Fauquier Hospital’s announcement last week of a signed merger agreement with LifePoint Hospitals is more a sign of the times than a reason to worry that health care for Rappahannock County patients will undergo any drastic changes.
So says John McCarthy, who has long tenures as both Rappahannock’s county administrator and as a member (and former chair) of the board of directors of Fauquier Health, the parent company of Fauquier Hospital — whose agreement with Tennessee-based LifePoint awaits only the state attorney general’s sign-off and some “closing details.”
The merger gives LifePoint an 80-percent share in the joint venture, which will retain the Fauquier name and give Fauquier Health a 20-percent ownership stake (but an equal share in governance, meaning board of director representation). The joint venture, according to Fauquier Health’s announcement, would invest nearly $53 million in capital improvements over the next decade, including technology, equipment and recruitment.
The deal would also retire Fauquier Health’s debt and allow more than $100 million to be used for a locally governed charitable foundation to support “crucial community needs.”
“The hospital is a valuable asset, and if 80 percent of its assets are being bought by LifePoint, that creates value, and that value will accrue to the benefit of Rappahannock, too,” said McCarthy, speaking of the charitable entity.
He said the foundation-to-be could best be described at this juncture as a “work in progress” that will likely support, as do similar efforts elsewhere, “medical services that aren’t provided by the hospitals — such things as free clinics [Rappahannock’s twice-monthly free medical clinic is an offshoot of the Warrenton-based Fauquier Free Clinic] . . . mental health services, indigent care.”
The 97-bed Fauquier Hospital appears to be the facility most used by patients who live in Rappahannock County, McCarthy said. Some 70 percent of emergency transports from Rappahannock, McCarthy said, go to Fauquier Hospital. Just over 50 percent of Rappahannock residents’ overall annual hospital admissions are to Fauquier Hospital.
(About 20 percent are admitted to the 67-bed Culpeper Regional Hospital, which is part of the University of Virginia Medical System, and the remaining 30 percent are divided among the 180-bed Warren Memorial Hospital in Front Royal, part of the Valley Health system, and other facilities in Prince William, Charlottesville, Fairfax, Arlington and Potomac.)
The number of Rappahannock residents annually requiring medical services, a number still just in the hundreds among the county’s 7,000 inhabitants, is “only going to go up, as the county’s population ages,” McCarthy noted.
Rappahannock’s aging population — 21.7 percent of the county’s population is 65 or older, compared to the state average of 13 percent, according to U.S. Census estimates — is a tune McCarthy and others have been singing often lately, as the county looks toward coping with increased rescue and emergency-care costs (including with a new cost-recovery program that allows the county to bill insurance carriers for ambulance trips).
Fauquier Hospital still owns a 3.5-acre tract behind Union First Market Bank on U.S. 211, McCarthy said, when asked how the merger might affect the various plans mentioned over the last decade to bring some sort of general medical facility to Rappahannock.
“You have Dr. [Jerry] Martin, who’s moving toward retirement, and you have Dr. [John] McCue, who’s extraordinarily busy, the population continues to age and . . . so there is opportunity. Fauquier isn’t the only hospital looking at that. Valley Health is looking at that, too. Culpeper Regional is looking at that.”
McCarthy said the LifePoint merger will allow Fauquier Hospital to continue to offer quality health care by enabling administrative efficiencies. “The long and short of it is, the biggest benefit to us as an institution based locally is all the back-office stuff — inventory, billing, accounts receivable, HR . . .”
Hospital mergers everywhere, McCarthy said, are driven to some extent by Medicare reform. “The reimbursements for most procedures are low, and they’re going lower, so most hospitals are being forced to become more efficient. More and more of a hospital’s billings will be based on Medicare reimbursements.