Hospitals support Crist's latest CON proposal
The process would be streamlined, rather than eliminated. Orlando Business Journal
April 25, 2008 — Gov. Charlie Crist and Florida hospitals have reached a compromise: a proposed state law aimed at fixing, rather than eliminating, the cumbersome approval process for new hospitals.
"This bill will help eliminate frivolous lawsuits and delays," says Bill Ellis, vice president of government and industry relations for Health First. "Health First hopes to see it approved."
Established in 1972, the current process requires companies wanting to build a new hospital to first seek the OK from the state Agency for Health Care Administration in the form of a certificate of need. The purpose is to prevent costly duplication of services by first determining if the community needs a facility before it's built.
However, once a firm wins a certificate of need, rival firms typically file appeals, which tie up planned projects for years, to the tune of hundreds of thousands of dollars in legal fees.
As a result, Gov. Crist previously proposed completely eliminating the certificate of need process for new hospitals -- a move that had existing hospitals in an uproar.
Hospital administrators said doing so would allow investor-funded hospitals to be built and then "cherry-pick" healthier, insured patients, leaving nonprofit hospitals stuck with sicker, uninsured patients.
In order to avoid that scenario, the hospital association worked with the governor's office to craft a solution. The focus of this proposed law is to de-incentivize appeals that are designed to delay the inevitable, says Ralph Glatfelter, senior vice president of the Florida Hospital Association, a Tallahassee-based group that represents 170 hospitals.
Senate Bill 2326, sponsored by Sen. Durell Peaden Jr., R-Crestview, aims to do that by requiring:
Hospitals wishing to appeal an approved certificate of need for a new hospital to first provide written objections to the state within 21 days after the certificate of need application is filed.
This would allow the state to hear objections before deciding if a firm can build a new hospital, and, thus, "it allows them to make a much more informed decision," says Rich Morrison, vice president of government relations for the nonprofit Florida Hospital, which has seven hospital campuses with a total of 2,004 beds in Central Florida.
A hospital that loses its appeal at the district court level to pay the appellee's legal fees and costs, up to $1 million.
This would deter rival firms from needlessly dragging out an appeal they know they ultimately will lose, say industry experts.
That administrative hearings for appeals be held within six months after a judge has been assigned to the case, which makes it tougher to get a continuance.
The bill also says the issues raised in the appeal cannot deviate from the issues raised in the written opposition filed during the application process, says Glatfelter.
Tim Cook, CEO of the 235-bed, for-profit Osceola Regional Medical Center in Kissimmee, supports the proposed law: "I think it would diminish the nuisance appeals."
Cook is familiar with all aspects of certificate of need appeals. Last Dec. 14, the state approved a request by his facility, owned by Nashville, Tenn.-based HCA Inc., to build a new hospital in Poinciana. However Health Management Associates Inc. (NYSE: HMA), a Naples-based rival health care firm with nearby hospitals in St. Cloud and Haines City, appealed the state's approval in January 2008. A hearing is set for June.
Of course, streamlining the process won't eradicate all appeals, says Ann Barnhart, senior vice president of operations for HMA. "I believe the concept is fair, and you will see hospitals who firmly believe they will prevail in their appeal continue the appeal process after final order is given."
Bill streamlines hospital process Associated Press Newswires
April 17, 2008 — New hospitals could more quickly get approval to open under a bill passed unanimously by the Senate.
The measure streamlines the regulation process and shortens the time in which opponents of the proposed hospital can fight it.
The bill (SB 2326) was a compromise with Gov. Charlie Crist and others who were seeking more deregulation of the system for approving new hospitals.
Opponents of a more thorough deregulation said the approval process is needed to avoid a proliferation of specialty hospitals that don't do enough to treat the poor, or may not have the ability to deal with emergencies.
Under the bill, long court delays would be prohibited and regulators would look at fewer criteria when deciding whether to approve a new hospital.
The bill now goes to the House, which so far hasn't considered the proposal.
The day in Tallahassee: Hospital Deregulation Associated Press Newswires
April 2, 2008 — The process for approving new hospitals would be streamlined, with fewer criteria for deciding when a new facility is needed and a speedier timeline for making the decision, under a bill approved by a Senate committee.
The bill unanimously approved by the Senate Health and Human Services Appropriations Committee on Wednesday is a compromise. Gov. Charlie Crist and others had wanted to eliminate the "certificate of need" process by which new hospitals are approved. Opponents, however, said the careful approval process is needed to avoid a proliferation of specialty hospitals that don't do enough to treat the poor.
Backers of opening up the process say opponents tie up new facilities in lengthy administrative hearings and request delays for collecting information that often go on for months.
Under the compromise bill (SB 2326), delays of longer than four months would be prohibited and regulators would look at fewer criteria when deciding whether to approve a new hospital. The bill still has two more Senate committee stops.
The House hasn't considered the compromise deregulation proposal.
Hospital Planning Process Under Fire South Florida Sun-Sentinel
Broward Metro
March 28, 2008 — The frustration is understandable and reforms to the state's hospital planning process are needed. But Gov. Charlie Crist would be wise to back off calling for eliminating the current program, a proposal that's pretty much stalled in the Legislature anyway.
State rules require proposed hospitals and medical centers to garner a certificate of need before they can build new facilities. The process is valuable in that it keeps Florida from being overrun with hospital beds. It also regulates who can start a medical center.
