Once a year, a group of 22 appointed officials approves how many new acute-care hospital beds are needed in North Carolina.
The N.C. State Health Coordinating Council’s recent N.C. State Medical Facilities Plan, released Dec. 27, pegged the number at 1,042, compared with 407 in the same report issued a year earlier.
The 156% increase represents a larger allowance of new beds than in the previous five annual facilities plans combined.
The change has huge implications for N.C. hospitals, which fight vigorously to add new beds to hold or gain market share. Adding beds involves investments of hundreds of millions of dollars, mainly for hospitals operating in the Triangle and Charlotte metro areas, where most state growth is occurring. More beds mean more revenue and profit.
For example, WakeMed is investing $214 million in a 31-bed hospital in Garner that state officials approved in 2023. UNC Health Rex is asking the state for approval for a $400 million, 50-bed hospital in Wake Forest.
The facilities plan matters because North Carolina uses a “certificate of need” process that controls medical construction. That approach discourages excessive spending and costs, proponents say.
What caused the huge increase in the past year?
A Department of Health and Human Services spokesperson says the council historically used the growth rate in days of care offered by hospitals over the previous four years to determine the need for more beds.
But state regulators didn’t use that factor for the reports in 2022-24 because of the pandemic, believing it skewed hospital statistics.
Rather, they based their estimate on 2017-19 data, instead of 2020-22.
For this year’s report, they switched back to the old formula. That contributed to the massive increase, officials say.
Now, the state says Wake County needs 267 more beds by 2027, versus 70 in the previous report. The state’s most populous county has 1,464 licensed beds and 159 more in the pipeline.
Mecklenburg County needs 210 more beds by 2027, compared with a previous allotment of 89. Mecklenburg now has 2,194 beds and 591 that are planned or under construction.
Charlotte fast-growing suburbs are also primed for much hospital construction. Cabarrus has an allotment for 126 beds, versus 31 previously. Union County needs 136, versus 46 a year ago. Overall, there are 20,522 licensed beds in the state.
Whether the new report will lead to a significant uptick in construction isn’t clear. Officials of the N.C. Healthcare Association, which represents hospitals, declined to comment.
State hospital executives have historically favored Certificate of Need laws, contending they keep groups from siphoning off some of healthcare’s most lucrative services, leaving the rest for general-purpose hospitals.
Some lawmakers, including Senate Deputy President Pro Tem Ralph Hise, favor doing away with the CON process, saying they contribute to excessive healthcare costs. To date, they have not convinced a majority in the General Assembly. North Carolina’s hospitals are the biggest employers in many N.C. counties.
“North Carolina’s fortunate the economy’s been good, the population’s been growing, businesses [are] relocating here, and I think that’s part of what’s driving acute care beds, as far as the need for those,” says N.C. Rep. Denny Lambeth, who is a former hospital president in Winston-Salem.
Some growing markets are not approved for bed expansion. N.C. Rep. Tim Reeder says his experience as an emergency room physician at ECU Health in Greenville suggests Pitt County needs more beds. “We have no inpatient capacity on most days; our emergency department is holding admitted patients all the time,” he says.
But the plan doesn’t call for any new beds in Pitt County, tying it to three nearby counties, Greene, Hyde and Tyrrell, that have a shrinking population and no hospitals.
Here’s a list of members of the coordinating council, which oversees the facilities plan. The chair, Sandra Greene, is a health policy professor at UNC Chapel Hill.