February 11, 2008

Deregulating CON could increase health care costs and destroy safety-net system

Tallahassee, Fla. – Associated Industries of Florida’s Florida Hospital Council (FHC) today advocated the continued need for the state’s Certificate of Need (CON) requirements for hospitals.  Governor Crist is expected to propose deregulating the CON process this year.

“Eliminating CON would encourage the building of potentially unnecessary hospitals which only offer limited services,” said Barney Bishop, president and CEO of AIF.  “These additional hospitals would only lead to high costs and will have a negative financial and staffing impact on existing healthcare facilities that have a history of serving local community needs.”

Governor Crist is asking the Agency for Health Care Administration (AHCA) to draft a bill that would eliminate the CON process. CON was established in 1973 to prevent the unnecessary duplication of health care services and facilities by requiring providers to obtain state approval prior to incurring significant capital expenditures or initiating new services.

“Healthcare is an issue that consistently polls as a top concern among Floridians who are seeking high quality and affordable medical care,” said Bob Broadway, FHC chairman. “We should not create a system where unnecessary and duplicative services are offered within the same community.  This scenario would strain the ability of our state’s current hospitals that are committed to serving Florida’s medically needy patients and other local residents.”

The Florida Hospital Council points to key issues for consideration:

• Health care is not a commodity or retail business
  Unlike restaurants and car dealers, hospitals are required to give away services to people who can’t afford to pay. Hospitals are required by federal and state laws to provide care in all urgent and emergent circumstances regardless of whether the patient can pay. 
  
  
• It will increase health care costs
  Three major automobile manufacturers commissioned independent studies that demonstrate the cost for healthcare is significantly higher in states without CON regulation. Deregulation does nothing to ensure that those who need care the most- the uninsured and indigents- are actually getting it.
  
  
• It will make the nursing shortage crisis worse
  For the past decade, Florida has been experiencing a serious shortage of doctors and nurses, as well as other allied health professionals. If CON is abolished, who will staff these new facilities and at what cost to the state’s existing hospitals?
  
  
• Unnecessary hospitals will destroy the safety-net system
  In states which have abolished CON, the proliferation of hospitals has siphoned away the better paying patients from community and safety-net hospitals. The community hospitals are then left with providing low revenue services to primarily the medically underserved, straining their ability to sustain operations.

“With the growing number of uninsured persons in Florida, providing affordable and quality healthcare becomes even more challenging.  In addition, the state faces a shortage of doctors and nurses, said Bryan Anderson, FHC member.  “Opening the doors to new and unneeded hospitals will  greatly exacerbate these serious healthcare problems.”

Florida Hospital Council members say the state’s certificate of need process has been in place since 1973 and its working well.  Existing hospitals are able to provide growing communities adequate access to affordable and effective healthcare by adding beds and new or expanded medical services.