CHARLESTON, W.Va. — State lawmakers talked about the possibility of privatization of state-owned health care facilities during a legislative interim meeting Tuesday.
None of the seven facilities—Hopemont Hospital, Jackie Withrow Hospital, John Manchin, Sr. Health Care Center, Lakin Hospital, Mildred Mitchell-Bateman Hospital, Welch Community Hospital, or William R. Sharpe Jr. Hospital—were mentioned by name, but Department of Health and Human Resources Chief Financial Officer Aaron Snodgrass confirmed there is a process in place.
“We as DHF (Department of Finance), along with the Department of Administration, are working with a vendor on a strategic initiative for the long-term care facilities, which may include privatization,” Snodgrass said. “We are working with a broker to find investors who want to invest in these facilities.”
State officials announced negotiations with Lument Securities LLC, a health care acquisition company, in July. Lument is helping to develop a plan to sell or privatize the four state-run nursing homes.
Audit Manager Mike Jones said state-run facilities battle the same challenges that private facilities across the country have been wrestling with since the pandemic. He said in the seven facilities there are a total of 876 beds and 846 positions but Jones could not provide detail on the number of contract employees versus state employees.
“Much like health care facilities across the nation, they are struggling to meet their clinical staffing needs,” Jones said. “As a result, they often must rely on contract labor to fill the gaps and maintain essential services.”
Jones presented the rapidly rising cost data over the last several years with lawmakers as part of the report.
“From FY 2015 to FY 2023, the total annual expenditure for contract clinical staff increased 955 percent, and the total cost for current contract labor at the seven facilities during this period was about $284 million,” Jones said.
Despite the environment of increasing costs, Jones said legislative activities taken recently have helped. Waivers have reduced the time to fill a vacancy from 600 days to two months in most cases. Legislative action has added pathways for more nurses to enter the field, and market studies are being done to address pay gaps.
“The rising trend in contract labor costs is not anticipated to subside,” Jones said. “Inflationary factors and continued vacancies at these facilities suggest these costs may never return to pre-pandemic levels.”
Lawmakers heard that multiple approaches over several years, even before the pandemic, have failed to address the issues. But Snodgrass told lawmakers trends are moving in the right direction, and given time, some of the staffing issues may improve.
“I don’t want to put many numbers out there because anything can happen,” Snodgrass said. “I will tell you that when we come back for spring budget meetings, if trends continue that we’re seeing, we will have good positive results to report for contractors.”