Sharon Hospital appeals OHS decision on maternity unit

SHARON — On Wednesday, Oct. 18, Sharon Hospital appealed the state Office of Health Strategy’s proposed rejection of its plan to close its labor and delivery (L&D) unit.

The brief and exceptions filed by the hospital argued, in effect, that the Sharon Hospital primary service area (PSA) has less need for an operating maternity ward than it has for the cessation of financially unsustainable services. The hospital has said that the unit loses about $3 million annually, contributing to the hospital’s overall annual losses of over $20 million.

Citing financial concerns, declining birth rates in Litchfield County, and underutilization of its obstetrics unit, the hospital first announced its intention to close its maternity ward in 2018, and applied to OHS for a Certificate of Need in January 2022.

In August, OHS released the proposed decision denying Sharon Hospital and its parent company, Nuvance Health, a Certificate of Need to close its maternity unit on grounds that the hospital failed to demonstrate that the closure met the agency’s criteria for a CON: “public need, access to care and cost-effectiveness.”

In the brief filed with OHS, the hospital wrote: “Sharon Hospital was subjected to an unfair and biased procedure in the course of its CON application that violated its procedural rights.”

It characterized the proposed decision not as a product of OHS and the CON procedure, but as the work of an individual Hearing Officer. Throughout, the brief described the findings and conclusions as “arbitrary and capricious,” “prejudicial,” “inadequate,” “circular” and “betraying a startling misunderstanding of health system finances,” and accuses the officer of “cherry-pick[ing]” data, irrationality, and “prejudicial processes.” (It also argues that multiple delays in the proceedings effectively render the proposed decision inadmissible.)

The brief disputed the proposed decision’s argument that the closure of the maternity unit will have a negative effect on the quality, accessibility, and cost-effectiveness of care in the region.

Demand for Services

The brief took issue with the proposed decision’s interpretations of CON criteria, arguing that the proposed decision demanded “an impossible burden of proof” by requiring that the CON proposal to terminate services would ultimately “improve” access to and quality of local health services. The CON process, it stated, required that the OHS instead focus on the relative insignificance of the effect the L&D closure would have on access.

The brief argued that insignificance by laying out an existing lack of demand for the L&D unit’s services. The brief is clear that the Town of Sharon and Litchfield County are experiencing declining birth rates and an aging population. (Because the CON process requires only that a hospital’s services align with Connecticut’s Statewide Plan for healthcare access, the brief does not address the demographics of Dutchess County, New York, where the majority of the hospital’s clients reside.) 

The brief also described a situation in which expectant women in Sharon Hospital’s PSA are already choosing to bypass Sharon Hospital in favor of other options, because the small, local hospital does not provide the level of clinical care needed to accommodate certain types of high-risk deliveries.

A central question raised by the proposed decision, regarding the question of declining community demand for L&D services since 2019, was whether or not Sharon Hospital/Nuvance’s communications with the public had caused some prospective mothers’ choice to bypass of Sharon Hospital in favor of other hospitals, and so contributed to the decline in demand.

Contradicting the proposed decision’s finding that the hospital had ceased to market the L&D unit in 2019, the brief stated that Sharon Hospital continued to market their L&D services in newsletters, on its website, and in brochures. Simultaneously, said the brief, they informed current and prospective clients of their intention to terminate those services as soon as permitted by the OHS.

Accessibility

The brief emphasized the OHS finding that there are other local hospitals that are able and equipped to take on the limited population that would lose access to L&D services in Sharon.

It disputed concerns raised by the proposed decision that, according to national trends, termination of rural health care services have outsized effect on the uninsured, Medicaid recipients, women and indigent persons. National trends, the brief argued, have no connection to the Sharon PSA, which, as a population, is comparatively white, wealthy and insured. (The brief did not address the fact that nearly a third of people within the Sharon PSA fall below the ALICE income threshold for meeting basic needs).

The brief did not mention the OHS’s finding that the population utilizing Sharon Hospital’s L&D unit is different from the overall PSA: 48% of L&D clients in 2021 were on Medicaid.

