River,” Beeman said. “We’re all in rafts, some of us have oars and some of us don’t.  Some of us just aren’t going to make it.” With his $1.3 annual compensation, he sure is!

NewsLanc is not critical of the levels of compensation of executives at Lancaster General Health (LGH).  The hospital operates in what seems to be an exemplary manner and is a source of much pride to our community.  The executives appear to be doing their jobs well and are entitled to compensation comparable to executives in similar positions elsewhere.  That being said:

Much of LGH’s profitability is due to LGH’s market dominance and resulting ability to obtain higher payments directly from insurance companies and indirectly from the insured—the Lancaster County public.  NewsLanc’s issue is the failure of this ‘Public Charity’, one of the most profitable hospitals in the state, to spare more than a measly 1% of its “excess” (profits) with the community .

In stark contrasts to non-profit LGH’s “grants” of only a meager one million out of profits of $113 million,  for fiscal year July 2007 through June 2008, President/CEO Tom Beeman alone earned $1,280,262. In other words, Beeman received $96,798 more than the total grant program!

Executive Vice President /Chief Operating Officer Marion McGowan was paid $793,629.  Executive Vice President Jan Bergen received $614,320. Both are paid more than half the amount of the grant program.  Many other executives receive earnings ranging from the low to mid- six figures.

One cannot tell from LGH’s Income Tax Filing to what use LGH is putting its windfall profits.   What is clear is that some of this money would be better spent funding a syringe exchange and providing a daily clinic for the treatment of over 5,000 heroin addicts, thus helping them to return to productive citizens and curtailing the rate of the spread of various social diseases , especially HIV/AIDS , through sexual contact.

Furthermore, $20 million instead of one million should be allocated for community betterment in education, to shelter the families of homeless children, provide dental treatment for the poor, and other social safety-net services.   Over $80 million would still be available for facility enlargement, modernization, and expansion.

Medical professionals are bright people and they clearly know more about treating sickness than the rest of us.  However, that does not make them omniscient stewards of how the public’s wealth should be spent.  Instead of hiding behind an iron curtain of propaganda and silence, it is time for LGH to seek transparency in its dealings and to candidly communicate with and, above all, engage in a dialogue with the public.

A veil of secrecy surrounds the dealings of Lancaster General Health. However, NewsLanc was able to access LGH’s 2007 well-concealed tax return, which included a list of all of its ‘charitable’ donations.

According to a NewsLanc article regarding LGH’s vast “Excess” (profits) in 2007 ($113,326,709), one of the highest in the state, only one percent ($1,183,464) went to charitable donations, one of the lowest rates in the state.

The stated mission of LGH, a ‘Public Charity’, is “To advance the health and well-being of the communities we serve…”

There were approximately 155 separate donations, which included some strange items.

Most notable is that $117,000, 10% of the total, went to the private Franklin & Marshall College.  John Fry, F&M’s president, is a member of LGH’s board.

The Congressional Black Caucus received $13,500. Why would a political contribution be treated as charity?

There is a thousand dollars for the private Lancaster Country Day School, but only $560 to the McCaskey Alumni Association and nothing else for the School District of Lancaster. (There is also $250 for the Penn Manor High School post prom.)

The Lancaster Alliance receives $23,583. (Its prime effort over the past couple of years is to bring back a streetcar system to downtown.)

There was $6,564 for Willow Valley Resort.

Particularly notable for its absence is the lack of any contribution to public libraries, especially the downtown Lancaster Public Library.

Recently LGH has refused to provide funding to continue a syringe exchange in Lancaster, despite syringe sale recently being deregulated. Also, it only provides a clinic for the treatment of heroin addiction one afternoon a week, treating a only handful out of Lancaster’s 5,000 to 10,000 addicts—at least a thousand of which seek help. Both are core public health functions.

NewsLanc is eager for LGH to meet its legal obligation to post its 2008 tax return. In fact, we have requested a copy from LGH, but, as has so often been the case of the local media, have received no response. LGH is only interested in ‘puff pieces’, not journalism.

