Surgical precision

Like many other businesses, health care systems are constantly consolidating and forging partnerships to create synergy.

In 2022, one of Virginia’s longest awaited agreements finally crystallized: a merger between Eastern Virginia Medical School and Old Dominion University. The creation of Eastern Virginia Health Sciences Center at ODU — folding the medical school into the university — was included in a bill sponsored by Sen. Louise Lucas during the 2023 Virginia General Assembly, and the measure was passing through the legislature as of deadline for this issue, allocating at least $10 million in state funding toward startup costs.

After Gov. Glenn Youngkin signs off on it, the merger would be required to take place by July 2024, and strategic financial plans, governing expectations and suggested metrics for improving community health care would be due to Youngkin and legislative leaders by Aug. 1.

Before the bill was filed, though, the news of an impending deal came trickling out. In July 2022, ODU hired Dr. Alicia Monroe as chief integration officer and senior adviser to ODU President Brian O. Hemphill, with the stated task of developing a plan to “integrate ODU and EVMS in 2023.” Last August, Aubrey Layne, Sentara Healthcare’s executive vice president of governance and external affairs, said he, along with ODU and EVMS officials, had met with Gov. Glenn Youngkin to discuss the merger, which would also involve Sentara.

This move wasn’t totally unexpected, as the two schools had entered into agreements with Sentara and Norfolk State University in late 2021, including the collaborative ONE School of Public Health.

But it’s a sea change compared with 2020 and early 2021, when EVMS and Sentara officials were in a standoff over a proposed merger that the medical school’s leadership opposed. Founded in 1973, EVMS is a rarity as a public medical school unaffiliated with an undergraduate university, which would change when it becomes part of ODU. With a change in leaders at EVMS, ODU and Sentara in 2021 and 2022, though, the possibility of a merger grew.

Leaders from all three institutions say that collaboration will help improve local health care, share staff and other resources, and raise more money from donors.

In addition to the EVMS-ODU merger, health care systems around the state marked a few changes of the guard. Former Sentara Health Plans President Dennis Matheis became Sentara’s new president and CEO, replacing the retiring Howard Kern in September 2022. Dr. Michael Dacey, Riverside Health System’s former chief operating officer, was promoted to become CEO with Bill Downey’s retirement at the end of 2022.

Bon Secours named a new Richmond market president, Mike Lutes, in August 2022, just before the health system was the subject of a New York Times exposé. The September 2022 story revealed how the nonprofit hospital system had benefited financially from a federal prescription drug program that allowed clinics in low-income neighborhoods to buy medications at steep discounts, charge insurers full price and keep the proceeds. Although the extra money was intended by federal lawmakers to be reinvested in impoverished hospitals — in this case, Bon Secours’ Richmond Community Hospital — the system instead used the money to invest in hospitals in wealthier areas around Richmond, as well as return money to its Cincinnati corporate headquarters.

Richmond Community made $110 million in 2021 revenue, a typical amount for the small hospital, which treats 1,500 patients a year. From 2013 to 2022, Bon Secours invested about $10 million in capital improvements at Richmond Community, in addition to investing $8 million in the hospital’s East End neighborhood. Executives have defended the system’s spending practices, which are legal. In January, Bon Secours opened a $16.5 million medical office in Richmond Community’s neighborhood, and system officials have said it will track health progress in the city’s East End over the next three years.

Meanwhile, a General Assembly bill that would have created greater transparency over how much health care systems profit from the federal drug discount law died quietly in the House of Delegates in January. Bon Secours opposed the measure.