Retain state regulation of hospitals
Allow hospitals to open wherever they want and the free market will take it from there. Competition will drive down prices and drive up quality.
That is the tempting argument behind bills in the Florida Legislature that would eliminate the need for hospitals and other health facilities to obtain state permission before opening or expanding.
House Speaker Richard Corcoran, RLand O’ Lakes, and Gov. Rick Scott agree with the concept, even though history shows that free market principles don’t work so well in health care.
Having a hospital on every corner doesn’t lower health care costs. And allowing for-profit surgi-centers to keep patients overnight — a big driver behind this push — could hurt hospitals that must treat everyone who walks into the emergency room.
This year marks the Legislature’s latest attempt to eliminate the Certificate of Need program, which the state created in 1973 to regulate the expansion of health care facilities and avoid the costly duplication of medical services.
Though Florida’s program has been reformed in recent years, hospitals still can’t open until regulators determine there is a need. House Bill 27 and Senate Bill 1492 would make several changes to the program. Most notably, they would end state approval for hospitals.
The House analysis lays out the argument for keeping regulatory approval. States created them “to prevent overbuying of expensive equipment, under the economic theory that excess capacity directly results in health care price inflation.” In other words, if a hospital has empty beds or underused services, it has to charge more to maintain them.
Scott, who ran a hospital company before becoming governor, is a true believer in deregulation. “Texas has no certificate of need laws for hospitals, and only about one percent of Texas hospitals have readmission rates lower than the national rate,” Scott said. “In Florida, almost 18 percent of our hospitals have readmission rates worse than the national rate. Competition helps reduce costs and increase patient quality of care — plain and simple.”
The problem with free-market thinking, however, is that health care isn’t a freemarket business. In almost all cases, patients don’t pay for their care; insurance companies pay.
Health care is not “something we choose. It’s something we need to have. So we don’t look for something cheaper,” says Linda Quick, the former executive director of the South Florida Hospital & Health Care Association.
Imagine if Holy Cross Hospital began offering appendectomies at a 25 percent discount, she said. Would you get one just because it cost less?
Plus, if we need a specialist, we’re often guided by our family doctor. The same goes for the choice of a hospital.
One can envision what would happen without the Certificate of Need program. Like for-profit charter schools, new hospitals would set up near established ones and pick off paying patients. That would leave older hospitals with more uninsured or underinsured patients. This scenario is more likely in Florida, which has refused to expand Medicaid under the Affordable Care Act.
Scott ran a for-profit company — Columbia/HCA — and has expressed scorn for what he calls “non-taxpaying hospitals,” meaning not-for-profits and taxpayersupported operations like Broward Health and Memorial Health. But such hospitals provide the great majority of care in our community, including charity care.
Investor-owned chains, such as HCA and Tenet, favor ending state regulation because they want to build facilities where they don’t now have them. This includes surgery centers, which seek to keep patients overnight and compete with hospitals.
We oppose ending Certificate of Need until there are changes at the federal level — such as a single-payer system — that would reduce the risk of harmful disruption.
Though the House bill has passed one committee on a party-line vote — Republicans in favor, Democrats opposed — the Senate version has had no hearings. Previous attempts to end the program died in the Senate.
Worse than the Legislature passing a bad bill, however, would be to put this issue in a constitutional amendment. The Constitution Revision Commission is considering such a proposal, though it would retain the rule for nursing homes. If such an amendment passed, it would take another statewide vote to fix problems.
Most states still have Certificate of Need programs. Florida should remain one of them.
Editorials are the opinion of the Sun Sentinel Editorial Board and written by one of its members or a designee. The Editorial Board consists of Editorial Page Editor Rosemary O’Hara, Elana Simms, Andy Reid and Editor-in-Chief Howard Saltz.