CHARLESTON, W.Va. — “A fragile situation financially” is how the president and CEO of the West Virginia Hospital Association describes the state of many hospitals in West Virginia beyond Thomas Health System which is in the process of filing for Chapter 11 bankruptcy.
“The economics just don’t work,” Joe Letnaunchyn said of the declining number of hospital patients insured through commercial or private insurance companies in West Virginia at a time when Medicaid and Medicare enrollments are growing.
Last week, officials with Thomas Health System, the system that includes Thomas Memorial Hospital in South Charleston and St. Francis Hospital in Charleston, announced plans to file for Chapter 11 bankruptcy protection to reorganize to address its debt structure.
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“Thomas Health is not closing its doors and there are no planned changes to employment, services, or how we deliver care to our patients,” the hospital announcement said.
In all, Thomas Health employs 1,700 people.
“The Chapter 11 process will not affect enrollment of patients or employers in healthcare plans in 2020.”
The specific factors cited in the bankruptcy decision included a decrease in commercially-insured patients at the same time of an increase in government-insured patients including those covered by Medicaid and PEIA that provide lower level reimbursements for services.
Hospital officials said Thomas Health had also been affected by patients who were not able to afford their deductibles along with the costs of the opioid epidemic.
“It’s something that’s not surprising,” said Senator Ron Stollings (D-Boone), a doctor and Democratic candidate for governor, on Monday’s MetroNews “Talkline” about the Thomas Health bankruptcy plans.
“Once you look at the other parts of the state — Wheeling, Bluefield, Williamson — these hospitals are in a very tenuous situation.”
In 2019, Ohio Valley Medical Center in Wheeling closed its doors for good.
Last week at the State Capitol, Stollings suggested using a projected $300 million Medicaid surplus in the coming fiscal year for increases to Medicaid reimbursement rates.
Letnaunchyn said it’s long past time to revisit those rates.
In southern West Virginia, for example, Letnaunchyn said closing coal mines have changed the economic dynamics.
“People went from having commercial insurance to either they left the state or they went on to Medicaid and you just can’t compete when you have an increase in Medicaid and a reduction in commercial payments,” Letnaunchyn said.
“Depending on the size of the hospital, one percentage shift from commercial to Medicaid can be about $15 million just in operations.”
Thomas Memorial Hospital opened in South Charleston in 1946.
Thomas Health System was formed when St. Francis Hospital was purchased in 2007.