North Carolina's approval process delays Weaverville hospital from breaking ground

ASHEVILLE, N.C. (WLOS) — It's been 16 months since AdventHealth got the state health regulator's green light to build a hospital in Weaverville. AdventHealth had hoped to open the $254 million, 67-bed facility by 2025. But groundbreaking on the 25-acre site on U.S. 25/70 off Ollie Weaver Road has been delayed.

“Having to manage and address the appeal did have us kind of waiting for a lot of things,” AdventHealth spokeswoman Victoria Dunkle said.

Although AdventHealth has closed on the 25-acre property next to the Southern Concrete cement plant, no dirt has been moved and no blueprints are in place. The issue is a waiting game for an administrative law judge to rule on Mission/HCA Healthcare’s appeal of the state's decision to approve a certificate of need for AdventHealth and not Mission.

“We didn’t stop working behind the scenes. We’ve got a pen and ink rendering from an artist of what we hope it will look like. It will be a decent size footprint in that community,” Dunkle said.

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But, based on construction time, it could be 2027 or 2028 before the hospital opens with an estimated two- to three-year timeline to build. Dunkle said the hospital will have a staff of 350-400, including employees for an emergency department.

The hospital will be smaller than AdventHealth’s 103-bed facility in Hendersonville and less than a tenth of the size of Mission Hospital's 815 beds.

The question of whether AdventHealth’s future small hospital could compete with Mission for patients is debatable, according to one expert.

“The fact that you have two hospitals does not mean that the two hospitals are going to compete with one another,” said Barak Richman, a Katharine T. Barlett Distinguished Professor of Law at Duke University’s School of Law with expertise in health care policy.

“But a necessary first step is to have a second possibility. And, in most of America, there’s only one hospital system in town," said Richman, who recently wrote an op-ed in Politico about the importance of competition for patients, specifically for medical costs in the hospital market.

His specific focus is on questions of competition with new hospitals opening and if that can serve to effect in essence a bidding war that could lead to lower prices for procedures and services.

“You have to have insurance companies that are trying to figure out what the best options are. You have to have a framework of competition to really take advantage of the existence of that second option. Competition just doesn’t happen on its own," Richman said.

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There’s much more that goes into getting patients into a different hospital than just building another option, Richman said. Insurance companies insuring individuals across Western North Carolina are significant harbingers of control over potential price negotiations on procedures and hospital fees that could potentially put hospitals in competition.

Richman said primary care providers in Western North Carolina also have the power to direct patients away from one hospital to another.

With AdventHealth’s Weaverville site, the reality is the 67-bed hospital is a fraction of the 815-bed Mission Hospital in Asheville, and AdventHealth’s site is also a 15-minute drive from Asheville. Advent got approval from the state to open the Weaverville site to serve communities north and west of Asheville.

“Once there is a second possibility of seeking care, another alternative, you’re going to need insurers and medical experts and independent physicians to make informed choices about that place," Richman said.

The question would then be would medical experts choose to send patients to AdventHealth over Mission Hospital. With AdventHealth's modest size, the question would also be whether would it even have a true impact on business for Mission HCA.

Although Mission has recently faced a litany of bad press and investigations by Medicare inspectors for quality issues, the hospital has not been shut down and continues to operate and make money. Richman said even with a new hospital opening it’s not an automatic switch for medical professionals in the area to choose to refer to the new hospital on the block.

“The quality of care (at a hospital) is not the product of an individual physician. It relies on an ecosystem around that physician," Richman said. "Therefore, it will take a lot of work for insurers and payers and employers to really work with the new hospital to make it a viable option.”

Medical experts confirm Western North Carolina is largely made up of non-private paying patients, which means federally subsidized Medicare and Medicaid patients. The government sets fees for reimbursements, which are significantly lower most times than private-pay company-provided insurance carriers.

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Richman said another issue hampering a free market in North Carolina is the requirement hospitals apply for approval to build. They must get a certificate of need from the state.

“There’s a lot of evidence that suggests that states with certificate of need programs prevent entry of new facilities that otherwise would take place," Richman said.

It’s causing the delay for AdventHealth to build since Mission appealed the CON awarded to Advent in Weaverville.

“Unlike most other industries, hospitals in North Carolina require permission from the state in order to enter. If you’re a lemonade stand, you don’t need state permission to open up a new store, but you do if you’re a hospital," Richman said.

Richman said an open market would allow hospital companies and not-for-profits to decide if they wanted to build in a market and compete against a long-standing hospital like Mission. Mission, Advent and Pardee all applied for a certificate of need, which illustrates entities think there’s a business opportunity in expanding hospital operations in the mountains.