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.”

At present, Pennsylvania is one of fourteen states in the US that do not operate a Certificate of Need (CON) process to regulate the introduction of new medical services or facilities—like the one proposed by Lancaster General for West Earl Township, about three miles away from the well functioning Ephrata Community Hospital. But, if State Representative Phyllis Mundy (Luzerne County) has her way, CON requirements will return to Pennsylvania, perhaps as early as next spring.

The Health Care Facilities Act (HB247), sponsored by Mundy last February, would reintroduce the CON process, a move that Mundy has called “critical to helping rein in the escalating costs of health care.” The bill is currently being considered by the House Insurance Committee. In her April testimony before the committee, Mundy stated that “one of the significant health care cost drivers is unnecessary duplication of expensive medical technology and services.”

Mundy asserted that the removal of CON requirements has sparked a costly and unnecessary “technological arms race” among Pennsylvania’s healthcare providers. Since the State’s CON program expired in 1996, Mundy noted, the number of licensed ambulatory surgical centers in Pennsylvania increased by 400%, from 44 to more than 230.

“These costs are ultimately passed onto consumers,” Mundy said.

Elaborating on the purpose of this bill, Mundy said that it would serve to

“…reconfigure our health care system by considering community health care needs on a regional basis so that capital expenditures on medical technology can be prioritized for certain areas but limited where the market is already saturated….Opponents of CON will tell you that the duplication of these health care services is about ‘choice’ and ‘competition.’ I believe it’s about profit. We need to recognize that competition is not always the solution; sometimes it’s the problem. And in this case, it’s driving people who need health insurance out of the marketplace.”

To reign in these excessive costs, House Bill 247 would:

• Establish local review committees to review CON applications and provide recommendations to the Department of Health
• Require applicants to demonstrate that there is not a more cost effect alternative to providing their proposed services
• Require applicants to demonstrate that their proposed service would not adversely affect healthcare costs
• Involve the Pennsylvania Health Care Cost Containment Council in the review process

The CON process would be engaged for any hospital-based improvement or project costing more than $2 million. (Some estimates for LGH’s proposed West Earl facility have reached as high as $155 million.)

According to Art McNulty, Executive Director of the Insurance Committee, HB247 would “absolutely” relate to a project like the one proposed for West Earl. McNulty even added that the scenario sounds quite similar to one that has occurred in Representative Anthony DeLuca’s Allegheny County district. DeLuca is Chair of the House Insurance Committee.

Not personally familiar with the LGH plan or the service capacity of Ephrata Community Hospital, McNulty qualified that a CON review process could, under certain circumstances, approve a project that did not appear reasonable at face value. For example, McNulty said, if LGH were proposing the introduction of particular services and technologies unavailable at Ephrata Community, a CON would likely be granted.

1) In the interest of transparency, improved performance and since it is a Public Foundation, LGH should open its board and committee meetings at least once every three month to the public and media so that proceedings can be observed, questions posed and issues discussed.

2) Three members of the Board of Trustees should be elected by the public to four year terms.

3) In recognition that LGH’s huge profits (well over a hundred million dollars each year) are in large part a result of its market dominance, at least 20% of earnings should be spent each year towards public health and for education. An extra $25 million would make a huge difference in the quality of health and life in our community.

4)  LGH should hold three public forums over the next year to explain and hear comments about its proposal to build a hospital within three miles of Ephrata Community Hospital in West Earl Township. We have not encountered a single person who doesn’t consider the notion bizarre.  Minimally, explanations and public discussions are in order.

In 2011, Lancaster General Health will discontinue health insurance benefits for all part-time employees working less than 20 hours a week. Furthermore, effective immediately, the county’s largest employer will no longer offer such coverage to future part-time hires working less than 20 hours. According to LGH Public Relations Director John Lines, the decision will affect 3% of the not-for-profit’s 7,000 employees, which approximately totals 210 working individuals.

NewsLanc was notified of this development late last week through the comment of a frustrated reader:

“Lancaster General Hospital just sent out a letter telling many of its part-time employees that they are getting kicked off of the hospitals health insurance plan at the end of next year.

“For all the surplus money they have and how much they spend on fountains and statues, they WON’T provide health coverage to some of their staff.

“The letter came as a complete surprise to people. Nobody asked the affected employees what taking away the insurance would do to them. The human factor was never considered.

“Executives and managers seemed annoyed at having to hear what this decision will do the families victimized by this shameless greed. The attitude displayed to the staff is basically ‘Let Them Eat Cake.’”

The “surplus money” mentioned by this reader amounts to $113 million dollars for the last fiscal year.