The Florida Hospital Association and the Safety Net Hospital Alliance of Florida make strong arguments that the CON procedure is needed. Both are right to worry, as are state residents, that eliminating this necessary regulation could lead to a proliferation of limited service hospitals that wouldn't be in the public's interest.
In fact, a state Office of Inspector General Report issued in January found a series of shortcomings in some physician-owned hospitals. Those included their limited use of nurses on duty and physicians on call, as well their reliance on dialing 9-1-1 to obtain medical assistance necessary to stabilize patients.
That said, the current certificate of need program has its own, significant warts that need correction.
One aspect of the process that must be addressed is the appellate process used to second-guess AHCA's decisions. Recent history has examples of needed medical facilities that have been stalled because hospitals sought to stop necessary facilities.
A case in point is Bethesda Memorial Hospital's plans for an 80-bed satellite facility west of Boynton Beach. The facility is needed, and state regulators have on two occasions given Bethesda a green light. Yet rival hospitals have been able to stop the project by filing challenges in state courts.
The appellate process is important, but it needs streamlining so it doesn't obstruct or unnecessarily impede a hospital from growing in area that needs better medical facilities and care. That's what the governor and the Legislature should focus on - fixing the process, rather than getting rid of an important oversight program.
Medicare and Medicaid; Hospital Leaders Urge Legislators Not to Further Destabilize Florida's Healthcare Landscape Health & Medicine Week
March 24, 2008 — Florida’s hospital leaders today urged state legislators to reject a proposal to eliminate the state's planning process for new hospitals, warning it would further destabilize a healthcare system already bracing for huge cuts in funding to care for the elderly and poor, and already grappling with serious shortages of doctors and health workers (see also Medicare and Medicaid).
Eliminating health planning for new hospitals would lead to an explosion of small, "limited service" hospitals and a two-tiered hospital system in the state -- one for the poor and uninsured and the other for healthier patients with private insurance -- hospital leaders said.
"Florida's hospitals cannot afford legislative action that will further destabilize our healthcare landscape," said Timothy Goldfarb, CEO of Shands HealthCare in Gainesville and board chair of the Florida Hospital Association (FHA). "We don't need more hospitals in Florida -- what Floridians need are more doctors -- particularly specialists -- more nurses, more healthcare workers, and less uninsured."
Goldfarb's remarks were made at a state capitol press conference jointly hosted by FHA and the Safety Net Hospital Alliance of Florida (SNHAF).
Florida's hospitals are already facing enormous demographic and social challenges. The state has the highest percentage of residents over ages 65 and 85 in the nation -- groups that consume the most healthcare resources. One in four residents under age 65 has no health insurance and routinely uses the emergency room for basic care. This has contributed to a steady rise in uncompensated care provided by hospitals -- in 2006, it hit $2.4 billion.
Against this backdrop and an economic slowdown, Florida hospitals are also facing enormous federal and state reimbursement cuts. President Bush is proposing $458 million in Medicare cuts in 2009 to Florida's hospitals -- and $5 billion in cuts over five years. Last fall, the Florida Legislature cut hospital Medicaid reimbursements by $132 million. This spring, the Legislature is making additional Medicaid cuts and the state's Low Income Pool -- a crucial source of Medicaid reimbursement for safety net hospitals that provides most of the care to Florida's poor and uninsured -- is facing a $103 million deficit.
"With Florida in a historic economic downturn and more budget cuts certain, legislators must protect safety net hospitals that provide most of the state's Medicaid and charity care," said Frank Sacco, President and CEO of Memorial Healthcare System in Hollywood, and board chair of the Safety Net Hospital Alliance of Florida. "With all of these challenges upon us, it simply isn't the time to consider eliminating the state's planning process for new hospitals."
Limited service hospitals have rapidly proliferated in growing states such as Texas and Arizona, where the planning process for new hospitals was eliminated. Limited service hospitals thrive by providing limited, profitable services to healthier patients with private insurance. They provide limited or no emergency services and very little care to charity, uninsured or Medicaid patients — most of whom access hospital care through the emergency room.
If limited service hospitals were allowed in Florida, full-service hospitals would carry the burden for providing emergency services, caring for the poor and uninsured, and offering the vital, yet unprofitable health services to the community -- such as trauma, burn and neonatal care.
Attending the press conference was Tracy Spivey, whose husband Steve died after suffering complications from spinal surgery at a 14-bed, limited service hospital in Abilene, Texas. Staff at the hospital had to call 911 because the facility's emergency department was not functioning. The hospital has since closed. Mrs. Spivey spoke out against limited service hospitals.
Additionally, hospital leaders say the current, 35-year-old Certificate of Need process is working -- it has promoted orderly, competitive growth of full-service hospitals and beds. Since 1999, 28 acute care hospitals have been authorized in Florida: 21 new and 7 replacement hospitals. And since 2004, full-service hospitals have added 1,941 beds, with another 2,391 in development.
Hospital leaders also raised concerns that limited service hospitals will aggravate Florida's existing shortage of doctors, nurses and health workers. Already, 16 hospitals are exempt from state rules that require them to provide certain emergency services 24/7, due to a shortage of physician specialists. In 2006, Florida's Agency for Workforce Innovation projected that the state will need another 112,843 health workers by 2014 -- with huge gaps projected in registered nurses, physical therapists, pharmacists and radiologists.
"Hospitals across Florida are already working hard to maintain adequate numbers of physician specialists, nurses and other health workers," Goldfarb said. "Eliminating the planning process for new hospitals and opening the door to the unchecked growth of limited service hospitals will only reduce healthcare access and patient safety."
