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Georgia Considers CON Reforms to Increase Health Care Access

September 13, 2018
By Travis Akin

Georgia lawmakers are considering reforms to the state’s certificate of need (CON) laws, the regulatory frame- work designed to limit health care providers’ ability to provide new facilities and services.

The state’s House Rural Develop-ment Council (HRDC)—chaired by Appropriations Committee Chairman Terry England (R-Auburn) and Ways and Means Committee Chairman Jay Powell (R-Camilla)—will consider reform proposals during the council’s September session.

The CON law reform effort in Georgia has been spurred in part by the state’s June denial of a proposal by Hamilton Health Care System to build an open- heart surgery center and renovate the hospitals it operates in northern Georgia. The service area for the hospital is large, constituting more than 400,000 potential patients.

In addition to the effort in the Georgia House, Georgia Lt. Gov. Casey Cagle is working with members of the state’s Senate Study Committee to draft CON reform legislation for that chamber. Georgia is one of 35 states that institute CON laws. In September, the HRDC reviewed reforms that would end CON laws in urban areas but preserve them in rural counties.

CON law supporters say access to health care in rural communities should be protected and rural hospitals should be shielded from increased competition. Many states have enacted regulations on what health care experts call “hospital substitutes,” such as ambulatory surgical centers (ASC), in an effort to protect health care access.

Many CON laws originated from the 1974 federal Health Planning Resources Development Act and need to be reformed to reflect health care’s changing technology.

Local Story, National Implications

The CON law process frequently leads to expensive legal challenges for health care providers and is often co-opted by established facilities that have figured out how to use the system to their own advantage, says Matthew Glans, a senior policy analyst with The Heart- land Institute, which publishes Health Care News.

“CON laws have proven to be a troublesome policy for Georgia, with facilities around the state maneuvering to circumvent the law by courting exemptions for their expansions, using the law to block competitors from entering the market or challenging the Georgia CON law directly in court,” Glans said. “Georgia’s problem is not unique. All states with CON laws have the potential for this kind of abuse. States should move away from these artificial and disruptive laws.

“CON laws don’t improve health care access and end up costing the consumer more because they hinder competition, which keeps costs low, and forcing providers to fall back on using aging facilities and equipment,” Glans said. “The Mercatus Center published a study on

Georgia’s CON laws, using methodology that relied on other states’ existing data, and the Mercatus scholars ultimately concluded that if the state’s CON laws were repealed, each person could save $187.”

Laws Limiting Access

According to Hamilton Health Care System data, more than 200 patients in the region the hospital serves travel to other hospitals for open heart surgery because of insufficient access to the procedure in Georgia’s northern counties. These journeys can take as long as 12 hours before patients reach operating tables at hospitals in places such as Chattanooga, Tennessee, the company reports.

Cagle says the long distances people travel for care are a concern and reveal that CON laws fail to give due consideration to health care needs at the local level.

“The issue with the CON process is that it looks at the statewide need rather than looking at needs regionally, which I find is a flawed strategy,” Cagle stated at a July press conference after the Hamilton Health Care System decision. “The community needs the level of care that Hamilton can provide.”

In addition to overlooking local and regional health care needs, CON laws inhibit innovation and put providers’ financial well-being above patients’ health outcomes, Glans says.

“CON laws increase the price of health care, reduce competition, and diminish care by making it more difficult to improve services or add new beds,” Glans said. “CON laws give cur- rent suppliers of health care services an unfair advantage while keeping out new entrants into the marketplace.

“Instead of giving special treatment to specific providers, Georgia should open up competition by rolling back its CON laws,” Glans said.

Process Reform

Glans says although a full repeal of the state’s CON law is the best option, there are some intermediate reforms that could help if repeal is not politically possible.

“Legislators should consider narrowing the number of services covered by CON to as small a number as possible,” Glans said. “Competitors should not be given undue access to the process, as this results in a clear conflict of inter- est.”

Travis Akin (akin.travis@gmail.com) writes from Chicago, Illinois.

 

INTERNET INFO:

“Certificate Of Need Law: Georgia State Profile,” Mercatus Center, 2016: https://www.mercatus.org/system/ files/georgia_state_profile.pdf

 

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