On page 1 of it’s 2007 Form 990, Return of Organization Exempt from Income Taxes, Lancaster General Hospital reported Excess for the year” as $113,326,709.  This was the excess of “Total Revenues” over “Total Expenses.”

LGH reported on page 2 of the same Form 990 that 2007 “Expenses” included a total of $1,183,464 in “Grants paid from donor advised funds.” This represents a mere one percent of its “excess” or, for a regular corporation, what would be called ‘profits’.

In an exchange of letters in March, NewsLanc publisher wrote LGH president Tom Beeman:  “LGH, a non-profit ‘public charity’ is one of the least charitable hospitals in the state. We know not what it is doing with its vast earnings, but we do know they are not being directed adequately towards local public health and education.”

Beeman’s response was “This statement is categorically false. Our contributions to our community in charity care, free healthcare services, financial assistance and cash donations to government and school districts exceed other hospitals in our region.”

Note Beeman switches the subject from grants to “local public health and education” to include extraneous items, and from a comparison with hospitals throughout the state to a comparison with regional institutions, some of which are struggling to survive due to LGH’s market dominance.

LGH’s paltry contribution of one percent confirms state statistics indicating that LGH is one of the lowest contributors to charitable causes. So who is being “categorically false?”

NewsLanc brought the above information to to the attention of John Lines, Director of Communications for LGH, over a week ago and asked for a comment.   Neither Lines nor Beeman have responded.

Although there are some very community minded organizations out there, it is sad to note the practice over recent years of CEO’s of several of Lancaster’s largest, most prideful institutions of being disingenuous in their actions and statements.

LGH is a “Public Charity.”   Much of it profits is due to market dominance, which means the insurance companies have to pay them more and the Lancaster public pays more for insurance.  LGH’s profits belong to the public.  Other vital public institutions for the purpose of public health and education deserve more than the barest crumbs from LGH’s table.

March 24, 2010

To: Thomas E. Beeman, President, Lancaster General Health

From: Robert E. Field, Publisher, NewsLanc

Dear Tom:

Below please find excerpts from your letter to me of March 16^th along with our related questions and comments.

NewsLanc awaits response to the following requests:

“Kindly provide us with a list of the county-wide organizations to which LGH has  provided financial support to during 2007,  2008 and 2009, including the amounts LGH has donated. (Just listing names without the amounts serves little if any purpose, since an important issue has to do with how much LGH contributes compared to how much LGH earns.) If you do not have information from all of these years readily available, please send us what you have. If possible, follow up with the balance.”

“We are seeking LGH’s balance sheet and statement of cash flow for the past three reported years.”

Cordially,

Robert

1) “You wrote: Because LGH can charge more to insurance companies, insurers in turn charge more to Lancastrian for coverage. So LGH’s huge profits are coming from our pockets. 

We can’t answer for what insurers charge their customers. What we can say however is our charges are comparable to other Lancaster County hospitals, and in many cases are lower than our two for-profit hospitals…. According to the Pennsylvania Health Care Cost Containment Council’s Hospital Performance Report 2008, Lancaster General Hospital’s charges were lower than Lancaster Regional Medical Center in 18 out of 27 procedures.”

NEWSLANC: The state report to which you refer lists the average prices which hospitals place on their services for treating a few dozen more or less typical procedures. Are you aware that the report cautions that the figures are not necessarily what patients actually pay?

Isn’t what patients actually pay determined by their insurance coverage, which is worked out between the healthcare provider—in this case LGH—and the insurance companies? While LGH is indeed not responsible for what the insurance companies charge, LGH does work with the insurance companies in determining that bottom line figure?

Doesn’t LGH’s relative market dominance enable it to negotiate higher rates for reimbursements than would otherwise be the case?

Unlike in cities where there are two or more hospitals of relatively equal size from which to choose, would insurance companies or individuals be likely to purchase insurance protection that did not provide coverage at LGH?

Don’t the insurance companies in turn pass on their expenses in pricing their policies?