This article was prepared by Health & Medicine Week editors from staff and other reports.
NeSmith and Carvalho: Don't end state planning for hospitals
It will open the door for "limited service" hospitals Gainesville Sun Opinion
By Wayne NeSmith and Tony Carvalho
March 18, 2008 — Florida’s full-service hospitals are facing huge cuts in federal and state funding to care for the elderly, poor and uninsured. They’re grappling with serious shortages of physician specialists and other health care workers.
Now, along with these profound challenges, there’s a proposal in the Florida Legislature to eliminate the state’s planning process for new hospitals. Full-service hospitals are united in their opposition to this proposal because it will further destabilize Florida’s health care landscape.
Eliminating health planning for new hospitals will lead to the explosion of small “limited service” hospitals and a two-tiered hospital system in Florida – one for the poor and uninsured, the other for healthier patients with private insurance.
In reality, Florida doesn’t need more hospitals. What Floridians need are more doctors – particularly specialists – more nurses, more health care workers and fewer uninsured citizens.
Florida is one of 36 states today that sees the value in retaining a planning process for new hospitals, and our process is working. It promotes orderly, highly competitive growth of new full-service hospitals, and assures that all patients – regardless of income – have access to vital health care services.
Since 1999, 28 acute care hospitals have been authorized under Florida’s health planning process. And since 2004, when the Legislature eased the approval process for new beds at existing full-service hospitals, 4,300 beds have been added or are coming online.
So what can Florida expect if the Legislature eliminates the planning process for new hospitals? One need only to look to rapidly-growing states such as Texas and Arizona, which ended planning for new, full-service hospitals and have seen a surge of limited service hospitals.
Limited service hospitals are typically 20- or 30-bed facilities that thrive by providing profitable services to healthier patients with private insurance. These hospitals provide limited or no emergency services and offer very little or no care to charity, uninsured or Medicaid patients – most of whom gain access to hospital care through the emergency room.
This creates a two-tiered hospital system in which the state’s existing, full-service hospitals must carry the burden for providing emergency services, caring for the poor and uninsured, and offering the unprofitable yet vital health services to their communities – such as trauma, burn and neonatal care. This places an even greater burden on our state’s safety net hospitals that provide the majority of charity and Medicaid care in our state.
Additionally, limited service hospitals actually increase health care costs while eroding patient safety, federal government studies have shown.
Eliminating planning and allowing a free-for-all of limited service hospitals isn’t creating real competition that benefits Floridians. Instead, it’s creating an unfair playing field that will hamper the mission and the financial health of Florida’s full-service hospitals.
Any serious discussion of allowing a proliferation of new limited service hospitals must include answers to this question: Where will all the doctors, specialists and nurses come from?
Florida hospitals are already experiencing staffing shortages. Today, 16 full-service hospitals have exemptions from a state requirement that they provide certain emergency services 24/7 because there simply aren’t enough physician specialists for round-the-clock coverage.
If Florida’s existing full-service hospitals must compete with new limited service hospitals for physician specialists and nurses, the state’s health care staffing shortages will only worsen while labor costs rise.
Florida leads the nation in percentage of residents over 65 and 85, one in four residents under 65 is uninsured and huge cuts in Medicaid and Medicare reimbursements are looming. Against this backdrop, legislators must avoid taking unwise actions that further destabilize health care. Now simply isn’t the time to consider eliminating the state’s planning process for new hospitals.
Wayne NeSmith is the president of the Florida Hospital Association. Tony Carvalho is the president of the Safety Net Hospital Alliance of Florida.
"Reform" Jeopardizes Hospitals The Ledger (Lakeland) Editorial
March 20, 2008 — Paying for health care is arguably the thorniest public policy issue in America today. And hospitals that treat lots of poor and low-income patients - including Lakeland Regional Medical Center - are already struggling to cope with federal and state funding cuts.
The Bush administration is proposing $458 million in Medicare reductions to Florida hospitals. The Florida Legislature has reduced Medicaid reimbursements and is likely to do so again.
Now, on top of those financial hits, comes an ill-considered proposal that would have the effect of further stacking the deck against hospitals that care for large numbers of poor and uninsured patients.
Certificate of Need
For more than three decades, Florida has had a "certificate of need" process that must be satisfied before new hospitals can be built or existing ones expanded. The process is not intended to deter competition; new hospitals have been approved and several existing ones expanded since 1999. Nonetheless, it is a rational means of determining the need for expensive new facilities within the framework of finite resources.
But a proposal before the Florida Legislature this session would eliminate the certificate-of-need process, presumably in the interest of encouraging more competition in health care. Far from assuring lower prices for consumers, this "reform" would only further jeopardize full-service hospitals that are already reeling from budget cuts.
"Florida's hospitals cannot afford legislative action that will further destabilize our health-care landscape," said Tim Goldfarb, CEO of Shands HealthCare in Gainesville and board chairman of the Florida Hospital Association, last week.
Look at Arizona and Texas
What worries the FHA is the prospect of "limited services hospitals" flourishing in a deregulated climate. Limited service hospitals, the FHA says, "provide limited or no emergency services and very little care to charity, uninsured or Medicaid patients - most of whom access hospitals through the emergency rooms."
Arizona and Texas, both states without a certificate-of-need process, have seen a proliferation of limited service hospitals that primarily offer care to wealthy patients with private insurance. That leaves general hospitals with the burden of caring for the poor and uninsured even as they lose revenue to cherry-picking limited-service hospitals.
