Report calls for privatizing West Virginia's state-run hospitals
- A new report from the Public Policy Foundation of West Virginia recommends privatizing the state's seven public hospitals.
- The report, released ahead of Wednesday's start of the 2019 legislative session, claims state-owned hospitals suffer from bureaucratic inefficiencies, a red tape that leave them chronically underfunded, short-staffed and in need of capital improvements — at the cost of patient care. The report estimates current funding needs are shy by about $100 million.
- PPFWV calls for transferring operations of the hospitals to a Hospital Facilities Authority that would explore privatization options for the hospitals or specific services. The HFA would be governed by a nine-member board appointed to staggered three-year terms.
The Mountain State's seven public hospitals are currently managed by the Department of Health and Human Resources' Office of Health Facilities, but its work is hampered by personnel and procurement policies stemming from the Department of Administration.
"Instead, we would offer a process that would promote a detailed examination and evaluation of each hospital and a recommendation tailored to insure financial stability, high quality care and, in general, continuing to meet the health care need of West Virginia's most vulnerable," the report says.
Possible options include selling state hospitals to a for-profit or nonprofit organization, transferring assets to a public corporation with the sole purpose of owning and operating the hospital, leasing facilities or equipment to a management firm or operating under some form of joint agreement or joint venture. The report also mentions the possibility of a community-wide public-private partnership, comprehensive outsourcing and shedding of specific services.
The proposal takes aim at some of the concerns of critics of privatization, who argue it will lead to hospitals focusing on financial metrics, such as boosting volume, improving payer mix and accepting fewer charity cases.
A 2017 study of the effects of privatizing Louisiana's hospital system found the change resulted in shorter emergency room wait times, more outpatient visits, elimination of waiting lists for primary care and prescription and expanded specialty services, among others.
Another study of hospital privatization in California, Florida and Massachusetts between 1994 and 2003 showed improvements in hospital operating margins, higher volumes and reduced lengths of stay — but also some uptick in prices and the loss of beneficial services that weren't turning a profit.
- Public Policy Foundation of West Virginia Special Report by the Public Policy Foundation of West Virginia: State Hospitals
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