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Wednesday, 25th May 2011

Health Care Certificate-of-Need (CON) Laws: Policy or Politics?

Source: National Institute for Health Care Reform

From the news release:

Originally intended to ensure access to care, maintain or improve quality, and control capital expenditures on health care services and facilities, the certificate-of-need (CON) process has evolved into an arena where providers often battle for service-line dominance and market share, according to a new study conducted by the Center for Studying Health System Change (HSC) for the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR).

Over time, the state health planning activities that initially guided CON regulations have diminished considerably, but CON laws remain in 36 states and the District of Columbia, according to the study, which focused on CON requirements in six states—Connecticut, Georgia, Illinois, Michigan, South Carolina and Washington.

In five of the six states studied—all except Michigan—the CON approval process can be highly subjective and tends to be influenced heavily by political relationships, such as a provider’s clout, organizational size, or overall wealth and resources, rather than policy objectives, according to many respondents in the six states interviewed for the study.

Michigan respondents cited several elements of the state’s CON apparatus that contribute to greater objectivity and transparency. The state divides responsibility for setting CON review standards and the actual review of CON applications between an appointed commission and the state Department of Community Health, respectively. Michigan also is the only state studied with a formal advisory role for industry stakeholders, employers, consumers and other interested parties through a CON standards advisory committee and a new medical technology advisory committee.

Other key findings include:

  • CON Agency Experiences. Given the competitive stakes providers have in the process, CON authorities face intense scrutiny. Applications can be challenged at various stages, and decisions can be overturned by hearing officers, administrative courts or sometimes state legislatures. The basic function of CON boards and related state agencies is to process and review CON applications, but many reported being caught in the competitive crossfire between providers during appeals, public hearings and legislative battles.
  • Hospital Experiences. Hospitals typically view CON regulations opportunistically. Hospitals use the process to protect existing market share—either geographic or by service line—and block competitors, but they find the CON process onerous if they are attempting to enter a market. Certificate-of-need approval from the hospital perspective is usually viewed as a license to claim ownership of a service line or geographic area.
  • Physician Experiences.Most physicians interested in establishing for-profit facilities viewed CON programs as overly restrictive and supported repeal of the regulations entirely. Physician respondents frequently cited the CON process as the primary barrier to market entry, either from the state itself or because of opposition from other providers. Reflecting physician views, medical societies in the six states studied all support repeal of CON regulations.

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An Info Pro, librarian, entrepreneur, author, worldwide connector and book-lover, Heather Negley is recognized for her new ways of thinking about librarianship, research, social media and creativity. Heather is the founder of HelpALibrarian.com and Zing Information Services. She has most recently been an Information Research Specialist with the Congressional Research Service at the Library of Congress where she provided business research for members of Congress and their staffs. Heather also worked as a research reporter for U.S. News and World Report and as a technical advertising producer on the washingtonpost.com. She received her MS in Library and Information Science from Simmons College in Boston, MA.

Heather can be reached at heather.negley@freepint.com

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