The brief dismissed OHS’s concerns about the greater distance of alternative hospitals for much of the Sharon PSA, noting that 45 women who chose to give birth at Sharon Hospital in 2022 actually live closer to other local hospitals.

The brief also contested findings that longer travel times lead to worse birth outcomes because the study was conducted among women in The Netherlands, and had “zero applicability” on women in Connecticut.

The brief also challenged the relevance that community members’ testimony that the unpredictable nature of driving in weather in Litchfield County makes increased distances more fraught, on the grounds that they are “not experts in weather or transportation,” that such testimony does not rely on statistics, and that the roads in question are the same ones that expectant mothers are already traveling to reach Sharon Hospital. 

Cost Efficiency and Quality of Care

The brief dismissed the OHS’s finding that Sharon Hospital’s five-star CMS safety rating, which none of the proposed alternative area hospitals have, has any relationship to the relative safety and quality of care of Sharon’s and others’ maternity wards. 

In vociferous arguments against the relevance of Nuvance Health’s finances to Sharon Hospital’s CON case, the brief warned that “every dollar Nuvance Health is required to expend to prop up an underutilized service at Sharon Hospital is a dollar the non-profit system is unable to allocate to services and programs that will provide more care for more people in its communities” and ultimately “jeopardized each member hospital in [the Nuvance] system.

The brief described the cost inefficiency of 24/7 staffing and maintenance of the maternity ward in the face of declining use. Citing the OHS’s finding that “[i]n 2021, Sharon Hospital operated its L&D Unit 24/7, but for 202 days (55% of the time), there was no delivery of a single baby at Sharon Hospital.”

The brief stated that low reimbursement rates for commercial insurance and Medicaid (about $5,000 per birth), coupled with the low volume of deliveries, the hospital effectively loses some $20,000 on each delivery.

The Cost of Community Health

The inefficiencies of Sharon Hospital’s L&D unit were echoed in the brief’s discussion of the bleak financial situation of hospitals across the state. The brief cited a September 2023 report on hospital finances statewide which found that Nuvance Health lost over $66 million in fiscal year 2022.

In his testimony, Nuvance Health CEO Dr. John Murphy stated, “health systems such as Nuvance Health cannot continue to operate at large losses indefinitely. Nuvance Health itself has lost in excess of $100 million dollars since its establishment in 2019, and is facing a dire financial situation with a significant projected operating loss in fiscal year 2023.”

It is for this reason, he testified, that “Sharon Hospital must be self-sustaining” and cannot continue to rely on its parent company, Nuvance Health, for financial support.

In a separate development, OHS granted Sharon Hospital a CON to change their Intensive Care Unit (ICU) to a Progressive Care Unit (PCU) on Tuesday, Oct. 10. A PCU offers a lower level of care than an ICU, and is equipped and staffed to handle less critical cases that require less monitoring. OHS’s permission for this change, however, required that the new PCU “shall maintain, update, or improve the current level of critical care equipment as necessary to maintain the population and acuity of critical care services currently offered.”

The filing of the brief and exceptions was the latest move by Sharon Hospital in a five-year effort to close its labor and delivery unit. Members of the local community, led by Save Sharon Hospital, and elected officials have rallied to prevent that closure, and were granted Limited Intervenor status in the hospital’s CON case. It was the evidence provided by these groups and individuals to which the brief takes greatest exception: 

“The resulting Proposed Decision relied on anecdotal and irrelevant evidence instead of a fair consideration of reliable evidence and data offered by Sharon Hospital, and resulted in a flawed decision that was predetermined and unduly influenced by public pressure.”

Effectively, Sharon Hospital argued that ending the unsustainable financial outlays required by the continued maintenance of the maternity unit is more significant to maintaining quality and access than is the continued offering of those services. 

“Failure to [approve the application] amounts to clear legal error subject to reversal by the Superior Court, and would represent a short-sighted policy error that imperils the present and future of Sharon Hospital,” stated the brief. 

The next step in the CON process will be the presentation of an oral argument from Sharon Hospital on Nov. 8.