"Eliminating the planning process for new hospitals and opening the door to the unchecked growth of limited-service hospitals will only reduce health care access and patient safety," Goldfarb argued.
Florida is already suffering from a shortage of qualified physicians, nurses and health-care workers. Specialty hospitals that cater to the well-off will certainly have an unfair advantage over general hospitals in recruiting scarce employees.
If the Legislature cannot adequately fund health care for the poor and uninsured in Florida, lawmakers should at least refrain from stacking the deck in favor of "boutique" hospitals for the wealthy. Abandoning the certificate-of-need process is a terrible idea.
Keep Hospital Regulation The Palm Beach Post Editorial
March 16, 2008 — Florida's shortage of physicians and nurses is so severe that patients in need of critical care have been dumped to hospitals in other counties. Sixteen hospitals, including some in Palm Beach County, have exemptions from providing certain emergency services around-the-clock. Because one in four Floridians under age 65 has no health insurance, emergency rooms routinely are used for basic care.
Yet Florida stands to lose more than $300 million in Medicaid payments next year. Now is not the time for the Legislature to scrap the state's system for regulating new hospitals.
Hospital administrators throughout the state point to Texas and Arizona and make grim predictions for what will happen if the Legislature this year gets rid of the "certificate of need" process required before a hospital is built or expanded. Those states eliminated similar planning requirements and gained many new hospitals providing limited or no emergency services.
At a news conference last week, Tracy Spivey spoke from personal tragedy about the risks at such limited-service hospitals. Her husband, Steve, died after complications from spinal surgery at a 14-bed hospital in Abilene, Texas, that ultimately had to call 911 for help. Such hospitals get to cherry-pick profitable services, providing very little to uninsured or poor patients.
Yet Gov. Crist told The Miami Herald that he favors getting rid of the regulation because he sees it as "an impediment to competition. If you have more facilities available it just strikes me you can have more competition and lower rates.''
With that comment, the governor displayed a misunderstanding of health-care economics. In fact, more hospitals with too few qualified people to staff them would not help patients and could harm them. Repeated studies have shown that more hospital beds -- particularly at physician-owned specialty hospitals -- did not result in lower costs. They led to more surgeries, to cover the cost of the new hospitals.
The certificate of need process is not perfect. Years of lengthy appeals from competing hospitals stalled Martin Memorial Medical Center's expansion into Port St. Lucie and have blocked Bethesda Memorial Medical Center's expansion west of Boynton Beach. Handled correctly, however, the process helps prevent duplicative medical services, unnecessary procedures and unreasonable costs.
The Florida Hospital Association projects that the state will need another 15,259 physicians in the next three to five years. Florida's Agency for Workforce Innovation in 2006 projected that the state would need 112,843 more registered nurses, physical therapists, pharmacists, radiology technicians and other health workers by 2014. Florida's colleges turned away 3,318 qualified nursing school applicants in 2005-06 because there were too few teachers and classrooms.
Getting rid of hospital regulation with those kinds of shortages would not spur healthy competition, as Gov. Crist contends. It would leave more Floridians competing for riskier health care.
March 13, 2008 — Paying for health care is arguably the thorniest public policy issue in America today. And hospitals that treat lots of poor and low income patients - like UF's Shands HealthCare - are already struggling to cope with federal and state funding cuts.
The Bush administration is proposing $458 million in Medicare reductions to Florida hospitals. The Florida Legislature has reduced Medicaid reimbursements and is likely to do so again.
Now, on top of those financial hits, comes an ill-considered proposal that would have the effect of further stacking the deck against hospitals that care for large numbers of poor and uninsured patients.
For more than three decades, Florida has had a "certificate of need" process that must be satisfied before new hospitals can be built or existing ones expanded. The process is not intended to deter competition; since 1999, 28 new hospitals have been approved and several existing ones expanded. Nonetheless, it is a rational means of determining the need for expensive new facilities within the framework of finite resources.
But a proposal before the Florida Legislature this session would eliminate the certificate of need process, presumably in the interest of encouraging more competition in health care. Far from assuring lower prices for consumers, this "reform" would only further jeopardize full-service hospitals that are already reeling from budget cuts.
"Florida's hospitals cannot afford legislative action that will further destabilize our health care landscape," Tim Goldfarb, CEO of Shands HealthCare and board chair of the Florida Hospital Association, said on Tuesday.
What worries the FHA is the prospect of so-called "limited services hospitals" flourishing in a deregulated climate. Limited service hospitals, the FHA says, "provide limited or no emergency services and very little care to charity, uninsured or Medicaid patients - most of whom access hospitals through the emergency rooms."
Arizona and Texas, both states without a certificate of need process, have seen a proliferation of limited service hospitals that primarily offer care to wealthy patients with private insurance. That leaves general hospitals with the burden of caring for the poor and uninsured even as they lose revenues to cherry-picking limited service hospitals.
"Eliminating the planning process for new hospitals and opening the door to the unchecked growth of limited service hospitals will only reduce health care access and patient safety," Goldfarb argued.
Florida is already suffering from a shortage of qualified physicians, nurses and health care workers. Specialty hospitals that cater to the well off will certainly have an unfair advantage over general hospitals in recruiting scarce employees.
If the Legislature cannot adequately fund health care for the poor and uninsured in Florida, lawmakers should at least refrain from stacking the deck in favor of "boutique" hospitals for the wealthy. Abandoning the certificate of need process is a terrible idea.
