CON Scale-Back Bills Rolled Out To Mixed Reviews
December 11, 2019
Small rural hospitals, some psychiatric facilities, air ambulances and outpatient cardiac procedures wouldn’t need to go through the additional state regulatory step known as Certificate of Need (CON) under legislation receiving its first hearing Thursday.
The bills championed by Senate Health Policy Chair Curt VanderWall (R-Ludington) also exempts capital expenditures from the oversight of the 11-member CON Commission, which would be expanded to include two public members under the package.
VanderWall unveiled the bills — SB 669 through SB 675 — last week after more than 80 meetings with health care-related groups. The proposed reforms come after VanderWall saw Northern Michigan hospitals move certain services to larger campuses to cut costs among other bothersome health care trends.
No specific interest group had a hand in crafting all seven bills, VanderWall said. This project is something he began last term as a freshman House member and something he said he’s willing to add to and subtract from to “provide better quality care, improve access and reduce costs.”
“This is a huge paradigm shift, I understand,” he said. “But let’s talk about the issues. I understand people are pretty nervous, but we’ll have to work through that.”
CON is the state oversight system designed to limit the proliferation of large-dollar equipment and facilities to prevent an oversaturation that could add costs to health care and leave poorer areas without access to critical services.
The Commission basically prevents boutique medical operations from skimming away the well-insured patients in affluent areas to the detriment of everyone else.
The Michigan Health and Hospital Association, Blue Cross Blue Shield of Michigan, Michigan Manufacturers Association and CON Chair James “Chip” Falahee Jr., representing Bronson Hospital, all came out in general support of the CON system and had mixed opinions on the bills.
By and large, they liked expanding the CON to 13. They weren’t convinced that unplugging psychiatric services from CON would improve access. A lack of psychiatrists and mental health professionals, in general, is the larger issue, they said.
Instead of taking capital expenditures out of the CON process, they suggested increasing the dollar trigger before the Commission would become involved. Currently, anything more than $3.325 million gets flagged for review. Perhaps that amount could be increased.
VanderWall said he was bothered that a local hospital wanted to add a reasonable rehabilitation center to its facility, but was forced to pay thousands of dollars in CON permitting fees to make it happen.
Those testifying weren’t crazy about removing cardiac procedures from the CON process either. An MHA memo given to committee members noted that in 1% of the cases involving heart procedures, there is a major complication that requires emergency intervention.
The clear message in committee was that those going an outpatient route for a new pacemaker don’t want to be one of those 1%.
A 2007 study by Rice University’s James Baker III Institute for Public Policy found 103 cardiac patients’ deaths could have been avoided by retaining CON rules.
Blue Cross Blue Shield of Michigan’s Amy McKenzie said she can understand lowering CON thresholds for rural hospitals, but carving them out of the process entirely isn’t the answer.
Without CON, the concern is that large for-profits will lease out equipment, run it out of a small rural hospital and offer high-margin, profitable services through the type of cherry-picking CON is designed to prevent.
“New services without demonstrated need simply divert services, and may financially cripple an existing, well-performing provider that offers the full spectrum of services, ultimately resulting in less choice and access for the community,” McKenzie said.
The bills are supported by the Americans for Prosperity (AFP), but VanderWall said the free-market advocacy group was not involved in crafting the bills. Also, while Senate Majority Leader Mike Shirkey (R-Clarklake) is aware of the legislation, he’s “left me alone on this,” VanderWall said.
The goal is to hold another hearing on the bills next week and then possibly make changes over the holiday recess, he said.
“The bills introduced today are commonsense reforms that will eliminate unnecessary red tape, reduce costs and provide more access to Michigan residents,” he said.