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Experts testify in UHC hearing

by Jim Fisher

STAFF WRITER

CHARLESTON -- While Monday's hearing about United Hospital Center's proposed new hospital was dominated by talks of a failed merger with Fairmont General, Tuesday's testimony was much more technical.

United Hospital Center has applied with the state Health Care Authority for a Certificate of Need to construct a new hospital along Interstate 79 in Bridgeport. The state's hospital regulatory agency is conducting an evidentiary hearing this week to consider whether to approve the project.

While the process itself would be complex, the proposal is further complicated by a similar proposal for Fairmont General. The Marion County hospital wants to sell to Triad Hospitals Inc., a Dallas-based for-profit company, which in turn wants to build a new facility.

With the notable exception of a Clarksburg city councilman and two representatives of West Virginia University Hospitals, Tuesday's hearing comprised testimony from a variety of expert witnesses who spoke mainly about finances.

"UHC would probably rank in the top 4-5 percent of all hospitals in the U.S., in terms of financial strength," said Dr. William Cleverley, a nationally recognized expert in the realm of health care finance. Cleverly said UHC's current charges are "extremely low" compared to Fairmont General Hospital as well as both the state and national averages.

"(UHC) would be a textbook example of the kind of organization you'd like to see grow," Cleverley said.

Cleverley declined to comment about earlier testimony from Ernst & Young accountant Jane Benjamin in reference to the hospital's profit margin should patient volume remain flat once the new hospital is built.

Benjamin testified that while UHC's projections look promising, if patient volume does not increase, while rates continue to climb each year, the profit margin would decrease.

To counter Cleverley's testimony, state Consumer Advocate attorney Charlie Dunn brought in Deborah S. Kolb, executive vice president of Jennings Ryan & Kolb in Atlanta. That firm, like Cleverley's company, also specializes in providing financial consultation for health care facilities.

Kolb questioned several aspects of UHC's financial projection, saying many of the estimated figures and processes were flawed. Kolb testified that she believed the financial feasibility was too conservative in estimating increases in salaries and benefits, utilization of hospital services was overstated and that yearly rate increases will actually be much higher than estimated.

Those increased costs will eventually be passed on to the consumer, specifically those with private insurance companies, in the forms of higher premiums, deductibles and co-payments, according to Kolb.

She also questioned the continued existence of obstetric and pediatric beds, saying the projections were too liberal. Kolb does not believe the actual usage of those beds will meet the state minimum standards. She also noted that Fairmont General also probably could not meet the standards.

"From a health planning perspective, as an outside consultant, it seems very clear to me that some type of joint project would be the best thing to do," Kolb said, echoing the majority of arguments Monday.

Many witnesses Tuesday were asked to comment on the feasibility and reasonableness of UHC and FGH merging operations and creating a single, large regional facility. For the most part, those questions came from HCA Chairwoman Sonia Chambers.

"You're talking about two expensive, complex projects, in an area with weak financial stability and a declining demographic," Kolb testified. "It's pretty clear that both hospitals will be targeting the same areas."

As expected late Tuesday, Clarksburg City Councilman Jim Hunt testified about the city's position. While Hunt personally has said he is in favor of continued quality health care, he said he was in Charleston "representing the 17,000 citizens of Clarksburg."

"Regardless of the decision that is made, I feel I would be neglectful of my duties if I didn't come down here," Hunt said.

Officially, the city's position is that the state's commitment to build an access road from U.S. 19 to U.S. 50, coupled with adjacent land, a new VA Bridge and a soon-to-be constructed VA nursing home, makes the current location worth another look. Hunt said the nearby land, which hospital officials have dismissed as unsuitable, has been examined by a "reputable engineering firm," and can fit the footprint of the proposed new facility.

The hearing is expected to finish today, although a decision is not expected for months. Chambers has said the HCA probably won't make a decision until after a similar hearing for the Fairmont General Hospital/Triad Certificate of Need application. That hearing has not yet been set.

Staff writer Jim Fisher can be reached at 626-1446 or by e-mail at jfisher@exponent-telegram.com