Certificates of Need (CON)
Friday, May 9, 2008More CON jobsKeeping supply away from demand By Joseph D. ColettiCategories: Certificates of Need (CON), North CarolinaState officials in North Carolina rejected applications for certificates of need (CONs) this week from two regional hospitals to build satellite facilities in rapidly growing areas in Wake County (around Raleigh & Cary). The regulators doubted the demand projections from the hospitals. So people in these areas will continue traveling 20 minutes or more one-way to reach urgent care facilities. H/T - Jon Sanders
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Tuesday, May 6, 2008Florida Frees up Hospital Market, at Least a LittleCON artists will have to fight a bit harder By John R. GrahamCategories: Certificates of Need (CON), FloridaOne of the dopiest rules that states impose on competition in health care is Certificate of Need (CON) laws for hospitals. Basically, CON allows entrenched hospitals to use political power to prevent new ones from opening up, in a futle attempt to contain costs. Roy Cordato of the John Locke Foundation wrote about this in a book that I edited in 2006. Also, the burden of CON regulation is an (inverse) measurement of the state of hospital competition in the U.S. Index of Health Ownership, for which I used research from the Washington Policy Center. As you can see Florida ranks in the middle of the pack, but a handful of states have no CON at all! Governor Crist has promised to sign a bill that will impose a greater bureaucratic burden on an incumbent hospital that wants to stall a potential competitor by using CON. Even better, the incumbent will have to pay up to a million dollars if it loses its challenge. ("Loser pays" is a principle that the U.S. needs to adopt more widely, to avoid time-wasting obstacles to innovation.) Sure, a milion dollars is nothing for most American hospitals, and this law does not abolish CON. Still, "let not the perfect be the enemy of the good." It will have some effect at the margin. Alongside the insurance reform noted today by Marc Kilmer, that's two cheers (albeit small ones) for Florida's health care.
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Monday, April 21, 2008When Legislators Decide Business Success ...... businesses will give money to legislators By John LaPlanteCategories: Certificates of Need (CON), GeorgiaThe Atlanta Journal-Constitution finds that health care interests shower money on Georgia legislators: "In the final days before the start of the 2008 legislative session, a health care company lobbying for a law to help it get into the Georgia market doled out $41,000 in campaign contributions to more than 50 lawmakers and top state officials." How can this be? The AJC itself holds the answer: "The state spends billions of dollars a year providing health care to Georgians, and many companies have a big stake in the state budget." Cancer Treatment Centers of America, which stands to benefit from a new Certificate of Need law that would open up the state to its business, was not alone in giving money to legislators. In fact, it appears that the company was outspent by hospitals that wished to keep it out of the state: "The strongest opposition came from the Georgia Alliance of Community Hospitals, a powerful group representing nonprofit hospitals across the state. The group, which objected to the cancer hospital and other proposed changes to the state's health care regulatory system, gave almost $60,000 to more than 70 lawmakers in December, the month before the session."
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Tuesday, March 25, 2008Certificate of Repeal - Long Overdue to be RepealedBy Michael CiamarraCategories: Certificates of Need (CON)The word about certificate-of-need laws is getting out, as evidenced by the following news clipping. --- Group seeks CON repeal Policy Institute says rules keep health care prices high Sunday, February 17, 2008 ANNA VELASCO News staff writer Michael Ciamarra knows the Alabama Policy Institute's mission to repeal the state's Certificate of Need law faces staunch and powerful opposition. No matter. The nonprofit think tank he works for plans a campaign to abolish what it considers an outdated bureaucracy that unwisely stifles health care competition. This past week, the institute sent state lawmakers a recent report it sponsored calling for abolishing state Certificate of Need laws, which regulate construction and expansion of services at hospitals and nursing homes. The group plans to begin meeting with editorial boards at newspapers around Alabama this spring. Click here to read entire the article or go to http://www.al.com/birminghamnews/stories/index.ssf?/base/business/1203239733117900.xml&coll=2
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Monday, March 24, 2008A Strange Way to Help Patients: California Nurses Association Strikes Again!By John R. GrahamCategories: California, Certificates of Need (CON)I suppose if I were a patient at one of Sutter Health's ten hospitals in Northern California, now at the mid-point of a ten-day long nursing strike, I might find some cold comfort in the California Nurses Association's claim that this walk-out by 4,000 RNs is a "dramatic stand for improved patient care", as the union claims. Fortunately, as a health(y) policy wonk, I have time to look at all sides of the issue. Readers of my analysis of the Schwarzenegger-Nuñez Health Care Deforminator, Model ABX1 1, know that I am no fan of the hospitals' public policies. Nevertheless, Sutter Health's response to the strike is convincing, claiming that the CNA's real goal is to eliminate Sutter's unique contracting approach. Sutter claims that the CNA generally succeeds in negotiating one contract for an entire hospital system in the state, but each Sutter hospital negotiates its own contract. The CNA always wants more centralization. The CNA is a remarkable organization - and I don't mean that in a good way. I have not been around long enough to sketch its descent from a professional association to hard-core union, but the fall has resulted in a group that does not get along well with anybody: not the hospitals, not the health plans, and not even other unions - such as the (hardly less bolshie) Service Employees International Union (SEIU). When not striking, the CNA occupies itself by scraping up health care horror stories and videoing the "victims" of U.S. health care. It also invests a curiously large fraction of its massive lobbying power in bills that mandate hospitals invest more in acquiring patient-lifting equipment and train the staff in the use thereof. (The CNA argues that without such mandates, nurses and patients are both more prone to injury. Well, ok, but does the CNA really think hospitals aren't concerned with not dropping patients on the floor, in today's litigious environment? Actually, if the CNA is such a great union, why can't it negotiate such investment and training as part of its contracts, instead of relying on state power? Hmmm.) Oh, and let's not forget that the CNA is behind state senator Sheila Kuehl's horrific SB-840, a bill worse than ABX1 1, which would impose government-monopoly health care in California. And that would serve the CNA's interest just fine. Sutter Health reminds us that the CNA cannot stand seeing nurses outside its control. Today, the CNA is striking at ten Sutter hospitals, but there are other hospitals that are not suffering strikes - some organized by the CNA, some organized by other unions, and some where nurses are free to ply their profession free of union power. Imagine the CNA's power if California's hospitals were all directly financed and controlled by the state, and all hospital nurses worked under one contract - and one union master! Such would be the case under SB-840, as it actually the case in Canadian provinces. That explains why Canadian nursing unions are the number one (and amongst the few remaining) defenders of government-monopoly health care in Canada. (See, for example, the advocacy website of my home provinces's British Columbia Nurses' Union.)