Crist has hospital agenda: But no member of the Florida House
seems interested in the governor's deregulation ideas By David Gulliver
Sarasota Herald-Tribune
TALLAHASSEE, March 6, 2008 — In his State of the State address Tuesday night, Gov. Charlie Crist again pitched his plan to increase hospital competition. One problem: The Florida House of Representatives does not seem to be listening. The deadline for filing bills closed earlier that day, with no House member submitting a bill on hospital regulation. A Senate bill has been filed.
There are other, more complicated routes for Crist's idea to clear the House. But those opposing the changes see it as a sign that the Legislature will not take up the issue. "It's not something that has any traction," said Rep. Bill Galvano, R-Bradenton, a member of the chamber's health care committee.
Crist's idea surfaced Jan. 31 as the last item in his list of measures to improve Florida's economic competitiveness. He proposed repealing the state's lengthy and complex process for approving new hospitals, known as certificate of need. Crist suggests replacing it with a simpler licensing process. The proposal sent hospital lobbyists scrambling. They claim the less restrictive system would lead to a flood of specialty hospitals that perform only lucrative surgeries for well-off patients. Studies from the federal Medicare Payment Advisory Commission and the U.S. Department of Health and Human Services back up those claims. Hospitals also claim, with some justification, that specialty hospitals' cherry-picking would leave them with only the unprofitable cases.
The Medicare commission study found that the general hospitals found ways to compensate and limit their losses. But community hospitals that provide large amounts of charity care — like Sarasota Memorial Hospital — would suffer more, lobbyists said. "We believe this will make our mission infinitely more difficult," said Tony Carvalho, president of the Safety Net Hospital Alliance of Florida. The group represents 14 hospitals, including Sarasota Memorial, that provide more than half the state's charity care. Hospital lobbyists are trying to steer attention to a different health issue — improving care for the state's roughly 4 million uninsured.
That is also one of Crist's top priorities, they note, and they hope he will decide hospital deregulation only worsens the uninsured problem. So far, Crist shows no sign of giving up, but House members show no sign of being more receptive. The governor repeated the proposal in one line of Tuesday night's State of the State address, where it drew little response from legislators.
Holly Benson, who heads the Florida Agency for Health Care Administration, which oversees hospitals, mentioned the idea in a meeting with the House health care committee. But the committee so far has no interest in pursuing it, Galvano said. Still, hospital lobbyists are not declaring victory. Sen. Durell Peaden Jr., R-Pensacola, has filed a hospital regulation bill, and amendments to general health care bills could revive it on the House side. "Until the session ends, we're going to work aggressively to demonstrate the value of hospital planning," said Rich Rasmussen of the Florida Hospital Association.
Hospitals oppose plan to eliminate CONs By Donna Vavala
NewsHerald.com
PANAMA CITY, March 4, 2008 — One of Gov. Charlie Crist’s main legislative priorities this session is getting rid of certificates of need for hospitals. The CON process requires state approval for new hospitals and adding new services or expanding existing ones. The idea behind the CON process is to stop duplication of services within a certain geographic area. The governor has said that by eliminating the CON process for new hospitals, competition will be generated, quality of care will be improved and costs reduced.
In Florida, CON regulates hospice, skilled nursing, intermediate care of the developmentally disabled, new and replacement hospitals and tertiary health services, including pediatric oncology, organ transplants and pediatric interventional cardiology, said Ralph Glatfelter, vice president of the Florida Hospital Association. Todd Gallati, CEO of Gulf Coast Medical Center, said the CON process has not hampered his hospital’s progress. “CON regulations have not kept GCMC from expanding its services or building what we want,” he said, pointing to the new heart cath lab that will open in April and the tripling of the hospital’s emergency room size three years ago.
“You can actually add 10 percent more beds without having to get a CON,” Gallati said. “We are not being held back because of CON regulations.”
Over at Bay Medical Center, CEO Steve Johnson said he opposes elimination of the CON process.
“There’s a huge concern regarding specialty hospitals cropping up,” said Johnson. “At the end of the day, it’s about the dollar.
“Texas has deregulated and, in Dallas alone, there are a couple of dozen specialty hospitals under construction,” Johnson said. “These hospitals are not required to have emergency rooms. The Emergency Medical Equipment Act requires that we see all comers. Specialty hospitals can select their patients and these patients have the means to pay.”
Glatfelter said 14 states have eliminated CONs and small, 7- to 10-bed specialty hospitals are springing up all over. He said there is evidence in Ohio that several city hospitals have been forced to close their doors following CON deregulation.
In Minnesota, Glatfelter said, CONs were eliminated, then a moratorium was called on building new hospitals. He added that areas of rapid growth, such as Texas and Arizona, are magnets for small specialty hospitals.
“There has been a proliferation of limited-service hospitals,” he said. “They are owned by physician investors and investors. The physicians steer patients to their own hospitals. They take the healthiest and best patients and the balance of the patients are sent to the full-service hospitals.
“It has a very real chance of undermining full-service hospitals,” Glatfelter said.
Crist seeks hospital deregulation By John Dorschner
The Miami Herald
TALLAHASSEE, March 3, 2008 — Will more hospitals mean tougher competition and cheaper prices for consumers?
Gov. Charlie Crist thinks so. He wants the Legislature to deregulate the hospital business, abolishing the arduous certificate of need process in which an applicant must prove a community needs a new facility.
Hospital associations, Associated Industries of Florida and many healthcare experts are opposed, saying more hospitals could mean more expense to the healthcare system, but the governor is adamant because he sees regulation as ``an impediment to competition.''
