Dive Brief:
- Duke Health and Novant Health have asked the North Carolina Division of Health Service Regulation for permission to build a $225 million hospital in Mebane, North Carolina, according to a Certificate of Need application filed last week.
- If their application is approved, the project will serve as the test run for Novant and Duke’s fledgling joint venture, which was first announced in March.
- The health systems are competing against Kaiser Permanente-backed Cone Health for approval. The Risant Health-owned system filed its own CON last week to build a similarly-sized facility in the county for up to $275 million.
Dive Insight:
Cone said it could build the facility by 2028 and open by 2029. The 46-bed hospital would have 15 emergency department bays, three general operating rooms and three obstetric labor, delivery and recovery beds.
“Cone Health has successfully helped meet the health care needs of eastern Alamance County close to home for more than a dozen years,” said Cone Health President and CEO Mary Jo Cagle in a statement about the health system’s application.
A spokesperson from Duke Health said their facility with Novant would “expand access to acute care services and clinical expertise in the region, including emergency department services, inpatient services, and labor and delivery care.”
The state’s CON process, which tasks the state’s HHS department with reviewing building proposals to ensure they align with healthcare spending goals and community care needs, usually takes between 90 and 150 days.
Novant and Duke, which drew in almost $10.2 billion and more than $6.8 billion in revenue last fiscal year, respectively, plan to open an unspecified number of campuses across the state. Construction will begin this summer and fall and last approximately 18 months, the systems have previously said.
The systems say working together will help them increase access to primary care and advanced specialty treatment and shorten wait times.
Health systems have increasingly been gunning for territory in North Carolina, as the state’s growing population — and notably, its rising population of aging Americans — makes the state ripe for investment.
The top players are often in direct competition for market share. Last month, for example, regulators reviewed proposals from both Novant Health and Atrium Health that sought to add acute beds in Carrabus County. In Novant’s application, the health system warned that extending Atrium’s grip on the market would harm competition and care quality.
However, changes could be coming to North Carolina’s healthcare oversight processes. State Republicans are currently advancing legislation to repeal the state’s certificate of need laws. If successfully repealed, health systems will be able to build new facilities with fewer regulatory hurdles, potentially opening the door to multiple systems building in the same hot markets.
The push to repeal CON laws follows similar moves in other states.
Twenty-one states updated their CON laws between 2021 and 2023, with most changes creating new exemptions or flexibilities for some providers. In some cases, the changes allowed hospitals to request additional hospital beds and get them approved within a couple of days, experts told Healthcare Dive.
Creating efficiencies in the regulatory approval process could allow health systems to more quickly address capacity constraints, experts say. However, others argue the CON process is necessary to incentivize health systems to continue investment is less economically advantageous markets, such as rural areas.
