HOUSE RESOLUTION 13

(By Delegates Storch, Delegate Hanshaw, Mr. Speaker, Anderson, Howell, Kessinger, and Summers)

[Introduced February 20, 2020]

Calling upon the Attorney General to investigate the business practices of Alecto.

Whereas West Virginia hospitals are critical to improve the health of citizens while providing a significant level of services and economic benefits to their communities;

Whereas, West Virginia hospitals also use their resources to reinvest in new models of care that go well beyond the traditional hospital walls, finding new ways to help improve the health of their communities from providing access to medical care for patients in rural areas to supporting cutting-edge medical research and innovations;

Whereas, Alecto Health Care Services (Alecto) purchased Ohio Valley Medical Center in 2017;

Whereas, When Alecto bought the hospital, it was part of a deliberate strategy to acquire facilities that were serving urgent needs to vulnerable populations. In a 2018 interview with Inside Healthcare magazine, Alecto founder Lex Reddy described the company’s modus operandi: “We often seek out communities that are underserved.” Alecto found “50 community-based hospitals that are critical to those communities and sustain them,” Reddy said. The hospitals serve “a lot of Medicaid and uninsured patients in its communities.”;

Whereas, While Alecto took the financial “risks,” the public was largely left to foot the bills. With Alecto’s purchase of OVMC, the city of Wheeling agreed to pay $1.5 million for capital repairs and provide another $1.5 million to demolish old buildings on the properties;

Whereas, Alecto abruptly closed the Ohio Valley Medical Center September 3, 2019, leaving its employees and community fragmented;

Whereas Alecto purchased Fairmont General Hospital in June 2014 for $15.3 million after this hospital went into bankruptcy with intentions of serving urgent needs to rural populations;

Whereas When Alecto demonstrated an interest in purchasing the assets of Fairmont General and taking over the operations of the hospital, it made a number of promises — and one of those was to continue with community-based health care in the Marion County region;

Whereas, Alecto projected the hospital’s bottom line will improve from a $733,032 deficit during the first six months of 2014 to an $8.2 million profit in 2017, according to certificate of need documents filed with the West Virginia Health Care Authority;

Whereas, Alecto abruptly announced the closure of Fairmont Regional Medical Center on February 18, 2020, when some 600 physicians, nurses and other personnel were greeted with letters saying the hospital would be closing in 60 days;

Whereas, Multiple solutions have been offered to assist Alecto which have fallen on deaf ears and cold hearts;

Whereas, the Attorney General serves as the chief legal officer for the State of West Virginia and speaks for the legal interests of the state.

Whereas, the Attorney General also is entrusted with enforcing the laws of the State as they related to consumer protection, unfair trade practices, civil rights, and other important areas.

Resolved by the House of Delegates:

That the House of Delegates calls upon the Attorney General to immediately investigate the business practices of Alecto and determine whether it has violated state laws.