State’s role in approving additional hospital beds could end this year

When someone wants to build a new hospital or nursing home in Florida or add beds in an existing facility, the state must agree that the community in question has a need for expanded healthcare.

It’s a regulation meant to ensure that poor and rich communities alike have equal access to hospitals, hospices and other health facilities. But at $10,000 to $50,000 per application, it’s also costly and can lead to lengthy, even pricier lawsuits.

Republican state lawmakers are working to repeal the regulation this year. On Wednesday, a Florida House subcommittee approved legislation (HB 7) to repeal those regulations on an 11-5 party-line vote.

The three-letter acronym by which the rules are known — CON, or certificate of need — has been a heated topic for years in Tallahassee. But Sen. Rob Bradley, R-Fleming Island, who is sponsoring a repeal bill in the Senate, says the rules limit competition.

“There are some of these other proposals that are described as increasing access in healthcare that I fear have the potential of impacting quality if not properly implemented,” Bradley said. “I look at the CON issue and see that as improving access but not adversely affecting quality.”

Bradley, House sponsor Rep. Alex Miller, R-Sarasota, and Gov. Rick Scott see an ideal world where health facilities can open wherever they see an opportunity to make money, much like a theoretical free market. Scott, a former hospital executive, last month identified the repeal as one of his top priorities for the upcoming legislative session, which begins March 7.

“We’ve got an outdated certificate of need process,” Scott said. “[Ending it] would help improve quality. It’d also control price and increase access.”

Still, Wednesday’s vote came after more than an hour of debate and public testimony in which nursing home operators, hospices and hospitals warned that repealing CON would harm healthcare in Florida.

“Repealing CON could create a two-tiered health system in Florida,” said Clint Shouppe, who represents BayCare Health System. “One for patients with good-quality insurance and one for Medicaid and charity care patients.”

Hospitals offset the costs of charity care patients and low Medicaid rates with patients who have private insurance. And Shouppe said he worries that new hospitals could open intending to treat only those whose health plans can pay full price.

Nursing home operators outlined their doomsday scenario, pointing to other states that have repealed CON and faced bad outcomes. In 2015, Indiana state lawmakers were forced to pass a moratorium on new nursing home construction after too many facilities opened their doors in the wake of that state repealing its CON laws.

Several repeated a fear that an explosion of hospices and nursing homes could lead to unfilled beds and not enough money to provide quality care.

But Miller and Bradley say their legislation has licensing safeguards to prevent those problems and are confident that competition would drive down prices.

Republican lawmakers have proposed ending the requirement, first passed in 1973, in previous years. Last year, the House passed a repeal measure but the Senate shot it down amid fears that increased competition could lead to each hospital performing fewer procedures.

Politically, the Senate may be more likely to consider ending certificate of need this year because of a dramatic turnover in its membership: 20 senators are new to the chamber this year, and many of them made the shift from the House.

With a likely change to healthcare on the federal level as Republicans in Washington consider repealing and replacing the Affordable Care Act, Florida lawmakers say the state needs to start looking for creative ways to keep healthcare costs low.

“You have to be prepared for a new day in healthcare,” Bradley said. “I think in Florida we can be a leader in free-market approaches to healthcare delivery. An important part of that is making sure that if a market can support competition, that we don’t have unnecessary regulations in place to prevent that competition.”

This story was originally published February 16, 2017 at 7:44 AM with the headline "State’s role in approving additional hospital beds could end this year."