Monday, September 11, 2017

Do we need the Certificate of Need?

Is it time for Mississippi to abolish the Certificate of Need? The House Public Health and Human Services Committee will ask that question today.  Anna Wolfe reported in the Clarion-Ledger yesterday:

Health care providers looking to expand some services are required to receive a "certificate of need" from the state Department of Health.

The certificates ensure facilities and services are added to communities that can support them, but one lawmaker thinks the requirement gives large health systems an advantage.

"Basically a certificate of need is a monopoly certificate," said Rep. Robert Foster, R-Hernando. "It gives you a monopoly for a certain service."

The House Public Health and Human Services Committee will meet Monday to discuss the certificate of need process and possible changes.

Certificates of need became a federal requirement in 1974 for states to continue receiving certain federal health care dollars. The certificating process was intended to control costs and increase access, charity care and quality of care.

"By reviewing proposals for the location and scope of new health facilities or expansions of current facilities, the Certificate of Need process helps ensure that the quality of available care remains high while preserving health care access to as much of the state as possible," reads a recent newsletter from the Health Department.

The process requires an applicant to show the service 1) is needed 2) does not duplicate an existing service and 3) does not discourage access to care by a patient who cannot afford to pay for it. The argument has been that health care entities like hospitals like to locate in good-income areas because they make money and draw paying patients away from smaller hospitals that have no way to balance the care they offer Medicaid and Medicare recipients and the uninsured,.

Twelve years after it became a federal mandate, Congress repealed the certificate of need requirement. Since then, 15 states have eliminated their versions of the law.

Mississippi has certificate of need laws regulating 18 different service areas like dialysis, radiation therapy, mental health, rehabilitation and hospital and nursing home beds. Sixteen states regulate more services with certificates of need than Mississippi.

Foster wants the state to stop requiring physicians to get the certificate to perform procedures, buy new equipment or open outpatient surgery centers. A bill he wrote to accomplish this, HB 48, died in committee last legislative session.

The physicians in question, Foster noted, already have to be licensed.

"They should not have to get permission from the state to perform that service they have a license for," Foster said. "The problem is they cannot get a CON to do what they're trained to do. They can't open their own private practice. They have no option but to work for one of the corporate medical companies in our state."

During the certificate application process, other providers, including large corporations, have the opportunity to challenge the justification for the additional service....

"The big corporate health care providers will argue at CON hearings, 'If you allow this small clinic to do these services or buy these machines, it's going to affect our profit so much that it will bankrupt our hospital and we'll close and then you won't have a hospital,'" Foster said.

Foster said the process can get expensive for the applicant to make its case against the challenger.

"They should not have to go fight a legal battle with a major corporation just to buy an updated or new type of machine," Foster said. "We need more health care and need the cost to go down, and the only way to do that is to have competition."...

Of course, the Mississippi Hospital Association had something to say about such changes:

Considering attempts in the last six months to repeal the Affordable Care Act, eliminating certificates of need could create "additional instability in the market," said Richard Roberson, vice president of policy and state advocacy for the Mississippi Hospital Association, "which is a huge concern for hospitals and other providers as well."

The Mercatus Center at George Mason University, a think-tank focused on free-market research, estimates based on national data that eliminating certificate of need requirements could reduce health care spending in Mississippi by $208 per patient per year.

The data is tempered by the fact that in Mississippi, just 5 percent of certificate of need applications are denied, whereas other states have much higher denial rates. Rest of article.
Let's see.  Mississippi is dead last in health care.  Mississippi doctors are the seventh-highest paid in the country.  The Certificate of Need process almost guarantees a monopoly for those who already possess the precious certificate.  Sort of similar to Mexico.  Carlos Slim has had a virtual monopoly on cellphone service in Mexico.  Guess which country has the worst cellphone service in the Western hemisphere despite Mr. Slim being one of the richest men in the world?  AT&T has started to enter the Mexican market and prices have declined where it has been able to compete with Mr. Slim. 

The Mississippi Hospital Association makes the same arguments every monopolist has made throughout history.  Monopolists hate competition.  They love stability.  The very idea of competition is based on instability.  There is no medical or economic reason for Mississippi to require certificates of need despite.  However, this is Mississippi where one must pay to play and the hospitals pay very well at the trough where the legislators and lobbyists feed.

25 comments:

Anonymous said...

Time for them to go...NOW!

Anonymous said...

how about we put a certificate of need on lawyers? if it's good enough for hospitals, should be good enough for lawyers that write these laws, eh?

Anonymous said...

We need to rethink a few things.
Our doctors are the seventh highest paid in the U.S. and health care is last in the U.S.
The head of education in Mississippi is the highest paid in the U.S. and we are 49th in the U.S. for education.
Anything else we are paying the highest in the U.S. and receiving the least?