''If you have more facilities available, it just strikes me you can have more competition and lower rates,'' Crist told The Miami Herald. ``I am sort of resistant to the notion that once you get into the club, you can close the door behind you.
``I understand there are rationales to defend it, but delivery of healthcare is different than providing restaurant business. But I also hear stories about patients who need heart care and have to drive even farther rather than go to a hospital that didn't get the certificate of need and as a result there may be loss of life. That really troubles me.''
Rich Rasmussen of the Florida Hospital Association says deregulation ''could be very bad for hospitals'' because new facilities are likely to be small, physician-owned buildings that specialize in lucrative areas such as orthopedics and cardiology, ''cherry-picking'' the best-paying patients from community hospitals.
That means general hospitals are left with a larger share of the uninsured and poor patients on low-paying Medicaid.
Brian Klepper of the Center for Practical Health Reform says, ''Historically, there is no evidence that when you build more healthcare facilities that it creates a competitive environment.'' In fact, the Dartmouth Atlas surveys of Medicare data show that the more hospital beds there are in an area, ''there will be more stuff done to patients'' and overall healthcare costs will be higher.
That's backed up by a 2006 study by the Medicare Payment Advisory Commission, which found: ``Physician-owned specialty hospitals did not have lower costs per severity-adjusted discharge. . . . Physician owned heart hospitals were associated with a statistically significant increase in the rate of cardiac surgeries in the market area.''
No shortcuts on care A Times Editorial
St. Petersburg Times
February 25, 2008 — More than a year ago, 44-year-old truck driver Steve Spivey checked into a 14-bed hospital in Abilene, Texas, for surgery to ease the pain in his neck. His wife was by his side after the procedure and thought things were going well. Then he started to choke.
The nurses, she later told a CNN reporter, thought he was having a panic attack. She remembers repeatedly yelling for a doctor. He kept squeezing her hand until his eyes closed. When he stopped breathing, she performed CPR while a nurse scrambled to reach a doctor.
Tracy Spivey, mother of three, still describes herself as stunned by what happened next. The hospital staff dialed 911. "All I can remember," she told CNN, "is looking at him and saying, "You've got to be kidding.'"
West Texas Hospital, owned primarily by 33 physicians, has since been closed. But its tale has not escaped the attention of Congress and medical regulators. The lesson also cannot be lost on Florida, whose governor wants to open the door to what are known as "boutique" hospitals.
Gov. Charlie Crist, as part of his 2008 legislative agenda, is calling for the elimination of the Certificate of Need for new acute care hospitals. He says that "removing the burdensome Certificate of Need process will foster a competitive business climate." The process is without question a regulatory hurdle for those who want to build new hospitals, but it should not be removed.
That thorough analysis serves at least two clear public purposes: eliminating costly duplication of medical services and ensuring the highest quality of care. As the case in Texas demonstrates, the lack of such regulatory rigor can be costly.
Texas is one of only 14 states that no longer require certificates of need, and it has experienced an explosion of small, physician-owned hospitals. A 2006 report for the Medicare Payment Advisory Commission found, not surprisingly, that these specialty hospitals tend to offer more profitable procedures and serve more profitable patients. Medicaid makes up less than 3 percent of their revenue base.
The report also offers an obvious warning to Florida: "Specialty hospitals continue to locate in areas that lack certificate-of-need laws and have above-average population growth."
The financial fear for full-care, community-based hospitals in Florida is obvious. Small boutique hospitals can easily siphon off the well-insured and private-paying patients whom the full-care hospitals need to balance services such as emergency rooms that are an enormous financial drain. At a time when state and federal support for charity care hospitals is in decline, such competition would be unfair and financially crippling.
The death of Steve Spivey is also evidence that specialty hospitals raise legitimate questions of public safety. Any patient can die of surgical complications in any health-care environment, but the specter of a licensed hospital dialing 911 in a medical emergency is unacceptable. Lest anyone think the Spivey situation was unusual, a new report by the U.S. Health and Human Services inspector general finds that less than a third of these hospitals have a physician on site
at all times.
More chilling, the report concludes: "Two-thirds of physician-owned specialty hospitals use 911 as part of their emergency response procedures."
Spivey's widow couldn't believe her ears when she heard the order to dial 911. This is not the kind of regulatory shortcut Floridians can afford.
Crist's health plan a bad idea Ocala Star Banner Other Voices
February 25, 2008 — Gov. Charlie Crist's proposal to undo decades of health-care planning has many health leaders scratching their heads. Nobody seems to know where this proposal came from, or why it's popping up in states from Alabama to Pennsylvania. But almost everyone who cares about the state's overall health-care system agrees: It would be a bad idea.
There's little doubt that Florida's $100 billion health-care market represents a juicy plum to profit-driven companies who would love to set up shop here and skim the cream from the state's health-care spending, performing high-priced procedures while ducking the obligation to care for Medicaid and low-income recipients. Those Floridians who still have decent health insurance might find themselves wooed into fancy new boutique facilities.
But the profits would come with a heavy price tag. Public and not-for-profit hospitals rely on income from these procedures to help pay for more than $2 billion in uncompensated care that they provide each year, largely through emergency rooms that form a crucial safety net for all Florida residents.
According to the Florida Hospital Association, 28 new hospitals have been approved over the last eight years, and existing hospitals have added thousands of beds.
