Tag Archive for: certificate-of-need

Building Boom: Free From Regulation, New Hospitals On The Rise In South Florida

Scientists arabic team at modern hospital lab, group of doctors

Two years after the Legislature dissolved rules that restricted the opening of new hospitals and major bed expansions at existing ones, changes to the health care landscape are taking shape.

The rollback of the Certificate of Need (CON) law creates growth opportunities for health systems that could lead to big capital spending on construction and medical equipment, while boosting access to health care in neighborhoods without enough providers.

Several local hospital systems are already considering expansions with new facilities.

However, the question is whether the new hospitals will improve the health care system or only add to the higher costs that are making insurance coverage more expensive for many companies. Some critics warn that employee bidding wars between expanding health care systems could drive up costs.

What shouldn’t be overlooked is that removing the CON requirement will allow existing hospitals to expand their bed count, which is less expensive than building new hospitals, said Ray Berry, CEO of Cooper City-based Health Business Solutions, which helps hospitals deal with claims.

He doesn’t expect new competitors to enter the Broward County market because they would be at a disadvantage when negotiating with insurance companies that have established hospital partners there, said Berry, a board member of the North Broward Hospital District, which governs Broward Health.

With all the residential development in Fort Lauderdale, Broward Health Medical Center should eventually grow to accommodate the population, he said.

South Florida already has plenty of beds to accommodate its population, so new hospitals could end up lowering bed occupancy rates for other hospitals, said Salvatore Barbera, associate director of the health care administration program at Florida Atlantic University’s College of Business.

Instead of lowering prices to compete for patients, hospitals may end up raising prices to cover their operating costs with fewer patients, he added.

“It’s probably going to stir up the market, and you may see some failed operations as a result,” said Barbera, a former hospital CEO.

 

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Florida House Readies Renewed Push On Hospital Regulations

While the Republican-controlled House is taking aim again at Florida’s certificate-of-need laws, a top state official testified this week that many new hospitals are going through the existing regulatory process with little problem.

Florida is one of 35 states that have laws designed to require health-care providers to justify the need for certain types of new facilities and services. Some GOP lawmakers, including House Speaker Jose Oliva, R-Miami Lakes, have argued that such regulations unnecessarily drive up the cost of health care by artificially restricting the market and maintain that the state should take more of a “free market” approach to health care.

Molly McKinstry, a deputy secretary for the Florida Agency for Health Care Administration, told House members that in recent years most new hospitals have gone through the state’s current process without getting bogged down in regulatory fights. Those fights, which often include a hearing before an administrative law judge, can drag out for one to two years.

McKinstry said 25 acute-care hospitals received initial approvals over the past seven years. Of those 25 hospitals, 13 were approved without competitors challenging the certificates of need backed by regulators. Nine other hospitals were ultimately approved, and only three did not receive the final go-ahead.

Florida has scaled back its certificate-of-need laws several times over the last two decades. Rep. Cary Pigman, an Avon Park Republican who chairs the House Health Market Reform Subcommittee, told members of his panel that they can expect another CON rollback proposal during the 2019 session, which starts March 5.

While Oliva has sounded off on what he calls the “hospital industrial complex,” his counterpart, Senate President Bill Galvano, R-Bradenton, has been more cautious, urging against complete deregulation of the health care market.

House leaders in recent years have repeatedly called for eliminating or scaling back certificate-of-need laws, which also apply to such thing as building nursing homes. The effort also had support from former Gov. Rick Scott but ran into objections in the Senate.

The issue has divided the hospital industry in the past, with some hospitals favoring changes in the CON process and others opposed. Also, the Florida Health Care Association, a major lobbying group for the nursing-home industry, has made maintaining the CON process for nursing homes a priority for the 2019 session, according to information posted on its website.

McKinstry’s hospital figures didn’t include the last round of CON preliminary approvals that were announced in December. In an unusual move, the Agency for Health Care Administration approved eight CON applications for new hospitals, The state approved two new hospitals in Miami Dade County, a 100-bed acute care facility planned by the Public Health Trust of Miami Dade — which operates the Jackson Health System — and an 80-bed facility planned by a subsidiary of its competitor, the Hospital Corporation of America.

The agency also approved competing CON applications for new hospitals in Seminole and Orange counties.

Source: News4Jax

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