Tag Archive for: con

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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House Republicans Push To Give Hospitals Greater Say In Expansion

hospital expansion

For four decades, hospitals wanting to expand or open new facilities have had to get the state to agree there’s a need for more healthcare in their community.
It’s a rule that Republicans in the Florida House say creates unnecessary burdens on the free market. This week, they’ll be passing a bill to repeal it.
But opponents of the repeal worry that allowing hospitals to build beds wherever they want will encourage health facilities to build in wealthy areas, leaving poor communities with limited options and safety net hospitals strapped for cash.
Legislation (HB 7) to repeal the regulations, called certificate of need (CON), is expected on Wednesday to pass the Florida House, where it is a priority of Speaker Richard Corcoran, R-Land O’Lakes. It also has the endorsement of Gov. Rick Scott, who called it one of his top healthcare priorities this year.
Supporters of repealing CON say the bill eliminates regulations that limit hospital beds in a community, stifle competition, inspire costly legal fights over hospital construction and raise healthcare costs.

“Removing it will eliminate a lot of these unnecessary barriers to entry,” said Rep. Alex Miller, R-Sarasota, who is sponsoring the repeal legislation in the House.

But the legislation’s odds appear slim. Similar bills in the Florida Senate have not had a single hearing.
That’s good news for Democrats in the House. Rep. Evan Jenne, D-Dania Beach, called it “one of the worst bills this session.”
Democrats and others say getting rid of CON is unnecessary and might reduce the quality of care by overcrowding the market.

“Won’t repealing CON create a two-tiered system: One for the insured living in wealthy areas and one for uninsured in low-income areas?” said Rep. John Cortes, D-Kissimmee.

The state’s safety net hospitals oppose repealing CON for exactly that reason.
They worry about getting stuck with large numbers of patients on Medicaid, who pay less than the cost of care provided, or who have no health coverage at all.
But Miller says safety net hospitals like Jackson Health System, Tampa General and Johns Hopkins All Children’s get incentives to take on charity care cases with extra Medicaid funding.
What’s more, she doesn’t expect too many new hospitals to open.

“There’s not a big appetite to build new bed towers,” Miller said. “They’re very expensive. They cost $1.5 million per bed, so often they can be $100 million or $200 million just to build a bed tower.”

Thirteen states have taken CON off the books already, and proponents say the effect has been minor in hospitals. States with the restrictions have just 13 percent fewer hospital beds than those without the restrictions.
Source: Miami Herald
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