2) Furthermore, we have no desire to “crowd out” Ephrata Community Hospital. Lancaster General Health and Ephrata Community Hospital continue to look for ways to partner in ensuring healthcare services are available in one of the fastest growing regions of our community.

NEWSLANC: Kindly provide us with evidence that the management or board of trustees of Ephrata Community Hospital has expressed an interest in being a “partner” of LGH in the location that LGH seeks to develop within three miles of the Ephrata hospital.

Our article of September 16, 2009 headed “Ephrata Hospital already has plans to handle population growth” reports “According to Ephrata Community Hospital (ECH) spokeswoman Joanne Eshelman, ‘We regularly evaluate our facility needs and have a plan in place to further develop our main hospital campus to meet the needs of this community’.”

3) You wrote: LGH, a non-profit ‘public charity’ is one of the least charitable hospitals in the state!   We know not what it is doing with its vast earnings, but we do know they are not being directed adequately towards local public health and education.

This statement is categorically false. Our contributions to our community in charity care, free healthcare services, financial assistance and cash donations to government and school districts exceed other hospitals in our region

NEWSLANC: By “region” are you referring to “Region 5” which encompasses York, Lebanon and Lancaster Counties?

Are you denying: LGH has a much lower ratio of charity care within its uncompensated care total than the state average ($50 million unreimbursed plus $7 million charity = $57 million, of which charity was 12%); LGH’s percentage of its total revenue that went to uncompensated care is one of the lowest in the state and second lowest in this region (1.55% of revenue in FY2008, only barely above Heart of Lancaster at 1.52%); State statistics show LGH’s level of charity about half of the average of hospitals statewide;  LGH has one of the highest positive operating margins and highest total margins of any hospital organization in the state of PA, in addition to some of the highest net patient revenue figures?

4) Everything Lancaster General Health earns is reinvested back into our system, unlike for-profit hospital chains that pay dividends to investors, or use profits to acquire hospitals in far-away states. Our dollars are reinvested locally into our facilities, people and in new technology to ensure high-quality healthcare is available now and in the future. For example, hospitals of our size and scope require approximately $50 million annually to replace capital equipment throughout our health system, and federal mandates to establish an electronic medical record at LG Health will require us to spend more than $130 million over the next three years.

NEWSLANC: We note that your argument for non-profit hospitals is similar to the case “liberals” make  for covering the entire population under single payer health insurance, such as an expanded MediCare.

Isn’t the $50 million expended for capital improvements annually amortized over the years, and thus roughly represented as an equal amount of “expenses” on your operating statement each year? NewsLanc has not raised a question of the efficiency of LGH operations. Rather NewsLanc questions why LGH does not spend more of its $110 million in “surplus” or “profits” for public health and educational purposes. We await your response to our core concern.

5) Certainly, if we did not place a priority in getting the uninsured enrolled in Medicaid, our charity care number would be much higher.  Enrolling patients in Medicaid is to the patient’s advantage, as it assures them access to medications, physician visits, and other critical services they may require outside of hospital settings.

NEWSLANC: Are you suggesting the other hospitals throughout the state are not seeking compensation for those who qualify for Medicaid but are not enrolled?

6) A great way to start learning would be to download our many Community Benefit Reports at http://bit.ly/cKKcJw

NEWSLANC: The URL site does not provide dollar amounts of aid to local organizations or the hospital’s own public health efforts. We requested that information last weekend and have not yet received a response. 

7) We use national, state and local health data, such as mortality and morbidity data, risk factor surveys, Healthy People 2020 goals, and many others, to objectively identify our community’s actual health priorities. Those priorities are: Increasing healthy weight management , Reducing tobacco use , Improving access to primary care for the growing number of medically underserved throughout Lancaster County.

NEWSLANC: Rick Kastner, Executive Director of the Lancaster County Drug and Alcohol Commission, estimates there are 5,000 to 10,000 heroin addicts in the county.

