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Politics

House Back to Debating Hospital Approval Process

October 3, 2011 - 6:00pm

Amid questions about taking a free-market approach, a House panel Tuesday reopened a long-running debate about state approval of new health facilities.

House Health Care Appropriations Chairman Matt Hudson, R-Naples, said the state has taken a series of steps in recent years to scale back the so-called Certificate of Need process. He questioned whether "we could make the free market work" for facilities such as hospitals and nursing homes.

"The reality is you're not going to make a $250 million investment or a $400 million investment into a new hospital if you don't think you can make a profit,'' Hudson said as the House Health and Human Services Quality Subcommittee heard a presentation about the CON process.

It was unclear whether legislative leaders have any desire to address the politically volatile CON issue during the 2012 session. Senate Health Regulation Chairman Rene Garcia, R-Hialeah, said the Senate hasn't looked at taking up the issue.

Also, Rep. John Wood, a Winter Haven Republican who is chairman of the House Health and Human Services Quality Subcommittee, said there is no commitment to change the CON process.

But Wood said he wanted discussion of the issue, as he looks to give the health system flexibility as Florida moves toward a statewide Medicaid managed-care program.

"I'm just trying to have the conversation, basically,'' Wood said after his panel heard the presentation.

Major hospital and nursing-home industry groups immediately said they want to keep the CON process.

Bruce Rueben, president of the Florida Hospital Association, said it is "always enticing" to think the free market would work better. But Rueben said hospitals don't operate in a free market, in part because government health programs set prices that are below the hospitals' costs.

Rueben and Tony Marshall, senior director for reimbursement at the Florida Health Care Association, said eliminating the CON process would hurt already-existing community hospitals and nursing homes.

Marshall said, for example, that nursing homes have been required through the CON process to serve certain amounts of Medicaid beneficiaries. If the process was eliminated, Marshall said he is concerned that new "boutique" facilities would only serve people who fund their own care or who are funded through Medicare -- both of which pay more than Medicaid.

Certificates of need are required for new hospitals, nursing homes, hospice facilities and what are known as intermediate care facilities for the developmentally disabled. The program is designed to prevent costly duplication of health services.

Companies or organizations hoping to build projects have to apply to the Agency for Health Care Administration, which looks at factors such as the populations of the targeted areas. Proposed projects also can spur lengthy legal fights.

Jeff Gregg, AHCA's chief of health facility regulation, said the number of CON applications has dropped in recent years. He said the health-care system has become diverse and highly developed; also, the state has taken a series of steps that have loosened CON restrictions.

Gregg, however, cautioned Wood's committee about eliminating the approval process for the hospice industry, where he described CON competition as "intense.'' He said hospices require less capital investment than hospitals and nursing homes and are relatively easier to operate.

"I think the first thing you would see is many more hospice programs,'' Gregg said.

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