Norfolk’s Historic DePaul Hospital’s Efforts to Survive Stymied By Sentara

2021-04-14

DePaul Had the Highest Rate of Charity Care in Hampton Roads, Virginia

DePaul Hospital was founded as a refuge for the sick and dying during a Yellow Fever epidemic by the Catholic Daughters of Charity in Norfolk, Virginia, in 1855. It survived the Civil War, a devastating fire in 1899, and stayed true to its mission of providing care for the less fortunate for generations.

But it could not survive Sentara Healthcare’s determined lobbying that strangled its efforts to evolve the business model of the institution, which is located in one of Norfolk’s chronically under-served areas.

In January 2021, Bon Secours of Maryland, which had assumed ownership of DePaul, announced it was closing the hospital. This will bring an end to most services at the hospital that had the highest rate of charity care in Hampton Roads.

The decision to close DePaul Hospital was hastened by the moves of Bon Secours’ area rival, the $6 billion Sentara. The healthcare giant aggressively lobbied to block DePaul’s efforts to advance its operations so it could remain financially viable.

Sentara poached DePaul’s doctors, and it fought its attempts to gain state government approval to update its programs.

Norfolk Mayor Praises Proposal to Update DePaul Hospital

A series of 2008 decisions by the Virginia health commissioner’s office determined the future for DePaul Hospital. Bon Secours sought approval to build a new hospital in the Princess Anne neighborhood of Virginia Beach, a 60-bed hospital in north Suffolk and leave a 64-bed facility at DePaul.

Norfolk officials had previously resisted Sentara’s attempts to shrink the size of DePaul, and a letter from the Norfolk mayor to the health commissioner that says the city was grateful for Bon Secours’ “commitment to seek a COPN to continue a meaningful hospital presence on the DePaul campus.”

Sentara Objects to DePaul Plan

But Sentara had its own plans. It too wanted a new hospital in Princess Anne, which would have 120 beds, and to add 30 beds to its hospital in Suffolk — Sentara Obici. Sentara objected to Bon Secours’ applications.

In the end, Virginia health records show, the office of then-Health Commissioner Karen Remley rejected Bon Secours’ applications but approved Sentara’s, giving Sentara a market advantage that it continues to hold today. Remley had come to her post from Sentara but recused herself from considering the company’s applications.

Later in 2008, the two companies agreed to share ownership of a 200-bed hospital in Princess Anne. Sentara would own 70% and control the board. Bon Secours would own 30%. It drew upon some of the DePaul beds that Bon Secours had hoped to transfer for its benefit. This time, however, Sentara benefited the most.

It would not be the last time.

In 2016, Sentara proposed expanding Princess Anne Hospital by drawing beds from one of its other hospitals and five from DePaul.

DePaul’s Finances Deteriorate

A series of financial documents from the last 10 years shows the deterioration of DePaul’s finances. For the fiscal year ending Aug. 31, 2019, Virginia Health Information records show DePaul had an annual deficit of $15.6 million and a net worth of negative $146.2 million.

Bon Secours repeatedly tried to prop up DePaul by using government-backed bonds.

In 2018, Bon Secours proposed creating an 18-bed facility with four general purpose operating rooms at its Harbour View hospital by shifting beds from its Maryview hospital in Portsmouth. The state approved that application.

It amended that application in March 2020 in an attempt to forestall the sudden closure of DePaul. Bon Secours proposed to shift the beds from DePaul, not Maryview, and gradually delicense DePaul.

Sentara objected to that plan, saying:

“Bon Secours’ proposal will have a significant adverse impact on existing inpatient care resources, including at Sentara Obici.”

COPN has been criticized by five successive U.S. presidential administrations because it favors existing hospitals and prevents competition. That was precisely Sentara’s reasoning with the Bon Secours application, which the staff of Commissioner M. Norman Oliver recommended rejecting last October.

Sentara Accuses Bon Secours of Failing to Invest in DePaul

Although Sentara benefited from drawing beds from DePaul for Princess Anne, it pivoted last year in its arguments against Bon Secours’ latest proposal, accusing its rival of failing to invest in DePaul.

In fact, when Bon Secours proposed adding two general-purpose operating rooms at DePaul, Sentara opposed the COPN request.

Three months later, Bon Secours announced it was closing DePaul Hospital.

Checks and Balances Project has been investigating how non-profit, tax-exempt Sentara uses lobbying and influence to crush competitors, the lengths it goes to do that, and the impact on average citizens.

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Ray Locker is enterprise and investigative editor of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.