CON laws show Georgia’s dilemma in improving health care

Gov. Nathan Deal speaks at a ceremony marking an expansion of CTCA's Southeastern Regional Medical Center in Newnan, September 2014. (AJC Photo / Hyosub Shin)

Gov. Nathan Deal speaks at a ceremony marking an expansion of CTCA’s Southeastern Regional Medical Center in Newnan, September 2014. (AJC Photo / Hyosub Shin)

What’s the most interesting and consequential political fight in Georgia today? You’d have to try hard to beat the battle over certificate-of-need laws.

If that sounds dull, you should have been in the Department of Community Health’s board room Tuesday. Perhaps 200 people, including roughly half of the local lobbying industry, heard a series of hospital executives call one of their competitors a thief, while that competitor accused them of being liars.

Oh, the decorum of these goings-on prevented the actual words “thief” and “liar” from being used, but that’s what they meant. I’ll explain.

Certificate of need is a regulatory regime requiring private businesses to get state approval before opening a hospital or most any other medical facility. It is a mistake from the ’70s that, like many mistakes, originated in Washington, D.C.

Unlike many of Washington’s mistakes, however, the feds soon reversed course and disowned CON. The Federal Trade Commission, under both parties, has criticized CON as anti-competitive.

Yet, Georgia is one of three dozen states to retain CON laws. Which brings us to the fight.

In 2008, the Legislature amended the CON law to provide for a 50-bed “destination cancer hospital.” The goal was to accommodate a Georgia location for Cancer Treatment Centers of America, whose Southeastern Regional Medical Center opened three years ago in Newnan.

The new hospital had to get 65 percent of its patients from outside Georgia, accept Medicaid patients and provide indigent care. But CTCA no longer wants to be bound by that 65 percent cap or 50-bed limit and has asked DCH to create a rule allowing it to convert to a general hospital. Crucially, however, CTCA would not have to open an emergency room.

Other hospitals say this would allow CTCA to cherry-pick profitable, privately insured Georgia patients while they are stuck running loss-making ERs. Actually, they claim CTCA already fails to meet its Medicaid and indigent care obligations. (Thief!) CTCA in turn says the other hospitals are wrong about that. (Liars!)

If that’s as far as this fight went, it would be of limited interest and consequence. But it’s not.

For one, CTCA alone would benefit from this rule change. It smacks of giving CTCA an escape hatch from a deal it struck. But it could also set a precedent for future ad hoc rule-making to benefit politically favored companies.

If CON were the only anti-market aspect of health care, legislators could repeal it and fling open the doors to competition. Unfortunately, health care is so over-regulated that other bad laws would undermine any gains.

For example, one problem is Georgia’s high percentage of people who are uninsured or on Medicaid or Medicare. All three groups are money-losers for hospitals, which are closing in alarming numbers where these populations are most prevalent. That’s one reason Medicaid expansion is a false hope: The hospitals would merely lose less money. The plans sold on the HealthCare.gov exchange are little better from the hospitals’ perspective, since these newly insured patients too often can’t pay their high deductibles.

So, yes, we need to get rid of, or at least radically change, our archaic CON laws. But we have to think much more broadly than that.

RELATED: How to get genuine health reform for Georgia

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53 comments
DownInAlbany
DownInAlbany

The Georgia Hospital Association, backed by the 8-10 largest hospitals in the State, have used the CON laws to stymie any and all competition.  Phoebe Putney, in Albany, is a prime example.  They fought the other local hospital (Palmyra) for 10 years over their proposed Labor and Delivery unit.  Because of this, Palmyra ended up selling their facility to Phoebe Putney.  The strangle-hold that Phoebe had on the local healthcare market was solidified.

M H Smith
M H Smith

With a 52% increase in Medicare staring some Medicare recipients in the face next years you say Obamcare is going to do what?

Clue from some one I have dealings with in one of the area's major hospital's cancer care departments who warned me as I'm approaching being forced into Medicare from Obamacare: You're not going to like Medicare as much as Obamacare. Which is something I knew before this financial officer said it point blank.

Total healthcare spending in this country is around $3 trillion a year or about a third of the budget or about the same as the military's portion.


If you are one of the average Joes in this country, especially 55 years old or older you're not going to like the sound of socialism but when the day comes that Social Security you paid in starts coming back to you and you can't by healthcare in that market driven solution or high risk pools - highly under-subsidized - Demark and Bernie might start not to bad.