That blows away any argument that Floridians would benefit from Crist's proposal to gut the state's hospital-approval standards. Those standards, known collectively as "certificate of need" regulations, require a hospital to assess (and meet) the needs of the community where it is to be located, including a plan to serve Medicaid and Medicare patients. If those standards were too burdensome, Florida would be strapped for hospital beds - instead, it exceeds the national per-capita average for hospital capacity.
In the leather-paneled confines of a think tank, doing away with health-care planning might seem like an intriguing experiment. In the real world, it's likely to be a disaster, driving up costs and drying up access to life-saving care. It's a gamble lawmakers can't afford to take.
The Daytona Beach News-Journal
Retain hospital rule: Crist deregulation plan would backfire Bradenton Herald
February 24, 2008 — Gov. Gov. Charlie Crist has been very busy on the issue of health care this year. One of his most contentious proposals is to end the state's requirement of a "certificate of need" in order to build a hospital - all in the name of promoting competition and increasing efficiency in health care.
The idea is contained in his state budget outline, released earlier this month.
The certificate-of-need process, a state regulation since 1973, forces hospital planners to demonstrate market demand in order to win approval.
Philosophically, Crist's proposal sounds like a surefire winner. Competition is a bedrock value of our great society, and a free market is at the very core of our capitalist system. When businesses compete, consumers win. Price reductions, service improvements and product enhancements all ensue. More hospitals equals greater access and lower costs, the thinking goes.
On a practical level, the idea looks like a loser.
Hospitals have a far greater responsibility toward society than, say, a boat builder.
A boat builder is not required by law and business ethics to give away its products to poor people.
A hospital is. Laws and medical ethics require hospitals to treat indigent and uninsured patients.
A boat builder exerts some control over costs and prices. When expenses rise, the sales price of a boat goes up.
A hospital has little control. The government determines reimbursements for Medicare and Medicaid patients, setting the price at less than cost. The number of those patients combined with the uninsured account for 65 percent to 75 percent of a hospital's caseload, according to the Florida Hospital Association.
A boat builder is not anchored to one particular place. When competition gets too tough in one location, a boat builder can set sail to a friendlier business climate, say in the Carolinas.
A hospital is an entrenched institution vital to the wellbeing of a community.
When Crist espouses free-market competition among hospitals, he's comparing apples to oranges.
As Bradenton Rep. Bill Galvano says, we're not talking about making widgets or hamburgers, we're talking about saving lives. Like Manatee and Sarasota hospital officials and other Manatee lawmakers, he's against the Crist proposal.
Opponents fear that private boutique hospitals would siphon off insured patients seeking high-profit procedures. Those new facilities would not have to serve the indigent and under insured, thus avoiding uncompensated care. They are highly unlikely to open emergency rooms or obstetrics units.
Manatee Memorial Hospital wrote off $51 million in uncompensated care in 2006. A major decline in income from insured patients would put tremendous pressure on the state's safety-net hospitals - too much to bear, according to Blake Medical Center chief executive Dan Friedrich.
That's not the healthy competition Crist envisions.
Even Associated Industries of Florida, an influential business organization, opposes the idea. Florida is among 37 states with a certificate-of-need process, and an AIF study showed that health care costs are considerably higher in states that lack the certificate requirement, the St. Petersburg Times reported this month.
We fear that should Crist's proposal pass, our acute-care hospitals will suffer great harm and our health care bills will increase, contrary to the usual free market results from increased competition.
We also fear that taxpayers could be on the hook as those safety-net hospitals become threatened with closure and seek relief from elected officials.
We urge the governor to abandon this proposal. It does not serve our greater interests.
A step backward: Hospital planning would suffer under Crist's proposal Daytona Beach News-Journal
February 20, 2008 — Gov. Charlie Crist's proposal to undo decades of health-care planning has many health leaders scratching their heads. Nobody seems to know where this proposal came from, or why it's popping up in states from Alabama to Pennsylvania. But almost everyone who cares about the state's overall health-care system agrees: It would be a bad idea.
There's little doubt that Florida's $100 billion health-care market represents a juicy plum to profit-driven companies who would love to set up shop here and skim the cream from the state's health-care spending, performing high-priced procedures while ducking the obligation to care for Medicaid and low-income recipients. Those Floridians who still have decent health insurance might find themselves wooed into fancy new boutique facilities.
But the profits would come with a heavy price tag. Public and not-for-profit hospitals, such as the ones that serve Volusia and Flagler counties, rely on income from these procedures to help pay for more than $2 billion in uncompensated care that they provide each year, largely through emergency rooms that form a crucial safety net for all Florida residents. Statewide, these hospitals aren't paid for more than 8 percent of the care they provide; for Halifax Health Medical Center, the area's largest publicly owned hospital, the figure is more like 13 to 14 percent (a figure partially offset by tax contributions).
Even with these constraints, Florida's hospitals have worked hard to ensure their patients access to the best possible care. Both Halifax and Adventist Health Systems, which operates four area hospitals, have invested heavily in state-of-the-art imaging systems, advanced care for stroke and cardiac patients and improved trauma care. Halifax and Florida Hospital Ormond Memorial are both moving ahead with plans to build new facilities.
They aren't the only ones. According to the Florida Hospital Association, 28 new hospitals have been approved over the last eight years, and existing hospitals have added thousands of beds.
That blows away any argument that Floridians would benefit from Crist's proposal to gut the state's hospital-approval standards. Those standards, known collectively as "certificate of need" regulations, require a hospital to assess (and meet) the needs of the community where it is to be located, including a plan to serve Medicaid and Medicare patients. If those standards were too burdensome, Florida would be strapped for hospital beds -- instead, it exceeds the national per-capita average for hospital capacity.
