Adding competition in Alamance County would be good for residents
The two hospital systems that are competing to build a hospital in Mebane – Cone Health and Duke University Health System with Novant Health – have filed reports with a state division charged with overseeing the process to outline why its application should be approved and the other’s should not (see related story, this edition).
A state law allows anyone to file written comments about a pending application for a Certificate of Need that healthcare providers are currently required to obtain from the Healthcare Planning and Certificate of Need (CON) section with the state Department of Health and Human Services prior to expanding or building new healthcare facilities in North Carolina.
Cone Health and Duke University Health System, in partnership with Novant Health, each filed CON applications with the state Department of Health and Human Services (DHHS) on April 15, seeking state approval to build what would become the city of Mebane’s first hospital. The public comment period closed last month; Cone and Duke Novant submitted the only written comments about the competing proposals for a hospital in Mebane, according to the CON section within the state health department.
Each hospital system is seeking to build a 46-bed acute care hospital in Mebane, in alignment with the latest State Medical Facilities Plan for DHHS, which projected that Alamance County would have a deficit of 46 hospital beds by 2027, based on trends in population growth.
The proposed Cone Health Mebane Hospital would span 161,578 square feet that would be incorporated into its existing MedCenter Mebane campus off Mebane Oaks Road at 3940 Arrowhead Boulevard, Cone officials confirmed this spring for The Alamance News.
The proposed Duke Novant Mebane Hospital would span 145,060 square feet on 22.4 acres that front I-85/40 along Gregory Poole Lane, on vacant land that Duke University Health System had purchased in 2021 and 2022, based on documents filed at the time with the county’s Register of Deeds.
In its written comments to the CON division, Duke Novant suggests that introducing a new hospital in the county would improve patient care and potentially drive down costs. Duke Novant also contends that Cone Health, which filed its application on the same day that Duke Novant filed its CON application, is trying to maintain a monopoly on the local healthcare market.
“Given its failure to relocate any acute care capacity to Mebane since 2008 [when construction of MedCenter Mebane was completed], it is reasonable to assume that Cone Health’s current application is, at least partly, designed to prevent a new competitor, such as Duke Novant Mebane Hospital, from developing acute care beds in Alamance County, where Cone Health currently has 100 percent of capacity,” Duke Novant states in it written comments to the CON division.
“There is a public interest in creating, maintaining, and improving competitive balance to keep Cone Health as the sole acute care provider in Alamance County and enabling Cone Health to dictate rates to commercial payors, self-insured employers, and individuals,” Duke Novant states in its comments on the competing application submitted by Cone.
In addition to acute/emergency services, both hospital systems indicated in their application materials that they would offer a comprehensive menu of healthcare services, including surgical services, intensive care, obstetrics, diagnostic imaging, and therapeutic services.
Yet, according to Duke Novant, only one proposal expands healthcare access and choice for Alamance County residents. Introducing a new acute care provider (Duke Novant Mebane Hospital), “compels all providers to elevate performance, improve patient experience, and offer more competitive pricing,” according to the written comments about its competitor’s application that Duke Novant submitted to the CON section last month.
Duke Novant also claims it would expand healthcare access for “medically underserved groups,” as well as Medicare and Medicaid recipients, at lower costs than Cone Health Mebane Hospital.
Average costs for healthcare for patients covered by Medicare would be lower at the Duke Novant Mebane Hospital ($28,251 per discharge) within three years of opening the hospital, versus the average costs for Medicare patients at the Cone Health Mebane Hospital ($69,196 per discharge), based on an analysis that Duke Novant included with its written comments about its competitor’s proposal.
Duke Novant projects average costs of $9,362 per discharge for patients covered by Medicaid within three years of opening, versus average costs of $23,139 per discharge for Medicaid patients at Cone Health Mebane Hospital, based on Duke Novant’s analysis.
In its written comments about its competitor’s proposal, Cone Health outlines the projected gross revenue that Cone Health Mebane Hospital would receive from Medicare and Medicaid patients but does not appear to include the average costs per patient.
A decision by the Healthcare Planning and Certificate of Need Section is expected later this year, according to the CON applications that have been filed by Cone Health and Duke Novant.
Both Cone and Duke Novant have given a general timeframe for opening a hospital in Mebane as the first half of 2029, based on the application materials the two hospital systems filed with the state on April 15.
