(WGHP) — A lot of North Carolinians have heard of certificates of need but few understand what they are or how they came about.
Don’t blame yourself. It started a long time ago. Even the people who deal with it on a daily basis understand that it’s all a bit “down in the weeds,” but it affects the lives of just about all of us often in a serious way.
So let’s start with what it is. Here’s how John Locke Foundation analyst Jordan Roberts describes it:
“Certificate of needs are basically permission slips from government that a healthcare facility would need to apply for to get permission to build or expand new beds or get newer equipment,” Roberts said. “Essentially, it’s a gatekeeper to keep the supply at what a state board deems is needed for a certain area. The thinking was: if we keep the supply low, then the overhead costs passed on to patients would be low as well. Since (these laws were first mandated), a lot of states have repealed their certificate of need laws.”
That beginning for North Carolina was 1971 when the general assembly passed its first version of a certificate of need law to try to reign in what appeared to be runaway healthcare spending. Congress required states to have some kind of certificate of need regulation. By 1980, every state except Louisiana did, and it soon followed to make it unanimous.
By 1986, Congress began to rethink whether the CoN requirement was really wise and rescinded its mandate. By the end of the decade, 19 states (nearly 40% of states) had either repealed or reduced the regulations in their CoN laws.
Jordan Roberts believes that was the wise course of action.
“We think the people on the ground, the healthcare entrepreneurs, people that are seeing patients, they understand the need in a local community better than bureaucrats in Raleigh,” Roberts said.
Cody Hand sees it a bit differently.
“It’s a good thing because…the safety net of North Carolina’s healthcare system is built with CoN as one of the platforms upon which they’ve built it,” Hand said. “So every North Carolinian is within an hour of whatever care they need. We credit the CoN law with making sure that’s available.”
It looks like something of a we said/they said issue with both sides providing data to back up their arguments. The problem is that with the various CoN laws and regulations varying from state to state, it’s difficult to compare the results with much confidence. But Cody Hand, senior vice president at the North Carolina Healthcare Association, has numbers he believes in.
“North Carolina has more access to healthcare services — hospitals, ambulatory surgery centers and physicians– than no-CoN States,” Hand said. “From (healthcare consultant) Ascendient’s studies: high/moderate-CoN states and North Carolina have better access to healthcare services than no-CoN states, as measured by median values, with high-moderate-CoN states having more than double the number of Medicare-certified ambulatory surgery centers and physicians per 1,000 square miles and nearly double the number of hospitals per 1,000 square miles. North Carolina’s hospital and Medicare-certified ambulatory surgery center density are each more than double the median values of no-CoN states. Additionally, North Carolina’s physician density is more than triple the no-CoN median.”
Roberts points to reports in The Journal of Healthcare Finance that say costs are 13.8% higher in CoN states than those without the regulation. He also provided a George Mason University study that says access to healthcare is significantly reduced by certificate of need states. Some areas tend to have healthcare monopolies.
“We think it leads to a lot of consolidation of healthcare,” Roberts said.
Not surprisingly, Hand looks at it differently.
“North Carolina’s bed distribution is also more equitable across mid-sized communities than no-CoN states. North Carolina’s bed distribution skews toward suburban communities while no-CoN states skew to large urban areas and secondarily to rural suburban areas,” Hand said.
The debate continues, but there seems to be momentum in the General Assembly to at least modify the state’s current CoN law.
See all this in this edition of the Buckley Report.