There's certainly room in the health-care provider network for healthy competition -- and it's worth noting that Florida's rules already allow limited-service hospitals to compete with more comprehensive facilities. But Crist's plan would give profit-seeking newcomers an lopsided advantage -- and the cost would fall heavily not only on the state's existing hospitals, but also on the millions of Florida residents who need the less-than-profitable services provided in burn units, neonatal intensive care units and trauma units across the state.
In the leather-paneled confines of a think tank, doing away with health-care planning might seem like an intriguing experiment. In the real world, it's likely to be a disaster, driving up costs and drying up access to life-saving care. It's a gamble lawmakers can't afford to take.
New USF hospital wrong on all counts St. Petersburg Times
February 18, 2008 — Now is not the time to consider building a new teaching hospital at the University of South Florida. State and local governments are cutting billions in spending. Universities, including USF, are turning away students and imposing hiring freezes. The housing market is stalled, and the economy is flirting with a recession. What Floridians want is for their leaders to set appropriate priorities and spend declining public resources on the most pressing priorities. A USF hospital fails on both counts.
Sen. Dennis Jones, R-Seminole, filed legislation that would clear the way for medical schools in Florida to exempt themselves from the state's certificate of need, or CON, process, a regulatory requirement for all new hospitals. While the legislation would be only a first step, it would remove a major barrier by allowing the university to lobby for a hospital while avoiding the most important criterion: need. While the CON process takes time and can slow the response to a community's evolving health care needs, the purpose behind it is sound. The market demand for an expensive new facility, particularly one built with public dollars, should be demonstrated before allowing construction to proceed.
Put aside, for a moment, whether USF needs its own hospital. Jones' bill would cause havoc with health care planning. Giving USF or other medical schools a freebie on certifying need only invites a rush toward empire-building. The big losers would be those public charity care hospitals that would see the more lucrative sides of their business pulled away - private-paying and insured patients whose revenue helps general hospitals' subsidized care for the poor. CONs are essential - especially when it is a state university asking the state to get into the hospital business.
Advocates argue the hospital would raise USF's profile, enable it to attract more prominent faculty and generate money for health services outside the state budget. Those are worthy goals. But building a new hospital, particularly now, is an inefficient way to accomplish them. Why not expand residencies with USF's existing hospital partners? USF's main teaching hospital, Tampa General, is a recognized leader nationally in trauma, transplant, nursing care and other services. It is about as close to a university teaching hospital as USF could want. The growth of biotech and medical services and research in the Tampa Bay area also puts USF in place to raise its international stature.
The financial issues also are a concern. The Florida Hospital Association, which opposes Jones' legislation, estimates that a new full-service hospital costs $2-million per bed. USF envisions a 200-bed facility. The state does not have that kind of money lying around. Neither does this community.
In concept, there may be merit in a university teaching hospital. There is the value of having academic excellence associated with a university's name, and USF's medical school has trained some of the area's finest physicians. But the issue here seems to be more about independence and self-image than medical necessity, and the timing is all wrong.
If USF wants its own teaching hospital, it is going to have to wait for a better economic climate and it is going to have to play by the regulatory rules.
Crist's acute care hospital plan sparks debate By Donna Wright
The Bradenton Herald
February 9, 2008 — Gov. Charlie Crist wants to do away with the complex and lengthy certificate-of-need process the state requires to build an acute care hospital.
Eliminating certificates of need would increase competition and efficiency in the health care marketplace and increase access to health care, Crist says in his recently released budget.
But local health leaders and lawmakers say exactly the opposite will happen if the approval process is repealed. Full service hospitals like Manatee Memorial Hospital will not be able to compete with private "boutique" hospitals that offer only the most profitable services without having to provide uncompensated care for the poor and under-insured, said Moody Chisholm, the hospital's chief executive.
Rep. Bill Galvano, R-Bradenton agrees.
"I am sure the governor believes this is about competition and access - the more hospitals there are out there, the better the access there is - well, that's true for Burger King, but not for hospitals who can't turn anyone way. Health care is much more complicated than that. We are not talking about making widgets or hamburgers. We are talking about saving lives."
Florida is one of 37 states that require acute-care hospitals to pass a certificate-of-need process before they can be built. Crist wants to replace that process, which requires the entire health care needs of the community be considered before granting a certificate to build, with a simple licensing procedure.
Dan Friedrich, chief executive of Blake Medical Center, said Crist's proposal would hurt Manatee County.
"In states which have deregulated the certificate of need process, the proliferation of specialty and boutique hospitals has left community and safety net hospitals with the burden of providing low revenue services for the medically under-served, which has strained their ability to sustain their operations."
Local hospitals won't be able to bear that burden, Friedrich added.
Sarasota Memorial also opposes Crist's proposal.
"For 35 years, the certificate of need program has played a critical role in maintaining quality services in an efficient manner," hospital officials said. "Florida's current planning process is working. Certificates of need foster orderly but highly competitive growth."
State Sen. Mike Bennett, R-Sarasota, agrees the certificate of need process should not be scrapped, but he would like to see it bypassed in areas of acute need, such as beds for geriatric patients with psychiatric problems.
"Hospitals that once had psychiatric beds are converting them to cardiac beds because those are more profitable," he said. "As a result, there is nowhere for geriatric psychiatric patients to go."