Anonymous said...

Be prepared for the consequences.

It's not that CONs are "good" or "bad."

We've developed a system based on CONs whether you like it or not.

The law of unintended consequences will play havok for those involved.

Think about a doctor in Jackson opening a dialysis unit with a lawn mower and a dishwasher.

The CON provides an additional layer of protection for the would be patient.

But...make it like uber.....and watch the fireworks!

Anonymous said...

I have been against the CON process, and similar regulatory laws, for years if not decades. But this article kinda kills the argument that you are making, Fish, that the CON is increasing the cost of healthcare when it points out that only 5% of CONs are denied. Evidently the CON just provides power to the regulators, but doesn't really do much about restricting healthcare opportunities.

Anonymous said...

11:33am voted best post of the decade

Anonymous said...

well, it's not that simple. which doctors are the highest paid? pediatricians? or heart surgeons? what areas have the worst health? madison? or edwards? if you can find a quality physician that will live and work in an impoverished area you are probably going to have to pay him or her well. and as soon as hospital systems start building new hospitals "where the money is" you will see a decline in the healthcare in the hospitals that stay put. look at CMMC (or Merit Central i think it's called). 20 years ago it was a top notch hospital. then big business took it over and instead of investing in CMMC's future they dumped their monies elsewhere. now the only people who go there are those that don't have a choice. though some may not like it... the system has protected many regular persons.

Anonymous said...

i recommend a certificate of need for legislators. if we reduce the number by one-half, then we will have eliminated one-half of the half-ass, do-nothing approach going on at the capitol.

Anonymous said...

Hospitals should only be exempt if they are FULL participants in the trauma system.... having two of the biggest Jackson hospitals buy their way out of this is ludicrous

Anonymous said...

I am no fan of the Hospital Assn. nor government intervention into private business. However, I think that we are well-served to require CONs for hospitals and surgical centers. IF they eliminate the requirement, I hope to be proven wrong. But, I fear that we will end up with multiple adequate (or worse) facilities instead access to technologically advanced health care.

You'l either see facilities go bankrupt in pissing contests over new equipment (without enough market to pay the debt) or you'll see facilities cut corners and cut costs - preventing necessary quality upgrades. In the end, consumers (i.e. patients) will be stuck with increasing costs and/or lesser quality of care.

That said, I see no need for CONs for nursing homes, day facilities, etc...

Anonymous said...

Wow, get rid of CON's? Is it that Tate knows it's over and Jim Hood is the next Guv? This fact might prove useful. Maybe R legislator's may start acting like, well, R's.

Anonymous said...

Basic economics need to be taught in every school.

Think about a doctor in Jackson opening a dialysis unit with a lawn mower and a dishwasher. Because nothing says insuring your business continues like providing a substandard product, not to mention dangerous, fraudulent product. Not like the legions of lawyers here wouldn't sue that Doctor out of business.

You'l either see facilities go bankrupt in pissing contests over new equipment (without enough market to pay the debt) or you'll see facilities cut corners and cut costs Feature, not bug. Lesser product gets taken off of the market. Better products can come in and buy top of the line equipment out of bankruptcy. You think every restaurant you go to buys equipment new?

preventing necessary quality upgrades. In the end, consumers (i.e. patients) will be stuck with increasing costs and/or lesser quality of care. My grocery store just called and would like for you to come take a tour. Lesser quality and increasing costs are caused by government quasi-monopolies, not prevented by them. AT&T/Bell is what we have now. We can have a bunch of cell phone companies fighting for our business.

All of healthcare needs to become free market. The market manages to deliver television sets and cellular phones into damn near every home in this country, yet we shrug trying to figure out how to do it with most of health care.

Anonymous said...

Health care is not cell phones, nor is it cans of beans.

Name one time that unregulated expansion of a CON-regulated medical service led to DECREASED COSTS (e.g., MRI scanners). No one puts them in areas that are currently underserved, because the potential revenue is not there (that's why those areas are underserved in the first place). These arguments have gone on for decades but no one has ever shown that eliminating CONs leads to lower prices for consumers/patients for the same quality of service.

Anonymous said...

Isn't this what the cabbies want?

Anonymous said...

CON is a Nothing Burger.

bill said...

Those of you who believe the CON needs to remain in place for hospitals and surgery centers may not realize there's already a pretty substantial barrier to entry for those types of facilities - money. Do you think that Buster Bailey and Andrew Mattiace are going to start building hospitals to go with their shopping centers? Let the market work.

Anonymous said...

