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In NC, Patient-centered health care means prying power from big hospitals

Americans for Prosperity North Carolina announced its 2014 legislative agenda on patient-centered health care reform, which includes promoting H177, a bill to reform Certificate of Need (CON) laws. The bill was introduced in 2013, and will be considered in the regular session 2014 (short session) beginning May 14.

From an AFP press release on Patient-centered health care reform through reform of the state’s Certificate of Need (CON) laws:

“Unlike Obamacare – which the General Assembly took steps to blunt the effects of – CON reform would bring market-driven, patient focused health care reform to North Carolina,” said John Dudley, North Carolina State Director for AFP. “It’s time for North Carolina to free up the health care market to create more competition, which will inevitably drive down costs.”

Dudley continued, “We will be working with grassroots activists statewide to help push CON reform in the short session. Our hope is that the Legislative Committee on Market Based Solutions and Elimination of Anti-Competitive Practices in Health Care will make a recommendation to the General Assembly to reform, if not entirely eliminate, our CON laws.”

In an interview with Donald Bryson, Deputy Director AFP NC, Watchdog Wire learned that “while most surgeries are outpatient surgeries, a lot of North Carolinians are paying hospital rates, instead of outpatient rates, because hospitals are the only facilities that have the CON to perform these surgeries.”

Bryson gives an example of how changing the laws to allow free standing clinics owned by doctors to increase in number would save patients a great deal of money. He writes, “in 2005, North Carolina gastroenterologists were exempt from the traditional CON assessments to perform colonoscopies. Total savings from this minor CON reform was over $255M in just six years.”

Of course, a major critic of changing the laws is the NC Hospital Association, which enjoys the benefit of a captive audience. North Carolina hospitals have tight control on outpatient clinics through the CON laws. According to David French, a consultant representing the North Carolina Orthopaedic Association, “nationally, there are 2.01 ambulatory surgery centers per 100,000 people compared to 1.17 in North Carolina[.]”

Moreover, Carolina Journal reports that overseer of the CON laws, the North Carolina State Health Coordinating Council, aids hospitals in keeping their power by supporting “high regulatory costs” for physicians to open their own clinics.

Existing hospitals most often have the resources and clout to obtain certificates of need, as they have the capacity to tolerate the high regulatory costs, long waiting times, paperwork, and, sometimes, lawsuits involved to navigate the CON process and build new facilities.

Further information: 

The title of H177:

An act to authorize the legislative research commission to study federal and state barriers to a market-based health care delivery system, to compare hospital-based operating room and ambulatory surgical centers as a venue for the provision of surgical services, to study North Carolina’s certificate of need program in comparison with other states, and to study other related certificate of need issues.

From the NC DHHS:

The North Carolina Certificate of Need (CON) law  prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services. Prior approval is also required for the initiation of certain medical services. The law restricts unnecessary increases in health care costs and limits unnecessary health services and facilities based on geographic, demographic and economic considerations.

From Carolina Journal: 

David French, a consultant representing the North Carolina Orthopaedic Association, said data compiled by staff at the legislative Research Division verifies state government saved money in both 2011 and 2012 when patients used ambulatory surgery centers.

The average cost per North Carolina Medicaid case at hospitals was $493 in 2012, but only $332 at ambulatory surgery centers, according to the data. The data further show the State Health Plan that insures government employees paid 63.54 percent more in 2012 than it would have paid at ambulatory surgery centers, French said.

The cumulative cost savings for Medicaid and the State Health Plan would range from $70 million to $147 million from 2014-20, depending on how many ambulatory surgery centers are added, French said. Those numbers do not take into account additional millions of dollars privately insured patients would save.

“Are we going to continue to perform cases at the highest-cost facility or encourage the shift to lower-cost facilities?” he asked committee members.



Categories: Healthcare, Legislation, Must Read, News, Policy, Regulation
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