Florida seeks to dump Certificate of Need – Maine should too
Governor Crist of Florida (R) recently proposed an extensive health reform plan, as noted in the Miami Herald. A key element of his plan is the repeal of Certificate of Need (CON), the process where state government must approve private investment and the expansion of health care services. CON is premised on the belief that central government planning can control health care costs.
Gov. Crist outlines several reasons for CON repeal:
· “This proposal reflects the goal of the Governor to increase competition and efficiency in the health care marketplace and provide Floridians with greater access to quality services. Removing the burdensome certificate of need process will foster a competitive business climate, spur economic development, and improve access and quality of care for Floridians.
· CON laws across the states have had over 30 years to demonstrate their ability to contain costs, lower prices, and provide greater quality and access to services. Fourteen other states have removed CON requirements since CON laws have failed to achieve reduced costs and greater quality of care.
· The CON process involves delays due to lawsuits by local competitors. Since the August 2005 CON batch cycle, 20 of the 27 CON applications are still in litigation.
· Costs related to the CON process can run as high as $1 million and each additional opponent can increase costs by 50 percent. These costs are passed on and paid for by all consumers.
· CON laws stifle competition and discourage current providers from offering new services.
· The proposed legislation removes current CON process for establishment of new acute care hospitals, and makes them subject to licensure.
· Ties licensure of new acute care hospitals to provision of charity care to Medicaid and underserved populations.
· Requires on-site emergency departments for these new hospitals, as emergency departments see the greatest portion of charity care.”
Maine has one of the most restrictive CON laws in the country. It is a failure. Central government planning does not work. Eastern Europe recognized this. The Federal Trade Commission and US Department of Justice have recognized this in recommending CON repeal. Now it is time for Maine to do the same.
Maine should follow Florida and 14 other states and repeal CON and allow the health care industry to innovate and make investments that they deem in the best interest of patients.