Name one time that unregulated expansion of a CON-regulated medical service led to DECREASED COSTS Got me there, Skippy. Incredibly well worded question. A) Can't. You guys won't deregulate. Are prices controlled by the services being regulated by CON, or by the bargaining power of Insurance and Government Program's market share? And if the potential revenue is not there, why would the greedy business try to place the MRI scanners in the underserved area? They certainly don't need some government drone making that determination for them. You're seriously arguing for the same geniuses that bring you public education to bring you health care?

Since it's question time...why are Lasik and Breast Augmentation getting cheaper? They ostensibly fall under health care. Yet one can finance either, and shop around before the procedure and choose the cheapest outcome with the best customer reviews. I mean, actually looking at the take home prices. Clearly they're not stacking bodies like cord wood or the lawyers would have sued them out of business. I don't suppose that it has anything to do with insurance and government health insurance covering neither? Oddly, if health insurance and government health insurance don't want to cover it, there isn't an army of cheap suits beating down their doors trying to regulate it. And good luck pricing a medical procedure other than that under our current system.

Health care is neither cell phones nor cans of beans. Cell phones and beans are delivered by companies trying to make a profit. They only do so by delivering the best product possible for the cheapest price possible.

I'll write you a million dollar check, you have 24 hours to cash it. You want it FedEx or USPS?


Anonymous said...

This could be bad timing. Didn't Baptist in Madison just sell all it's available land to Primos and a hotel developer?

Anonymous said...

A Certificate of Need is what keeps some paying patients of the hospital. I have Blue Cross Blue Shield and during a gastric bleed incident last year I had to spend my entire hospital stay in the Intensive Care Unit at Baptist Hospital because all other beds were full. My father (also with BCBS) had to spend several hours in the ER waiting room because of full beds at St. Dominics. The CON may be helpful in some ways but it even knocks out paying customers when not enough beds are available.

Anonymous said...

they had beds... just not staff to run things. it's common practice for all hospitals to staff lower than the actual number of beds they have.

Anonymous said...

I guess there aren't enough people alive who remember when medicine and law weren't businesses.
An orthopedic surgeon, if you were in a wreck and injured your shoulder and your knee could fix both and your GP could put a cast on your arm for a simple break. You didn't need a referral to a specialist for ordinary medical issues that every doctor learns in med school and internship. And, every community had doctors who treated as needed and were very well to do in the community.
If we had used professional models we'd have three large hospitals but in each region of MS, not all in Jackson.
The focus would be on delivery of health care and how to do that most efficiently to the largest number of humans.
What is actually the greatest loss is that too many doctors seem unable to see the patient as a whole body. They will treat a symptom and miss that the patient needs treatment outside his specialty or not recognize when a specialty is needed. Worse they don't communicate with the other doctors that any of their patient sees in a way that gives them the " big picture".
Once upon a time, I worked in a hospital and doctors did actually know their patients and wanted to know everything about how their patient was functioning. They even talked to pharmacists.
It's that all the things that were professions...medicine, law, journalism, government, and religion...are now run as businesses. As a result, we as a society know the cost of everything and the value of nothing.

Anonymous said...

Flood warning- the sisters and their henchmen are now drooling over the possibility of getting into shining time station....

John Dough said...

Since when is it the state's business to determine if/when/where a private enterprise can start up, compliant with all zoning and business laws? Do we have state-mandated CONs for grocery stores, Walmarts, shopping centers, skating rinks or whatever? Do we tell Shell they can't build a gas station at an intersection where there is already a BP, a Chevron, and a Fast Fill? Nope.

CONs, or at least the concept, makes good sense to me when, and only when, talking about state-supported facilities such as UMMC, Whitfield, etc., because they shouldn't be wasting our tax money on unneeded facilities. But if Baptist or St. D. or whoever else wants to build an "unnecessary" facility on State Street with their own money, how is that the state's business?

Even if the state already has a facility there and the new private facility would compete with it, that's just bad timing and bad luck for the state; it's no justification to prohibit the private business from doing private business.

Anonymous said...

Having worked for years in healthcare administration, including inpatient hospital experience, I can tell you that the large systems in the state (Baptist, St. D, North MS, Forrest General, Rush, etc.) will fight this tooth and nail to keep their oligarchies intact. Introducing competition by eliminating the CON is just what healthcare in MS needs. Just read the Hospital Association's reaction to tell you all you need to know.

Anonymous said...

What about Blue Cross? How can an insurance company increase premiums by 50%, increase deductibles by 1000% and then decrease by 50% what they will pay providers for services? People who have BCBS are paying out of pocket for quality that was covered last year under their expensive plans! How can this go unchecked? Who regulates these monopolies?

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