Next month Riverside Health Systems is filing its third application to build Doctors Hospital of Williamsburg. Riverside president Rick Pearce answers questions about
patient benefits, competitive factors, nursing slots and other issues.
What’s changed in the new application?
Doctors Hospital of Williamsburg is requesting to transfer 30 medical surgical beds and 10 ICU/CCU beds from Riverside Regional Medical Center. This facility will be on a slightly smaller scale than in previous applications, but still containing a 24/7 emergency department, physician offices, and full diagnostic and surgical capabilities.
Competition is said to create savings. Where will those savings occur?
When we go to the gas pump, we see the effect of not having competition with Big Oil. Competition lowers prices for everything in our society. Hospital charges are those costs that the general public associates with hospital pricing. However, charges are not the real cost to the consumer. Hospital collections or “net patient revenue” have the greatest impact on healthcare purchasers.
Explain net patient revenue.
This revenue consists of amounts received from Medicare, Medicaid and insurance companies, as well as those patients who pay cash. The latter category in most every circumstance receives a discount ranging 20%-40%.
Except from the feds?
Medicare and Medicaid have pre-set rates, depending on the service and the patient’s medical diagnosis. Therefore, hospitals and other providers have no say in what they are paid for these services.
What about commercial insurers?
Companies such as Anthem, CIGNA and HMOs pay hospitals based on negotiated rates. If there is competition, an individual hospital wants to have the insurance company’s subscribers use their facilities and will accept a lower rate of reimbursement.
If there is no competition, such as in Virginia Beach, the hospital can dictate to the insurance company what rate it expects to be paid.
And if there’s no agreement?
Subscribers will have to travel significant distances, perhaps away from their family doctor or specialist, to get treatment. To avoid this situation, health insurance companies will agree to higher payments. For the consumer, higher payments to health care entities means higher insurance premiums.
How will the consumer benefit?
Thousands of citizens of Williamsburg and James City County will be much closer to a hospital since the distance between Sentara Williamsburg and the proposed Doctors Hospital is almost 11 miles. The people living in Grove, Kingsmill, lower James City and most of Williamsburg will have improved access to vital 24-hour care. In addition, competition should raise the bar of quality access across the board.
But will it mean lower charges for procedures or medication?
By eliminating the monopoly on in-patient care, insurance companies will be able to negotiate more favorable reimbursement rates to hospitals, which could result in lower increases in insurance premiums and lower charges.
Who else benefits?
Competition always results in enhanced quality. Employees benefit as competing institutions try to attract the best and the brightest. The consumer benefits because customer service matters more in a competitive environment. Physicians benefit because if their needs for patient care are not being met at one hospital, they have a clear alternative.
There's a shortage of nurses. How will you staff the hospital?
In an interview for the Gazette in August 2007, Sentara stated that the nursing vacancy rate was around 3%. This figure would indicate that the recruitment of nurses is not a significant problem.
Then what’s your plan?
Riverside currently has 80 nurses who reside in Williamsburg, many of whom may elect to work at Doctors Hospital. About 100 individuals a year who live in greater Williamsburg apply for jobs at Riverside Regional Medical Center. Further, Riverside Health System maintains its own School of Health Careers in which more than 150 registered nurses are currently enrolled. Some 86% of the graduates remain employed by Riverside beyond the first year.
How many nurses will you need?
The hospital has budgeted 55 full-time nurses and 17 nursing assistants.
Why should your third application fare any better than the first two?
We believe that it will succeed. In 2008, the Virginia General Assembly passed HB502, which requires the state health commissioner to consider citizen access, community support, and competition in making Certificate of Public Need decisions.
How important are those three changes among the other criteria?
This language has not been part of the decision-making process in previous applications. Riverside has in previous attempts demonstrated overwhelming community support for a second hospital.
Judging from the volume of letters, petitions, and resolutions coming from the greater Williamsburg area, the expression of community need appears even stronger.
Any hard data to demonstrate community support?
A recent public survey by Bonney & Co. of the residents of greater Williamsburg demonstrated that over three-fourths of the people strongly support two hospitals for Williamsburg.
Are there new challenges for the application?
Other than the fact that consumer opinion now matters in making Certificate of Public need decisions, Doctors Hospital still faces the same challenges as in prior applications.
What if you’re rejected again?
If the people of Williamsburg continue to express their strong support of a second hospital, Riverside will continue to seek approval until it is achieved.
Can you improve ER service times over Sentara Williamsburg?
We are not familiar with the actual times of service at Sentara Williamsburg Regional Medical Center.
How do you calculate ER times?
We measure very carefully the total time of service of every patient, and we also carefully measure our patients level of satisfaction with the quality of care and the outcomes of the visit.
Riverside has recently completely reorganized our Emergency Departments and our Level 2 Trauma Center. Because our trauma center deals with major accidents, cardiovascular crises, strokes, acts of violence, every hour and every day is different.
What’s the benefit of two ERs?
If Williamsburg had a second hospital, the Doctors Hospital emergency room would be closer and more convenient for thousands of people. By virtue of the fact that everyone would not be restricted in going to one emergency department, we believe that time of care, outcomes, and quality of care will be at a high level at both facilities.
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- Riverside Will Re-Submit Applications For Doctors Hospital COPNs
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Published: September 2, 2008