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Life with the script doctors / May 01, 2013
It doesn’t take a cynic to trot out the phrase “according to script” to describe Monday’s town hall-style meeting in South Boston on the proposed affiliation of Norfolk-based Sentara Healthcare and Halifax Regional Health System — particularly not with the actors in this drama having their lines down pat.

The event featured HRHS CEO Chris Lumsden, Board Chair Dave White and Sentara Vice-President Ken Krakaur offering a stream of assurances on the deal’s positives — for the hospital, for the health system as a whole (including Meadowview Terrance nursing home and physicians clinics in Chase City and Clarksville) and for the local communities, including Mecklenburg, that depend on HRHS for so much.

How much? You can start with the fact that HRHS accounts for a huge share of the health care services delivered in the region, then go down the list to the number of jobs at stake — nearly 1,300 positions within the health system itself, to say nothing of spinoff employment created by the mere presence of the South Boston hospital. Nor can HRHS’s vital role in drawing talent to the region be overlooked. Is it any wonder that the architects of this deal seemed so keen to preempt any and all fears that might arise among the public?

Unease over the prospect of change — the hospital partners say their affiliation agreement will take effect on or around July 1 — is understandable. Also understandable is skepticism that the Sentara-HRHS embrace represents a best-case scenario for the region’s future. Something worrisome must be driving Halifax Regional’s decision to abandon full independence after more than 50 years as a standalone, community hospital. No matter how many times hospital officials labor to answer the question, “why,” the sense will persist that there is more going on here than meets the eye.

Yet after weighing what I know about the forces driving this arrangement — and tossing out the caveat that there are many unknowns yet to be known — I’m going to go out on a short limb and say that HRHS has done well for itself and for the community by choosing Sentara as its partner. It remains to be seen, of course, how the integration of the two hospital organizations works in practice, yet there is good reason to think that Sentara will live up to the plaudits that gushed forth at Monday’s public meeting.

The decision to affiliate with Sentara also must be judged against the alternative of standing pat and doing nothing. Remaining independent was and is a risky option for HRHS (as it is for Community Memorial Healthcenter in South Hill, which is in the midst of its own quest for a potential suitor; more on that in the second). The status quo may be comforting, but it’s not always as stable as it seems.

Doing my best to read between the lines, here’s what I took away from the town hall meeting,

Judging from the number of times Lumsden praised Sentara for eschewing layoffs, a major point of Monday’s exercise plainly was to allay the concerns of HRHS employees themselves. Maybe this is an obvious point — after all, who else is more affected by outside management coming in? — but it was a bit eyebrow-raising to see Lumsden return time and again to the subject of Sentara’s employer record, which he termed “truly exceptional.” On such matters, I suppose there’s no such thing as pounding the point too hard. Halifax Regional Health System is the largest private employer in the Halifax-Mecklenburg-Charlotte region. The people who work there have to be thinking about their futures with Sentara’s arrival. It’s hard to imagine otherwise.

On several occasions, Lumsden noted that Sentara has not in the past 35 years ordered a layoff or a reduction-in-force. And that is indeed reassuring to know. But another of Lumsden’s talking points — that the Sentara affiliation offers the best chance for HRHS to grow — factors into the equation as well, especially insofar as the broader community is concerned. After all, if Sentara found the need to reduce staffing levels, it wouldn’t have to resort to layoffs to make it happen. Attrition and ordinary turnover would suffice. To maintain its 1,200-plus workforce, HRHS probably must grow — especially as downward cost pressures weigh on the health care industry. Chances are, the emphasis on growth is not so much about creating new jobs, but holding on to the ones we have — which, it must be said, is no small feat nowadays.

Dr. Jimmy Priest, chief of the medical staff at HRHS, spoke only briefly at the public meeting, but I was struck by how he touched on the subject of hospital safety — an area where Sentara unquestionably shines. In a recent hospital safety report card by Leapfrog, a national health care watchdog group, all seven Sentara general hospitals in the Tidewater region scored an A. (By contrast, CMH in South Hill was the only Southside hospital to receive the organization’s highest grade).

The Leapfrog ratings have run into criticism from hospitals that don’t directly participate in the survey and argue that the report card methodology is skewed. (This was the argument offered by Halifax Regional, among others, after the local hospital earned a C.) Still, no factor is more important — yet more underrated — in determining the quality of care than hospital safety. Sentara’s performance in this regard offers one more reason to feel pretty good about its affiliation with Halifax Regional.

HRHS has a well-earned reputation for fiscal health — having a $68 million net worth will do that for you — but it’s vulnerable to changes that even now are remaking the health care industry. The hospital business is in the midst of one of its periodic waves of consolidation, driven in part by the Affordable Care Act, neé Obamacare, which puts newfound pressure on providers to improve outcomes rather than simply grow fat by ordering up a never-ending number of procedures, seemingly the more expensive, the better. And here in Southside, the feds have clout: With Halifax Regional Hospital deriving roughly three-quarters of its operating income from Medicare and Medicaid, it has more to lose than most if it winds up on the wrong side of reform.

Affiliation with Sentara, seen in this light, offers HRHS a measure of protection; for one thing, the new health care law requires hospitals to assume top-to-bottom accountability for patient health, and levies stiff penalties for missteps, such as the patient who must be readmitted because she didn’t get adequate care the first time around. In theory, larger hospitals should be able to help smaller hospitals avoid these pitfalls, while broadening the specialty care options that many patients require.

The worry with hospital consolidation, however, is that it’s less about instilling quality and more about consolidating market power, thus making it harder for the government or private insurers to impose their will. Such would seem to be unlikely in the case of Sentara and Halifax Regional, which have no benefit of geographic or market overlap. Yet there was one shift in tone at the town hall meeting that was perceptible: there was much, much more talk about Optima, Sentara’s insurance offering. When I asked about this facet of the deal many months ago, no one seemed to assign any great importance to it. How things can change.

For the record, I think it would be wonderful if Sentara’s growth on the provider side gave rise to greater local competition (with Anthem, naturally) on the insurance side. But this circles back to another key issue with implementation of the Affordable Care Act: the law’s push to create health insurance exchanges — best described as a virtual, transparent marketplace for comparing employer-based and individual coverages — while expanding government insurance programs, notably Medicaid. Yet because Virginia’s Republican-dominated legislature is doing all it can to delay and deny implementation of the law, neither the state exchange or Medicaid’s expansion has been accomplished, and hospitals can’t be too sure of where they will stand when the law kicks in in earnest in 2014.

Herein lies the problem for community hospitals such as Halifax Regional. Rushing into the arms of a bigger brother would be understandable even if there were no upheaval taking place in the industry and the future were less uncertain. To their credit, however, HRHS officials give no indication of having rushed into this deal. People who witnessed the turmoil that greeted the sale of the Danville and Martinsville hospitals years ago might be naturally wary of what’s happening in South Boston, but I’m hopeful Sentara will prove to be an excellent choice for the region, every bit as good as the hospital folks insist is the case.

One footnote: At the Monday gathering at Halifax Regional Hospital, I asked Krakaur, the Sentara V-P, if his not-for-profit chain was seeking to partner with CMH in South Hill. He said no. With the healthcenter in the thick of its own search for an affiliate, something tells me that we’ll need an update on this subject very soon.

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