To verify the reader’s report, NewsLanc sent an inquiry to Lines, which included the following questions:

1. What prompted this decision?
2. In light of LGH’s $113 million surplus, why is the company cutting back on employee benefits?
3. How much budgetary savings does LGH expect to earn by eliminating this expense?

Lines’ response was not exhaustive, but did touch on the basis for LGH’s decision. According to Lines, “Each year, we compare the benefit practices of regional and national healthcare organizations. This year’s results showed it is highly unusual to offer health benefits to employees working less than 20 hours a week.”

According to Public Relations Director John Lines, Lancaster General is under no legal requirement to demonstrate a public health need for the proposed West Earl inpatient hospital and medical center. The facility would be located less than 3 miles from Ephrata Community Hospital, which runs at a capacity lighter than the national average for hospitals of its kind.

Last week, NewsLanc reported that, with no Certificate of Need (CON) program in Pennsylvania, the Department of Health would not play a role in verifying the public need for LGH’s proposed facility. Following that report, NewsLanc contacted Lines to determine whether there remained any other regulations similar to a CON. Through an email inquiry, NewsLanc asked:

“With no State-level Certificate of Need program in place, are there any other government agencies, programs, or authorities that must verify the need for a new medical facility such as the one proposed for West Earl?”

In reply, Lines simply answered, “No.”

In a phone interview with Joanne Salsgiver, Director of the DOH Division of Acute and Ambulatory Care, NewsLanc asked if the State would hold any form of regulatory veto over a health facility that blatantly duplicated nearby services. Salsgiver’s answer was simple and to the point: There is no Certificate of Need program in the State of Pennsylvania.

Pennsylvania is one of fourteen states in the US that do not operate a Certificate of Need (CON) program. In the other 36 states, such programs serve to assess the feasibility and public need for any proposed health care facility. But without a CON requirement in place, the State Department of Health (DOH) will hold no authority to judge the worth of Lancaster General Hospital’s proposed facility development in West Earl Township, less than 3 miles away from Ephrata Community Hospital.

According to an article posted by the National Conference of State Legislatures,

“The basic assumption underlying CON regulation is that excess capacity (in the form of facility overbuilding) directly results in health care price inflation. When a hospital cannot fill its beds, fixed costs must be met through higher charges for the beds that are used. Bigger institutions have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual needs.”

The ultimate value of these CON laws, however, has been a topic of debate for decades. Arguments have generally conformed to the usual ‘regulation versus deregulation’ protocol, with CON supporters contending that open market forces may not always seek the best interest of public health, and with CON opponents alleging that government regulation decreases competition and drives up costs.

Pennsylvania had a CON program of its own until the State Legislature allowed its legal provision to expire in 1996. While the program was in place, PA code required that “the construction, development or other establishment of a health care facility or health maintenance organization” be authorized by the Department of Health with a CON.

The CON review process scrutinously asked the question of whether a proposed medical facility would actually benefit public health in its area of service. Among many others, the assessment included the following considerations:

• “Whether there is any appropriate, less costly or more effective alternative method of providing the services available.”
• “Whether the proposed service or facility is compatible with the existing health care system in the area.”
• “Whether it will have an inappropriate, adverse impact on the overall cost of providing health services in the area.”
• “The impact of the costs of providing health services by the applicant resulting from the construction”
• “That in the case of new construction, alternatives to new construction such as modernization or sharing arrangements have been considered and have been implemented to the maximum extent practicable.”

None of these considerations, however, will be authoritatively weighed against LGH’s West Earl project. Meanwhile, Ephrata Community Hospital currently operates at a lower capacity than the national average for hospitals of its kind. An official from the existing Ephrata Hospital recently told NewsLanc that the institution not only provides adequate capacity for the local population, but also holds a long-term strategic plan to expand with future population growth.

In response to a NewsLanc request to attend the board meetings of Lancaster General Hospital, a high ranking LGH official responded as follows:

“Lancaster General Health and Lancaster General Hospital are both considered public charities under the IRS code. As noted in a prior email to NewsLanc from John Lines, our Board meetings and Committee meetings are not open to the public other than the one public meeting of the hospital board that is held each year.”

We don’t question the legal correctness of their decision, but conducting the public’s business behind closed door is worrisome, especially when partially through market dominance LGH is able to extract well over a hundred million dollars a year in profits from county residents.

We will be examining this issue further in the future. But for starters, we recommend that a county commissioner, the mayor of Lancaster, and the chair of the School District of Lancaster be made ex-officio members of the LGH board.

Then the public would have a voice in these insular proceedings, now conducted by board members who were selected by board members, and who may be unduly lavishing funds on Lancaster General Hospital rather than contributing to public health, education, and social safety net programs that are languishing for lack of adequate funding.