As we emerge from a global pandemic crisis that impacted every aspect of our lives, all industry sectors are evaluating lessons learned. Crisis response suddenly shifts our perspectives from siloed self-interest to coalescing community resources for the greater good. All of us were required to pivot quickly to navigate an unprecedented pace of change.
Interestingly, all levels of government immediately began to suspend regulatory restrictions that could impede pandemic response. Many of the restrictions temporarily lifted were specific to healthcare. Ironically, a pandemic crisis was necessary to empower healthcare providers to hyper-focus on innovative care delivery without regulatory hurdles.
Fueled by this new-found flexibility and tremendous advancements in health tech, care delivery has been dramatically enhanced in all settings. Healthcare providers are hoping they will be able to continue care innovation at this faster pace, rather than losing ground if regulations are reinstated. If the healthcare system served patients better with less regulation during a pandemic, should we not assume patients are better served in a less-regulated environment post-pandemic?
The Certificate of Need (CON) law was one such regulation suspended by South Carolina Governor Henry McMaster as the Covid crisis mounted “to expedite treatment for the [Covid] virus.” As the governor is only able to suspend the state CON law during an emergency, the March 2020 suspension order expired with the expiration of SC’s state of emergency declaration. However, growing momentum across the state to repeal the CON law is aimed at increasing healthcare access and lowering costs for consumers.
Officially, the intent of SC’s State Certification of Need and Health Facility Licensure Act (SC Code Section 44-7-Article 3) is to “promote cost containment, prevent unnecessary duplication of health care facilities and services, guide the establishment of health facilities and services which will best serve public need and ensure high quality services are provided in health facilities in this State.”
First appearing in 1962 and amended multiple times, the Act requires healthcare providers to obtain a Certificate of Need from the SC Department of Health and Environmental Control (SCDHEC) prior to building, expanding, or offering certain health facilities and services.
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In my experience, proponents of CON generally cite 3 concerns: cost containment; preserving healthcare access in rural communities and for at-risk populations in any community; and ensuring new facilities/services will have sufficient volume to hone and maintain provider expertise which improves safety and quality.
These concerns are appropriate. Nevertheless, maintaining CON does not effectively achieve those goals. SC healthcare costs vary dramatically among different facilities for the same services even within the same communities and across the state. The national focus on price transparency, surprise billing, and employers directly contracting with providers highlights that no existing regulatory mechanism, including CON, has adequately addressed cost.
Unfortunately, several rural hospitals have already closed in SC and quite a few others have been purchased by larger systems. CON has not mitigated that trend. Some also fear removing CON will proliferate for-profit healthcare entities that will “cherry-pick” patients who can afford care and decline to treat those who cannot. Certainly, any facility receiving federal or state assistance to offset care for fragile populations is accountable to do so; but this issue could be further addressed through facility licensing requirements, rather than CON.
Perhaps the most valid argument I have heard in favor of CON is ensuring high quality services by preventing unnecessary duplication of services. How are those goals linked? Healthcare providers agree that performing a high number of a particular procedure hones expertise. Informed patients do not choose a surgeon to perform a total knee replacement who has only done 10 of those surgeries in a year’s time. Many medical specialty societies have established annual procedure volume thresholds required to demonstrate clinical competence in those procedures. These guard rails are important, but they also can be administered through licensing requirements rather than CON.
The suspension of CON temporarily removed a care delivery hurdle in South Carolina during the Covid crisis.
Across the United States, CON laws have failed to live up to their intended purpose. According to a report by the U.S. Department of Health and Human Services, “The evidence to date…suggests that CON laws are frequently costly barriers to entry for healthcare providers rather than successful tools for controlling costs or improving healthcare quality.”
In recent years, the SCDHEC staff assigned to administer the Certificate of Need program have worked diligently to streamline the application and approval process. They are smart, rationale people who are genuinely concerned about healthcare delivery in SC, but they are bound by existing law.
Unfortunately, the process allows all applications to be contested by competing facilities. Without question, anticipated opposition, and the expense to counter it discourages many providers from pursuing a CON; thereby reducing access while also depriving SC’s healthcare marketplace of competitive forces that naturally regulate cost.
The suspension of CON temporarily removed a care delivery hurdle in South Carolina during the Covid crisis. Repealing it offers robust opportunities to further enhance care delivery. Let’s leverage the lessons learned during the pandemic by empowering healthcare providers to freely compete on quality, cost, and the patient experience without CON as a barrier to market entry.
AnnMargaret McCraw is the CEO of Midlands Orthopaedics & Neurosurgery Columbia, SC.
This article was originally published in RealClearHealth. You can find it in its original form here.