CON not necessary anymore
Published 12:00 am Wednesday, January 9, 2008
The issue: The certificate of need used by the state to approve of medical facilities.
Our position: The law is outdated and stymies a free market.
Back in the 1970s, the federal government made states develop a certificate of need program that requires hospitals, nursing homes and other medical facilities to get approval of the state before they can operate. The federal government said that the approval was needed to control rising health care costs.
The costs, the government said, had spawned from cost-based reimbursement of doctors and hospitals for Medicare and Medicaid &8212; the old way the payments were made. Now the system has changed, and the federal government has said states don’t have to have to approve operation of medical facilities.
Still, there is some argument that by restricting the number of hospital beds or MRI machines or whatever, the costs will be kept down. If these things are overproduced, then that will drive health care costs up.
Actually, the arguments for a certificate of need doesn’t make a lot of sense.
Basically what the certificate of need has kept new people out of the marketplace by restricting them. After all, if I’m a physician and want to open a nursing home and there are beds in my community, then I might be prohibited by the state from opening up a new nursing home and competing with the other one.
It seems that the certificate of need is outdated and an anathema to a free market.
Consider this, patients have less choice in health care with the certificate of need, especially in more rural areas, such as the Black Belt.
Consider the development of outpatient centers that perform surgeries, known as ambulatory surgery centers. Most health insurance pays a higher percentage for outpatient surgery than for the same surgery performed by a hospital. However, under the current system in Alabama, the market isn’t open enough for people in an area such as ours to have a competitive alternative to a costly medical center.
Some people who support the certificate of need laws say they keep profits of the hospitals high and because the hospitals make money, they can afford to give services to indigent people.
Essentially, this practice is a repressive tax. If the government wants to tax, then do it properly and put a tax on the hospital bill that will designate money to a state indigents’ fund and vote out the certificate of need. At least the poor will be guaranteed something. There is no guarantee when hospitals start raking in profits that they will allow indigent care past the very minimal.
Alabama needs to repeal its certificate of need law.
It’s the best health care measure for all of us.