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Thursday, March 6, 2008Certificate of Need Reform in KentuckyBy John LaPlanteCategories: Certificates of Need (CON), KentuckyThe Bluegrass Institute for Public Policy Solutions notes a promising development in Kentucky: legislation to roll back the commonwealth's certificate of need law. David Adams says that the rollback is only a "narrow" one, but adds that even a small reform is good. "If," he says, "we can see the wisdom in allowing the market to dictate the supply of medical services and discard -- if only in very limited cases -- the dumb idea that restricting growth of services keeps prices low, we may be on the road to repealing the entire nonsensical Certificate of Need program.
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Monday, February 18, 2008End the CON Laws of AlabamaBy John LaPlanteCategories: Alabama, Certificates of Need (CON)A new publication from the Alabama Policy Institute argues that restrictions on the construction of hospitals, nursing homes and other medical facilities must be repealed. Certificate of Need Laws: Why It's Time for a Repeal (PDF). While Certificate of Need (CON) laws were "repealed as a national policy during the Reagan administration – 20 year ago" – they are still in place in Alabama. In his introduction to the report by Roy Cardato, Michael Morrisey observes four points:
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Monday, February 11, 2008What Happens In Vegas, Stays In VegasUnless It Doesn't Happen At All: Notes on the UnitedHealth/Sierra Merger By John R. GrahamCategories: Certificates of Need (CON), Insurance RegulationEven at the glacial pace of take-over activities in the post-credit meltdown deal economy, merger arbitrageurs speculating on the UnitedHealth-Sierra Health Services spread might be forgiven for dozing off at their trading terminals. Almost a year ago, on March 12, UnitedHealth Group (headquartered in Minneapolis), announced a friendly take-over of Nevada's Sierra Health Services. The Nevada Insurance Commissioner green-lighted the deal, but it's been downhill since then. Lately, UnitedHealth's regulatory troubles in California (which I think are overblown) have emboldened the opponents of consolidation, who include the usual suspects: providers and left-wing politicians. But the chorus of critics also includes Consumer for Health Care Choices, of which I am a dues-paying member, and which is a outstanding advocate for consumer-directed health care. On the other hand,some of my fellow members of CHCChoices were a little leery of advocating in favor of the federal government intervening to prevent the merger. Now that the unfortunate deal has staggered back into the headlines, I find myself on the side of those who advocate federal non-interference in the take-over. Why?
So, there you have it: Occam's razor for libertarians -when in doubt, let the states decide!
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Monday, February 4, 2008Another CON Bites the Dust?Florida Governor Crist Makes the Right Call on Hospital Cartels By John R. GrahamCategories: Certificates of Need (CON), FloridaIn some late-breaking news, Florida Governor Charlie Crist has proposed repealing the state’s certificate-of-need (CON) law for acute-care hospitals to “increase competition and efficiency in the healthcare marketplace,” according to a plan included in the governor’s fiscal 2009 budget. The proposal suggests licensing as an alternative to Florida’s CON law, but provides few details. Sounds good to me: CON laws do nothing to reduce the cost of health care, and have a host of negative, unintended consequences,as described in a chapter by Roy Cordato in a recent book I edited. Truth be told, if I were advising Florida, CON is not the problem I'd put at the top of my list of anti-competitive barriers to good health care that the state had erected. Florida suffers from CON, but other states have it worse. Although many states are fortunate enough to be completely free of CON, of those that do still carry the burden, Florida is pretty much in the middle of the pack, according to the Index of Health Ownership, with Connecticut at the bottom of the barrel. Florida's bigger priorities, according to the Index, are the burden of mandates and regulation on private health insurance, nurse practitioner prescribing autonomy, and improving its medical-malpractice loss ratio. Nevertheless, we congratulate the governor for taking an important step to increase his citizens' health freedom. Let's hope the legislature takes it up with enthusiasm.
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Friday, October 12, 2007A Move Towards Free Enterprise in GeorgiaBy John LaPlanteCategories: Certificates of Need (CON)While access to and affordability of health care is a major political and policy concern, state governments still have rules that work against both affordability and access. In Georgia, one such rule is getting a little bit weaker. Certificate of Need (CON) laws harm consumers (that is, patients) by constricting the supply of medical facilities. Essentially, a government agency decides whether a given geographic area "needs" a new clinic, hospital, or other health care facility. (Why no CON laws for grocery stores? Certainly food is as essential to life, if not more so, than many medical treatments.) In Georgia, the Department of Community Health is proposing a rule that would break open the CON game, just a bit. The Augusta Chronicle (registration required) explains:
Good. A better move would be abolishing CON requirements altogether, but this is a start.
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