How do you justify LGH’s stated refusal to donate money to maintain a syringe exchange, even now that the sale of syringes has recently been deregulated? Doesn’t prevention of the spread of HIV/AIDS and other diseases reduce the need for LGH services, especially since the type of treatment that you represent is under compensated through Medicaid? Don’t syringe exchanges refer patients for treatment, thus helping to reduce the number of addicts and restore them as productive citizens and caring family members?

How do you justify LGH maintaining a clinic for medical treatment of heroin addicts only one afternoon a week with only one physician present?

Would not those treated qualify for Medicare or Medicaid?   

8 ) You wrote: There is total lack of transparency, with media and public being banned from all LGH trustee and committee meetings except for the annual public meeting, and the one goes unnoted and unreported by the Lancaster press. (It was last November, but not a word was printed about it before or after.)

This is also untrue. Our financial performance, clinical outcomes, charges, and infection rates are publicly reported on a regular basis by several independent agencies and via our website. We publicly issue two Community Benefit Reports and send monthly Community Benefit Updates via email to more than 9,000 people to communicate our efforts in improving the health and well-being of Lancaster County. Furthermore, we are regularly featured by the local print and electronic media, which write both positive and negative stories. As for the LGH Trustee meeting, it was advertised in Lancaster Newspapers and members of the public attended.

Aren’t many of these reports required by law?

More importantly, what relevance does information released by LGH have to do with a public dialog engendered by open board and committee meetings? How can LGH be critiqued if it only holds one meeting a year (out of hundreds) open to the media and general public?

Are you suggesting that “monthly Community Benefit Updates”, which some would refer to as public relations propaganda, are adequate to take the place of public discourse?

9) You wrote: Finally, management at LGH is totally self perpetuating, with current trustees choosing future ones. There is no public input.

Management isn’t governance. At LG Health, management serves at the pleasure of our community-based Board of Trustees. Our Board of Trustees is “the public.” The board is comprised of volunteer civic and business leaders from our community. They help guide the creation of our health system’s vision and strategy, which is carried out by our leadership team and our more than 7,400 employees.

The Board of Trustees gains perspective and additional public input through several ad hoc committees, which include dozens of community members from throughout the county. As is the case with other public charities, our Board of Trustees regularly selects members of the community to serve on the board.

Are not members of the Board of Trustees and “ad hoc committees” selected by LGH rather than appointed by government officials, local social service organizations, or elected by the public? How is this not “self perpetuating?”

3/16/2010 (Editor’s note: Please see “NewsLanc’s response.“)

Robert,

I am troubled by Sunday’s post on your website noting that, with John Fry’s eventual departure for Drexel University, you now have “only one more target in mind: Lancaster General Health.” … I’d like to correct the errors found in Sunday’s post:

You wrote: Because LGH can charge more to insurance companies, insurers in turn charge more to Lancastrians for coverage. So LGH’s huge profits are coming from our pockets.

We can’t answer for what insurers charge their customers. What we can say however is our charges are comparable to other Lancaster County hospitals, and in many cases are lower than our two for-profit hospitals. According to the Pennsylvania Health Care Cost Containment Council’s Hospital Performance Report 2008, Lancaster General Hospital’s charges were lower than Lancaster Regional Medical Center in 18 out of 27 procedures. Unlike our county’s two for-profit hospitals with shareholders living across the country, members of our Board of Trustees live and own businesses in Lancaster County. They constantly challenge us to provide safe and effective healthcare at a competitive cost – to anyone, regardless of their ability to pay – because their companies and families feel the impact.

You wrote: Its second highest profits in the state are mainly the result of market dominance, something they are trying to perfect by crowding out its remaining viable competitor, Ephrata General Hospital.

Everything Lancaster General Health earns is reinvested back into our system, unlike for-profit hospital chains that pay dividends to investors, or use profits to acquire hospitals in far-away states. Our dollars are reinvested locally into our facilities, people and in new technology to ensure high-quality healthcare is available now and in the future. For example, hospitals of our size and scope require approximately $50 million annually to replace capital equipment throughout our health system, and federal mandates to establish an electronic medical record at LG Health will require us to spend more than $130 million over the next three years.

