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Giselle Sorial

on 28 March 2013

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Certificate of Need What is Certificate of Need?
Aka: CON In the United States, it is a legal document required in many state and some federal jurisdictions before proposed acquisitions, expansions, or creations of facilities are allowed. They are issued by federal or state regulatory agencies with authority over an area to affirm that the plan is required to fulfill the needs of the community. Roemer's Law 1940's By:
Mark Cohen, Irma Khonelidze,
Giselle Sorial, Lia Mamatsashvili A hospital bed built is a hospital bed filled.....

Thus, the birth of CON Laws. If you build it, they will come... Objectives of CON Promote delivery of high quality health care and ensure that services are aligned with community need -New York State CON Timeline Health planning took a more formal structure in the 1940s – federal legislation required each state to develop a plan for health facility construction for allocation federal construction grants In the mid-1960s health planning was thought to be able to “ bring order into the spotty and fragmented statewide planning processes”. 1960s 1964 – New York State – statute granting state government power to determine need for any new hospital or nursing home construction 1968 - American Hospital Association becomes interested and encourages states to develop their own CON laws Congress funded a number of health planning initiatives and a network of federally funded health planning organizations were established in the mid 1970s Health Planning Resources Development Act lead to Federal funding for CON programs 1974 Mandate and funding increasing numbers of CON programs 1975 – 20 states with CON laws Why CON? Underlying assumptions:
Excess capacity Health care cost inflation
"a hospital bed built is a hospital bed filled"
Health Care Services not a “typical” market Underlying intentions:
-Match bed capacity to needs
-Don’t duplicate expensive equipment purchases Unintended consequences?
-Prevent market entry and limit market forces
-Increase costs Three Changes: 2011-2012 Change One: -Consolidation of two organizations, SHRPC and PHC, into PHHPC

-Eases regulatory process for establishing or transferring ownership of Health Care facilities and Home Care agencies

-Shortens review period Changes 2 and 3: Electronic CON system:

-eases PROCESS of application-Reduced review 01/2012

-Increase capital cost thresholds that trigger review of projects

-no review for routine repair and maintenance

-Non-clinical and HIT no longer subject to full review-one for one equipment replacement (eg CT, MRI) Types of Review: Full – Requires PHHPC recommendation and decision
Administrative – 15 to 25 M, does not require a PHHPC recommendation, no change in ownership
Limited – does not require a PHHPC recommendation Full Review:Article 28 Facility
(hospital, nursing home,diagnostic and treatment) -addition of beds
-bed conversion (some types)
-addition of, or changes in, delivery of certain services
-construction or purchase of major equipment in excess of 25M, 50M for hospitals
-changes in ownership, creation of parent entities
-addition of PCI to hospital without cardiac sx -certification of, assuming operation of primary care clinics

-adding additional dialysis stations

-addition of Adult Day Care Program or slots

-relocation of main site of dx/tx center

-project costs up to 15M, and not more than25M

-ER renovations, modernizations <50M

-PCI if existing cardiac catheterization program
adding ORs if <50M Administrative Review - Article 28 Facility
(hospital, nursing home, diagnostic and treatment center) Limited Review - Article 28 Facility
(hospital, nursing home, diagnostic and treatment -minor construction (<6M)

-acquire, relocate, install, modify some equipment

-decertify facility beds

-add, upgrade, replace cardiac catheterization lab in approved facility

-purchase and implementation of HIT under 15M 1978 – 36 states with CON laws 1987 – Federal mandate repealed (along with Federal funding)
approximately 36 states currently with CON programs
approximately 14 others still have some mechanism to control costs and duplication of services CON’s Shortcomings CON impacts only supply and distribution of health care services, not demand. CON does not cover services provided by physician practices, that has potential drives up health care spending. -It may prolong the development of licensed primary care sites which might be needed to meet demand of newly-insured New Yorkers.

-Health care facilities and agency operators misalignment with the growing complexity of health care organizations, need of establishment new integrated systems. PHHPC’s Proposal -Regional planning can be an effective tool to bring together a broad range of stakeholders to advance the Triple Aim

-Eliminate CON for primary care facilities, whether D&TCs or hospital extension clinics; retain licensure requirements.

-Reconsider the utility of CON for hospital beds in the next three to five years -Update the CON process for hospice

-Update the criteria that trigger the facility licensure requirement and equalize the treatment of physician practices and facilities with respect to CON -Rationalize “taint” policies to eliminate barriers to integration and recruitment of experienced governing body members.

-Streamline character and competence reviews of complex proprietary organizations (e.g., publiclytraded, private-equity-owned) and new, complex not-for-profit systems.

-Align “passive parent” oversight with powers exerted by parents and promote integrated models of care.

-Improve the transparency of major changes in board membership Policy Implications: -Most believe that CON should be maintained in their state, it creates a forum for public discussion and feedback from the community and state agencies.

-Due to its inefficiency and ineffectiveness, it is seen as more of a “Better than nothing” policy, when attempting to curtail uncontrolled or unrestricted growth of healthcare services and facilities.

- It serves a useful social purpose in ensuring access. -Holds Private hospitals accountable, while critical in protecting public sector.

-For instance, after hurricane sandy, admin at St.Lukes Roosevelt hospital, eliminated a unprofitable pediatric unit and merged a detox unit into a separate substance abuse unit.

-Under a weakened CON process, unilateral and unaccountable action will become the norm.
-It is seen as a way for top tier hospitals to choose what services they provide-based on profit. So they can attract insured patients from public and community hospitals and shift unprofitable patients into public/community hospitals. The Failed for profit model: CON

-Without solid state health planning and accurate estimates of changes in population and demand for services, these in effect weaken CON programs.
It is extremely difficult to set, evaluate and enforce standards.

-Rather than containing hospital costs CON may actually increase them by reducing competition.

-In 5 of 6 states studied, all except Michigan, the CON approval process can be highly subjective and tends to be influenced heavily by political relationships rather than policy objectives.

-Decades of CON laws have showed that costs still continue to rise, and that they have failed to reduce healthcare costs.
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