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Posted: Tuesday, Apr. 24, 2012

Hospital bypasses county OK, gets legislators’ help

By Karen Garloch and Ames Alexander
Published in: Prognosis: Profits

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Last year, when Carolinas HealthCare System wasn’t getting what it wanted from Mecklenburg County, it turned to state legislators for quicker, more favorable, treatment.

In the last days of a busy session, the N.C. General Assembly passed a law that circumvented the county and gave the region’s largest hospital system what it asked for.

The power play started when Carolinas HealthCare asked for the county’s OK on its proposal to build a new psychiatric hospital in Huntersville. County officials delayed signing off, worried that a new suburban hospital could take paying patients away from the county-owned behavioral health center, 66-bed CMC-Randolph.

Carolinas HealthCare, which manages CMC-Randolph under a contract with the county, promised to pick up construction costs and operating losses at the new hospital. But county officials still worried that the project would end up costing taxpayers.

Hospital officials found the delay baffling because of the demonstrated need for more psychiatric beds and their offer to pick up expected losses.

About half of state-operated psychiatric beds have closed in recent years, leaving many patients without places to go. In Charlotte, inpatient occupancy at CMC-Randolph regularly exceeds 100 percent, and that means that 20 to 30 patients routinely wait in emergency departments for a psychiatric bed, hospital officials say.

Lanier Cansler, until recently the state’s secretary of health and human services, had been pushing to transfer psychiatric beds from Broughton Hospital, a state psychiatric hospital in Morganton, to the community. But under existing law, Carolinas HealthCare needed Mecklenburg’s support to apply for the transfer of beds.

Early last May, frustrated by the county’s delay, Carolinas HealthCare CEO Michael Tarwater threatened to build the new hospital in an adjacent county. But he didn’t have to make good on that threat.

On June 2, Sen. Fletcher Hartsell, a Cabarrus County Republican, modified a pending bill so that Carolinas HealthCare would be allowed to work directly with the state to transfer beds from Broughton, circumventing the need for county approval.

The modified bill passed June 16, just two days before legislators adjourned. There was no debate and no reference to the dispute between Carolinas HealthCare and Mecklenburg.

Hartsell, whose district includes Carolinas Medical Center-NorthEast in Concord, which is owned by Carolinas HealthCare, said he knows the legislative action caused hard feelings. But he said he introduced the bill because he agreed with Cansler’s assessment. “We flat out need the beds. Period,” Hartsell said.

Hartsell said he’d been told last April by the hospital system’s lobbyist, Martha Ann McConnell, of the possible need for legislation to expedite the matter. He said she returned to him in late May with an official request for help.

Once the bill was modified, it didn’t take long for Mecklenburg officials to hear about it. Hartsell said he got a call several days later from County Attorney Marvin Bethune, who was his law school roommate. A day or two later, he said, County Manager Harry Jones showed up in Raleigh to ask legislators not to make the exception for Carolinas HealthCare.

Jones said he didn’t think the General Assembly should get in the middle of a dispute between Mecklenburg County and Carolinas HealthCare. He also said county officials had neither approved nor opposed the Huntersville project but had asked for more information.

His plea failed. The bill passed the Senate on June 7 and the House nine days later. It was a stunning turnaround that both offended and impressed county officials.

“It’s an example of raw political power that no one else I know has,” said Commissioner Bill James, who noted that former Gov. Jim Martin and former Mecklenburg commissioners chairman Carla DuPuy have been on the hospital system’s payroll. All are Republicans.

“From a political standpoint, they’re the most powerful entity in Mecklenburg County,” James said.

In a letter to Tarwater, Jones said: “The only conclusion I can draw from your actions is that you hoped to pass this legislation based not on its merits but rather by sneaking it through unnoticed by the county. …

“This willful disregard for open and transparent communication appears to have been a furtive action to capitalize on our trust and the 70-plus year relationship. Mecklenburg County would have preferred hearing directly from you about your legislative attempts at circumvention of county authority, and is stunned that you did not tell us.”

The Huntersville hospital is on hold. In March, Huntersville commissioners denied the system’s request to rezone hospital-owned land at N.C. 115 and Verhoeff Drive.

Carolinas HealthCare officials say they are evaluating their options and looking for another site. The project is expected to cost $30 million, excluding land. They estimate operating losses of at least $5 million a year for the first five years.

“One thing that is absolutely certain – and will not change – is the urgent and compelling need for more inpatient beds to serve our community,” Tarwater said. “We have no intention of turning our back on this initiative.”

Garloch: 704-358-5078

Garloch: 704-358-5078

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