Furthermore, we have no desire to “crowd out” Ephrata Community Hospital. Lancaster General Health and Ephrata Community Hospital continue to look for ways to partner in ensuring healthcare services are available in one of the fastest growing regions of our community.

You wrote: LGH, a non-profit ‘public charity’ is one of the least charitable hospitals in the state! We know not what it is doing with its vast earnings, but we do know they are not being directed adequately towards local public health and education.

This statement is categorically false. Our contributions to our community in charity care, free healthcare services, financial assistance and cash donations to government and school districts exceed other hospitals in our region. In fact earlier this year, Lancaster General Hospital was named a finalist of the prestigious Foster G. McGaw Prize for Excellence in Community Service, one of the most esteemed community service honors in healthcare, recognizing healthcare organizations like ours that are role models for improving the health and well-being of their communities.

It’s important to note that there is a difference between “charity care” and “uncompensated care.” Last fiscal year, we provided more than $7 million in charity care for patients with little or no health insurance.  In addition, we spent nearly $50 million to cover the unpaid cost of services and state programs provided to financially disadvantaged patients (uncompensated care). This amount is based on the cost to provide care, not our charges.

We actively encourage and assist uninsured patients in enrolling in our state’s Medicaid program, which unfortunately only pays a small fraction of our costs to provide them care. When a patient is enrolled in Medicaid, the difference between cost and payment is no longer considered “charity care.” Certainly, if we did not place a priority in getting the uninsured enrolled in Medicaid, our charity care number would be much higher.  Enrolling patients in Medicaid is to the patient’s advantage, as it assures them access to medications, physician visits, and other critical services they may require outside of hospital settings.

There is not enough room here to detail the substantial financial and professional resources we annually dedicate with dozens of area partners toward addressing our community’s true health priorities. A great way to start learning would be to download our many Community Benefit Reports at http://bit.ly/cKKcJw

We use national, state and local health data, such as mortality and morbidity data, risk factor surveys, Healthy People 2020 goals, and many others, to objectively identify our community’s actual health priorities. Those priorities are:

• Increasing healthy weight management
• Reducing tobacco use
• Improving access to primary care for the growing number of medically underserved throughout Lancaster County

Under the guidance of our Mission & Community Benefit Committee of the Lancaster General Board of Trustees, we create and maintain programs, foster partnerships and align services to address those priorities. We constantly measure our progress. The Committee, which includes volunteer members of our community, assists our Trustees in fulfilling its oversight responsibility related to our mission and efforts at improving community health.

You wrote: There is total lack of transparency, with media and public being banned from all LGH trustee and committee meetings except for the annual public meeting, and the one goes unnoted and unreported by the Lancaster press. (It was last November, but not a word was printed about it before or after.)

This is also untrue. Our financial performance, clinical outcomes, charges, and infection rates are publicly reported on a regular basis by several independent agencies and via our website. We publicly issue two Community Benefit Reports and send monthly Community Benefit Updates via email to more than 9,000 people to communicate our efforts in improving the health and well-being of Lancaster County. Furthermore, we are regularly featured by the local print and electronic media, which write both positive and negative stories. As for the LGH Trustee meeting, it was advertised in Lancaster Newspapers and members of the public attended.

You wrote: Finally, management at LGH is totally self perpetuating, with current trustees choosing future ones. There is no public input.

Management isn’t governance. At LG Health, management serves at the pleasure of our community-based Board of Trustees. Our Board of Trustees is “the public.” The board is comprised of volunteer civic and business leaders from our community. They help guide the creation of our health system’s vision and strategy, which is carried out by our leadership team and our more than 7,400 employees.

The Board of Trustees gains perspective and additional public input through several ad hoc committees, which include dozens of community members from throughout the county. As is the case with other public charities, our Board of Trustees regularly selects members of the community to serve on the board.

