A baby dies in Virginia: the lethal consequences of a common, obscure hospital licensing law.

• Author: Boehm, Eric

DOCTOR JOHN HARDING was on call when the patient arrived. Twenty-four weeks pregnant, she was bleeding and in pain, suffering from a condition known as a placental abruption, where the placenta detaches from the inner walls of the uterus and triggers premature labor. It can be deadly for both mother and child.

As his colleague in the obstetrics unit at LewisGale Medical Center in Salem, Virginia, tended to the patent, Harding rushed to the phone. At Carilion Medical Center, six miles away near downtown Roanoke, there was a special treatment center for premature and ill infants. The other hospital had a special ambulance equipped with medical bassinets, and Harding knew the mother and baby needed that ambulance as quickly as possible.

"We've got a chance," he later recalled thinking.

But the special ambulance was not available. It was on another call, miles away on the opposite side of the service area, he was told. There was no way to get the critically ill newborn to the neonatal intensive care unit at Carilion.

"I had to go back in there and tell her, you know, it's not coming," Harding said, describing the incident a month later during a public hearing with officials from the state Department of Health.

With no emergency transportation available, Harding and his colleague Kevin Walsh called for whatever assistance they could muster. A pediatrician and anesthesiologist joined the two doctors and their nurses in the delivery room.

They saved the mother's life.

The baby didn't make it.

The infant, who died in February 2012, died not only because of medical complications but because the hospital where it had the misfortune to be born did not have the equipment necessary to give it a better chance at survival. The institution was not equipped to handle the difficult birth because the government of Virginia had refused to let it have high-tech neonatal care facilities, declaring that a high-tech nursery was not necessary.

This baby died, at least in part, because bureaucrats in Richmond--acting in accordance with the wishes of LewisGale's chief competitor and against the wishes of doctors, hospital administrators, public officials, and the people of Salem, Virginia--let it happen.

Like many states, Virginia has a Certificate of Public Need (COPN) law requiring hospitals and other medical providers to get special permission from the state government before they are allowed to offer new services, such as the specialty nursery that may have saved that child's life in 2012. These COPN licensing processes are supposed to balance the interests of hospitals with the needs of the public, but in reality they are fraught with politics and allow special interests to effectively veto unwanted competition.

In July 2010, two years before Harding made his frantic phone call, administrators from LewisGale Medical Center submitted an application to the state Department of Health seeking permission to build a small specialty care nursery service. It was denied. The state's refusal ensured that, sooner or later, some child would face an ugly fate.

II

LEWISGALE'S INITIAL APPLICATION for a COPN license called for a $3.4 million project that would have included an eight-bed neonatal specialty care unit, or NICU.

The hospital was growing, as was the surrounding community. Though it's the smaller half of the binary Roanoke-Salem metropolitan area, it's by no means insignificant. More than 24,000 people live in the city itself and more than 300,000 call the Salem area home, making it the fourth largest metro area in the state and the largest, by far, in the state's mostly rural, mountainous southwestern quadrant.

The number of babies born in the area had nearly doubled in just two years, LewisGale reported in its 2010 application to the state Department of Health. The hospital had expanded its obstetric staff accordingly, and now it was hoping to expand the services available to mothers and babies.

It had to win permission from the state first.

LewisGale Medical Center is the smaller of the two hospitals operating in the Roanoke-Salem area. Even though it's a 500-bed facility that's part of a larger regional hospital system, it competes with the 760-bed Carilion Roanoke Memorial Hospital--known locally as Carilion Clinic--that houses a 60-bed NICU, the third largest such facility in the state.

In its COPN application, LewisGale argued that "there is tremendous, on-going public need for NICU services." More than 2,300 residents of southwest Virginia signed petitions in support of the project. The Department of Health's review of the application noted that LewisGale's proposed NICU "enjoys an atypically broad array of informed, enthusiastic support from nearly 70 leading citizens, business leaders, and government leaders and officials who are not working in health care or otherwise stand to be professionally affected by approval of the project," including state lawmakers, a congressman, county officials, and the mayors of five towns in the area.

"We are talking about families, we are talking about babies who have great needs, we are talking about the need for bringing the mothers and babies together at a time when sometimes they are separated because of the need to go to a hospital with specialty-level care," said state Sen. John S. Edwards (D-Roanoke) during a public hearing on LewisGale's application.

Ninety-four people came to that hearing. The Department of Health noted, in an August 2011 report, that "no one who attended spoke in opposition, or otherwise indicated opposition to the project."

The only opposition came from A lice Ackerman, a professor of pediatrics at Virginia Tech's medical school--the Carilion School of Medicine, which has longstanding ties to Carilion hospital. In written testimony submitted to the Department of Health, Ackerman argued that the number of specialty bassinets at Carilion was sufficient to meet the needs of southwest Virginia. Approval of a small NICU at LewisGale, she wrote, "has the potential to erode the existing high level of neonatal care" because "small, low-volume NICUs are generally not in the best health interests of the community."

LewisGale was willing to spend the money to build and staff a new NICU. It had nearly unanimous support from the Roanoke-Salem community. Still, after months of consideration, the state Department of Health's Division of Certificate of Public Need sided with Ackerman and Carilion. Building a NICU at LewisGale, the bureaucrats concluded, "would foster institutional competition."

"Patients and obstetricians who may have been reluctant...