Unhealthy blockage constricts certificate-of-need relief

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On March 20, 2020, in response to the Covid-19 pandemic, Georgia Gov. Brian Kemp issued an executive order relaxing many restrictions on healthcare providers. It included the suspension of the state’s certificate-of-need (CON) law.


By Chris Denson, Director of Policy and Research, Georgia Public Policy Foundation


 

When hospitals suspended elective surgeries to preserve resources and focus personnel on Covid-19, many patients were forced to postpone often vital surgical procedures. As Johns Hopkins Medicine notes, “An elective surgery does not always mean it is optional. It simply means that the surgery can be scheduled in advance.”

Some Georgians with heart conditions, for example, were surprised to learn that certain cardiovascular procedures they needed were deemed “elective” and delayed indefinitely because of Covid-19.

As the Mercatus Center explains, Georgia’s CON law requires “healthcare providers to obtain permission before they open or expand their practices or purchase certain devices or new technologies. Applicants must prove that the community ‘needs’ the new or expanded service, and existing providers are invited to challenge would-be competitors’ applications.”

Kemp’s March 20 executive order declared the Department of Community Health (DCH) was “authorized and directed to” suspend Georgia’s CON law “where such suspension would permit capable facilities to expand capacity, offer services, or make expenditures necessary to assist with the needs” of the public health emergency.

Unfortunately, the implementation of this mandate fell short of its directive, especially when it came to offering Georgians a safe option during a pandemic.

In March and April, 32 unique applications were submitted to DCH, from hospitals and ambulatory surgery centers as well as home health and rehab centers.

Ambulatory surgery centers (ASCs) offer selected surgical and procedural services in a non-hospital setting, often at significantly lower cost. They have no emergency room and can choose which patients they serve. Their role is significant when it comes to cost and, especially during the pandemic, patient safety.

Fourteen of the applications were from ASCs seeking relief under the CON suspension. Many sought to convert their single-specialty facilities into multi-specialty centers during the pandemic, to enable physicians to use their operating rooms for elective surgeries postponed in a hospital setting.

Yet, DCH did not approve even one of the ASCs’ applications.

Citing a subsequent executive order Kemp issued on April 20, the department ruled there was no longer any need for the expansion of available healthcare providers and facilities under the current public health emergency. That executive order stated, in part, that operators of various “healthcare-related practices and services that have elected to cease operations because of the spread of Covid-19 should begin treating patients as soon as practicable.”

The reopening of those facilities, the department wrote in one denial letter, “obviates the need for” relief from Georgia’s CON law. “Moreover,” the letter added, “the request (for relief) did not articulate that there was a specific request from a hospital seeking to divert patients … so the hospital can focus its resources on Covid-19 patients.”

A common theme among these denial letters was that ASCs had not proven their local hospitals needed the overflow capability, even though hospitals not only continued facing patient overflow, but many continued to postpone some elective surgeries as they focused on the pandemic.

Notably, all 14 ASC applications were opposed by the Georgia Alliance of Community Hospitals, a trade group representing the state’s non-profit hospitals; neighboring hospitals themselves opposed only two of these site requests.

In 2019, the Legislature revised state code to restrict CON opposition to existing facilities within a 35-mile radius of proposed ones. Given that change, it is highly questionable that a trade association that does not operate any healthcare facilities could raise the sole public dissent for many of these applications.

With Covid-19 cases in Georgia higher than ever, it is mystifying that state regulators have chosen this course of action, especially considering the Governor never explicitly prohibited elective surgeries and hospitals themselves took this action.

It is disappointing that DCH stifled patient access during this emergency, apparently prioritizing special interest groups over the health and safety of Georgia patients.

Numerous studies have shown that CON laws raise healthcare costs for consumers without protecting quality or access for consumers. The pandemic has reinforced that an “elective” surgery may still be a vital one. If the needs of patients won’t take precedence during a pandemic, when will they ever?

[Chris Denson is Director of Policy and Research at the Georgia Public Policy Foundation. Established in 1991, the Foundation is a trusted, independent resource for voters and elected officials. The Foundation provides actionable solutions to real-life problems by bringing people together.]