Thomas E. Beeman, PhD, FACHE

President and Chief Executive Officer

Lancaster General Health

Background: The executive director of the Drug & Alcohol Commission, Rick Kirchner, has estimated the heroin addict population in Lancaster County to be between 5,000 and 10,000. Lancaster General Hospital reported earnings of over $113 million in 2008, one of the highest for any hospital in the state. LGH’s stated mission is “to advance the health and well-being of the communities we serve…”

The sharing of used needles is the largest cause of the spread of HIV/AIDS spread through the heroin addict population and from them to the general population. Having helped bring about the deregulation of the sale of syringes and thus removing any stigma from syringe distribution, the funder for the decade old Lancaster syringe exchange, NewsLanc’s publisher Robert Field, is redirecting his support to other charitable efforts.

The following is an e-mail exchange between Field and John P. Lines, Director, Public Relations & Corporate Communications, of Lancaster General Health:

QUESTION: I have heard a rumor that LGH was offering to provide some funding [for the proposed Urban League syringe exchange] subject to conditions. Is this correct and what can you tell me about LGH’s offer and conditions?

REPLY: LG Health is not providing funding, nor offering to provide funding, for the Urban League’s syringe exchange program. We provided Mr. Dixon an explanation for our decision.

QUESTION: Has LGH offered to fund Bethel AME’s current syringe exchange? If so, how much a month?

REPLY: LG Health has not offered to fund Bethel AME’s syringe exchange program.

QUESTION:  Also, LGH had initiated a program for the treatment of heroin addicts. Is it ongoing? How many hours a week is the clinic open? Is there more than one doctor at a time? How many patients are they treating each week? How many new, how many repeat?

REPLY: Lancaster General Health’s Suboxone Clinic opened July 8, 2009. Patients are seen by one physician every Wednesday from 1:30 to 4:30 p.m. Three physicians participate in the program. We schedule up to 12 patients per week. In 2009, we held 17 clinics and conducted 83 visits with a no-show rate of 8%. The same volume continues today.

All referrals go through RASE and patients are required to either attend Alcoholics Anonymous/Narcotics Anonymous meetings or counseling. About half of the patients are new to the program.

On Thursday, February 18, NewsLanc spoke with Lancaster General Health spokesman John Lines regarding the current status of the proposed facility expansion in West Earl township. Having obtained township zoning approval last fall, the health care provider is currently examining potential traffic impacts and is in talks with the township regarding provision of utilities to the site, Lines said.

According to Lines, LGH has not yet submitted drawings or development plans to the township. This will happen “within the year,” Lines noted, though not specifying any projected groundbreaking date.

The planned facility would be located within three miles of Ephrata Community Hospital, which serves the surrounding population within the its present capacity. A September 2009 article from the Intell New Era reported that the new facility could contain up to 600,000 square feet of space—roughly equivalent to the LGH health campus.

Lines stressed to NewsLanc that any reported previously figures are mere speculation. “It would be premature,” Lines said, to specify the project’s size, design, or cost at the present time. All of these matters will be discussed later this year, when LGH presents its development plans to the township.

At that time, Lines said, the plans will be discussed in a public forum, where township officials and residents can present their thoughts and concerns regarding the project’s traffic and environmental impacts.

“We’re planning for something that will be developed over decades,” Lines asserted, “That’s not something that we’re going to rush.”

By Cliff Lewis

At the Lancaster County Hospital Authority’s January 21 meeting, Chairman Dr. Randolph Trostle told NewsLanc that, in the course of issuing tax-exempt debt for health facility projects, the Authority does not assess the public health need for applicant projects. “I think that would be a question that [the commissioners] would have to deal with,” Trostle said. According to the commissioners, however, the assessment of public need would not be under their jurisdiction either.

With no certificate of need process active in the State of Pennsylvania, the approval of tax-exempt financing could be the County’s sole means of leverage against unnecessary hospital expansions.

“It’s very possible,” Commissioner Scott Martin said, “That if the three of us…say ‘No we’re not going to do this, we don’t think it’s needed,’ it could potentially end in some litigation, because that wasn’t in our scope or role as decision-makers.”

