Familiar feud: Healthcare lobby resists changing law that regulates competition

By David Pendered

Doctors and health care executives can’t agree with lawyers, farmers and business owners over how to update a law that oversees the expansion of health care facilities in Georgia. This is a major part of the impasse that’s to be resolved if the General Assembly is to enact reform before the session ends in two weeks.

Gordon, dome

The healthcare lobby has again squared off with others in the debate over a state law that regulates competition among facilities. File/Credit: David Pendered

Two major proposals to revise the state’s Certificate of Need law remain on the table. If provisions of either are to be enacted this year, they will be cobbled to a bill already approved by the House or Senate. Such grafting is not atypical.

The heart of the issue is a certificate issued by the state Department of Community Health. DCH issues the Certificate of Need after confirming that a proposed new or expanded hospital or facility, or major service, is needed. Competing facilities have a right to object to new or expanded facilities. The Trump administration in December 2018 called for greater competition it says will improve pricing and quality of service.

The healthcare community evidently spoke through a Senate committee that delivered recommendations on revising CON. The recommendation was for years of additional study. Doctors or health care administrators were required to fill at least nine of the 13 slots on the Senate Study Committee on Certificate of Need Reform, according to the legislation that created the panel, Senate Resolution 1063.

The House Rural Development Council was not required to include any doctors or health care administrators. Its recommendation was to foster competition. House Resolution 389 authorized the House Speaker to appoint 15 members to the council. The mandate did not mention the Certificate of Need law, but did empower the panel to consider challenges facing rural areas that can include, “deficiency in access to health care.”

Georgia’s CON battle is playing out in the light of a call by the Trump administration for states to, “repeal or scale back Certificate of Need laws.” The report issued Dec. 3, 2018, Reforming America’s Healthcare System Through Choice and Competition, observes:

  • “While American consumers and many providers would significantly benefit from the reforms laid out in this report, there are entrenched and powerful special interest groups that reap large profits from the status quo. It will take bold leadership to confront these incumbents and implement reforms, but under your direction, we are convinced we can significantly improve the American health care system.”

Twelve states have discontinued their CON laws since the 1987 repeal of a federal mandate that required them as part of the deal to obtain federal funding, according to a report by the National Conference of State Legislatures.

The Senate committee was chaired by Sen. Ben Watson (R-Savannah), a doctor who practices internal medicine and is affiliated with SouthCoast Health.

The committee’s report noted that the House Rural Development Council had released a report, “recommending a complete repeal of all CON laws.” The Senate had no such plans, opting instead for, “a more middle grounded approach.”

Committee member Sen. Dean Burke (R-Bainbridge) is the lead sponsor of the bill that grew out of the committee’s recommendations, Senate Bill 114.

SB 114 calls for continued review of the CON question by a Health Strategies Council that’s expected to work for years – members are to be appointed to four-year terms and the council is to file annual reports.

Burke, a doctor, practiced women’s health until 2013. That year he was named chief medical officer/medical director of Memorial Hospital and Manor, in Bainbridge. In addition, since 2016 Burke has chaired the board of Stratus Healthcare, according to reports including his profile on linkedin. Stratus is the largest alliance of healthcare providers in the Southeast and became an affiliate of Emory Healthcare in 2016, according to a statement from Emory.

The House Rural Redevelopment Council had two co-chairs, as stipulated in the legislation – Rep. Terry England (R-Auburn), a farmer/agribusinessman, and Rep. Jay Powell (R-Camilla), a lawyer.

The committee issued a report that called for the state to “revolutionize” the health care delivery model and compel the system to reveal more about its revenues and expenses. The report called on the state to shift from:

  • “[T]he current restrictive, regulatory Certificate of Need model to an accreditation and licensing process for hospitals that recognizes and encourages care outcomes. In addition, there is a lack of transparency for financial and community standards of care that must be addressed to promote equitable competition and ensure that tax dollars, tax credits, and tax exemptions are being used appropriately to subsidize care being delivered in non-profit hospitals.”

The bill that resulted from the committee’s work, House Bill 198, was sponsored by committee member Rep. Matt Hatchett (R-Dublin), a small businessman. Among other measures, the bill would eliminate the requirement for a CON certificate to be issued before certain expansions are made, and eliminate the ability of hospitals to try to block a CON from being issued to a competitor if the hospitals are farther than 35 miles apart.

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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