What’s the most interesting and consequential political fight in Georgia today? You’d have to try hard to beat the battle over certificate-of-need laws.
If that sounds dull, you should have been in the Department of Community Health’s board room Tuesday. Perhaps 200 people, including roughly half of the local lobbying industry, heard a series of hospital executives call one of their competitors a thief, while that competitor accused them of being liars.
Oh, the decorum of these goings-on prevented the actual words “thief” and “liar” from being used, but that’s what they meant. I’ll explain.
Certificate of need is a regulatory regime requiring private businesses to get state approval before opening a hospital or most any other medical facility. It is a mistake from the ’70s that, like many mistakes, originated in Washington, D.C.
Unlike many of Washington's mistakes, however, the feds soon reversed course and disowned CON. The Federal Trade Commission, under both parties, has criticized CON as anti-competitive .
Yet, Georgia is one of three dozen states to retain CON laws. Which brings us to the fight.
In 2008, the Legislature amended the CON law to provide for a 50-bed "destination cancer hospital." The goal was to accommodate a Georgia location for Cancer Treatment Centers of America, whose Southeastern Regional Medical Center opened three years ago in Newnan.
The new hospital had to get 65 percent of its patients from outside Georgia, accept Medicaid patients and provide indigent care. But CTCA no longer wants to be bound by that 65 percent cap or 50-bed limit and has asked DCH to create a rule allowing it to convert to a general hospital. Crucially, however, CTCA would not have to open an emergency room.
Other hospitals say this would allow CTCA to cherry-pick profitable, privately insured Georgia patients while they are stuck running loss-making ERs. Actually, they claim CTCA already fails to meet its Medicaid and indigent care obligations. (Thief!) CTCA in turn says the other hospitals are wrong about that. (Liars!)
If that’s as far as this fight went, it would be of limited interest and consequence. But it’s not.
For one, CTCA alone would benefit from this rule change. It smacks of giving CTCA an escape hatch from a deal it struck. But it could also set a precedent for future ad hoc rule-making to benefit politically favored companies.
If CON were the only anti-market aspect of health care, legislators could repeal it and fling open the doors to competition. Unfortunately, health care is so over-regulated that other bad laws would undermine any gains.
For example, one problem is Georgia’s high percentage of people who are uninsured or on Medicaid or Medicare. All three groups are money-losers for hospitals, which are closing in alarming numbers where these populations are most prevalent. That’s one reason Medicaid expansion is a false hope: The hospitals would merely lose less money. The plans sold on the HealthCare.gov exchange are little better from the hospitals' perspective, since these newly insured patients too often can’t pay their high deductibles.
So, yes, we need to get rid of, or at least radically change, our archaic CON laws. But we have to think much more broadly than that.
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