County solicitor Don Lefever elaborated that “as an official in the county where a project is proposed, we’re really just approving financing as put together by the Hospital Authority, [which is under] statutory requirement to come before the County for approval. But we don’t get into a question of the need for the project.”

Commissioner Craig Lehman questioned whether the assessment of need would be even be within the Authority’s jurisdiction: “As far as the Hospital Authority is concerned,” Lehman asserted, “My understanding is that it’s simply a financial authority that is the conduit for tax-exempt financing and nothing more.”

The Hospital Authority serves as a conduit for tax-exempt financing for eligible hospital and retirement home projects in Lancaster County. Requests are passed through the Authority for approval by the county commissioners. Before being brought to the commissioners, however, each project is presented in a publicly-advertised hearing.

Comments from Commissioner Dennis Stuckey implicitly questioned the value of any government-level assessment of need: “I fully expect the hospital and the healthcare providers to determine what’s best for Lancaster County—that’s their expertise, that’s the business they’re in,” Stuckey asserted, “We rely on the professionals to determine what’s in the best interest of healthcare in Lancaster County.”

The assessment of public health need is of particular interest in light of Lancaster General’s plan for a West Earl expansion less than three miles from Ephrata Community Hospital—which currently meets the surrounding demand well within its capacity. The Hospital Authority has not yet received any formal requests regarding this plan, although it was reported at the last Authority meeting that LGH has one undisclosed project which may come to the table this year.

At the Tuesday, November 10 County Commissioners meeting, a NewsLanc reporter asked the Commissioners to weigh in on PA House Bill 247, which would require health care providers to apply for a certificate of need (CON) before proceeding with any expensive equipment upgrades or service expansions. This would include the construction of new facilities, like the one proposed by Lancaster General for West Earl Township.

HB247, also known as the Health Care Facilities Act, would bring CON to Pennsylvania for the first time since an earlier program expired in 1996.

Commissioner Craig Lehman, who worked in the State Legislature during that 1996 expiration, said that it will be important for this proposed legislation to effectively reign in medical expenditures without unduly limiting the availability of services: “I think the overall goal of certificate of need is to try and find a balance of infrastructure improvements in our medical systems…[so] that we are mindful of costs, without impacting access. I think that’s the balance that should be struck, if certificate of need is ever going to be reenacted.”

“I don’t know what the likelihood of certificate of need being reauthorized or not [would be],” Lehman added, “But I think that those are some of the things that are going to have to be discussed and debated and analyzed before certificate of need is reauthorized.”

Regarding the anti-CON assertion that regulated competition could lead to higher costs, Lehman said, “I think many of those issues remained unresolved, which is why it wasn’t reauthorized back in the mid-90s.”

Having not read the actual bill in its entirety, Commissioners Scott Martin and Dennis Stuckey declined to comment on HB247 for the time being.

Also at the meeting, the Commissioners voted 2-1 for the County Government to join the Pennsylvania County Health Insurance Purchasing Cooperative. Lancaster County will cover its employees through this pool of self-insured counties, having now terminated its full-insurance plan with Capital Blue Cross. The new plan will not alter any actual benefits for County employees.

Commissioner Martin, who voted in favor of the change, said that the bargaining power of this co-op will allow the County to shave about $1 million off the $21 million presently budgeted for employee health coverage. Also, Martin said, the new plan will enable the County to save money when employee health is strong: “When we have good years, we can sweep those savings back off the table and not just turn them over to an insurance company.”

Commissioner Lehman, who gave the only dissenting vote, maintained that the County’s full-insurance contract with Capital Blue Cross “protects the County better” with regard to financial risk: “In this economy,” Lehman said, “managing risk is important.” Lehman was also hesitant to support the measure due to the fact that Lancaster County would be the largest entity to join the co-op thus far. “What I think is going to end up happening is that…, if Lancaster County opts into [this] small county consortium, then we’ll be a marketing tool to create a large county consortium with other large counties in Pennsylvania,” Lehman asserted, “And I don’t like government being in the position to market any private product under any circumstances.”