Take this one to the bank even a small "consumption tax" on Internet access and data transfer - about 640 Terabytes a day - will more than take care of healthcare costs for all citizen and legal resident we have in the U.S. Plus pay down the national debt. 



 

Dusty2
Dusty2

I don't understand how the cancer hospital got "special benefits".  Seems like requirements for the building of hospitals should be the same for all.  Emory's orthopedic hospital has no emergency room but is part of the major section in another part of town  which does have an ER. Don' t know how all that works.


As for getting more Medicaid funds from Washington, that  is just another way to squeeze the US taxpayer into higher taxes. This country is already "up to its knees" in debt.  Let us think how to economize with better methods and plans. 


It will take a lot of "conferences" I think.   And we better hurry.  OBAMACARE is enough to make people really sick!. The deductibles are destructible!!  . 

M H Smith
M H Smith

@Dusty2

State health officials wouldn’t comment, but the community hospitals that fought against CTCA questioned the approach, saying that’s not how they demonstrate their own charity care commitments.

Because the cancer hospital attracts most of its revenues from out of state patients, it would have to spend much more on uncompensated charity care to reach the 3 percent threshold if those revenues were included in the calculation.

The cancer hospital’s reports also suggest it rarely served patients without insurance. For inpatients in 2013, the hospital’s report shows that 91 percent of its admissions were for patients with private insurance, and nearly 8 percent were Medicare. Less than 1 percent were self-pay — which is how most hospitals categorize uninsured patients.

The hospital confirmed that only six uninsured patients were admitted. “The remainder of the completely uninsured/charity patients were outpatients,” the hospital said.

...

 

What a laugh.  Play by the same rules or lose your rights to do business in Georgia.

LogicalDude
LogicalDude

Just have CTCA have a threshold of a percentage of Medicaid patients.  Require them to take indigent care and not just well-insured patients. 

Also, have Deal actually get Medicaid expansion in the state. That lapse in coverage hurts the state even more.  


And saying that Medicaid expansion would cause hospitals to lose money slower, that would mean that many hospitals stay open.  "That’s one reason Medicaid expansion is a false hope: The hospitals would merely lose less money."

It would still be good for the people of Georgia. That's a no-brainer, but for some reason, conservatives are against this common-sense item. 


Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "And saying that Medicaid expansion would cause hospitals to lose money slower, that would mean that many hospitals stay open."

Ah yes, the "make a profit (or just break even) by losing money slowly instead of quickly" business model.

These hospitals are going to close unless we can find a way to change the way they are used, which means making reforms along the lines I described to MHSmith in two comments below. And if you'll read that, you'll see other reasons, besides slowly dying hospitals, that the "good for the people of Georgia" thing is way overrated when it comes to Medicaid expansion.

It is not "good for the people of Georgia" to have a system that provides "insurance" that in practical terms means people can't find doctors and resort to visiting ERs for common ailments, which manages the incredible feat of costing the state more money than necessary while also shortchanging the hospitals, endangering more hospitals and spinning the vicious cycle one more turn.

Hedley_Lammar
Hedley_Lammar

@Jefferson1776 @Kyle_Wingfield @LogicalDude  "And saying that Medicaid expansion would cause hospitals to lose money slower, that would mean that many hospitals stay open."


You assume what Kyle says here is gospel. It isn't.


We know for a fact states that have expanded medicaid have had far fewer hospital closings. 

LogicalDude
LogicalDude

@Kyle_Wingfield @LogicalDude You make good points, but it seems the solution is: Medicaid needs more money to pay doctors or care centers the right percentage so that patients aren't turned away. 

Turning away Medicaid funds because Medicaid sucks isn't the right response either.  It just comes across as "So sorry you were being screwed on Medicaid. We'll screw you more by not giving you Medicaid. "


Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude ""So sorry you were being screwed on Medicaid. We'll screw you more by not giving you Medicaid. ""

There is not a single person, or group, to whom your "you" could be addressed. You're conflating several things here in a way that sounds nice but reflects nothing real.

LilBarryBailout
LilBarryBailout

@LogicalDude 

Georgia should continue to avoid screwing Real Americans by refusing to get hundreds of thousands more hooked on tax payer handouts (Medicaid).  If you want substandard government-quality health care paid for by someone else, move to Ohio.

M H Smith
M H Smith

@LogicalDude 

It would still be good for the people of Georgia. That's a no-brainer, but for some reason, conservatives are against this common-sense item. 


When it comes to healthcare you are absolutely right.  

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar LOL, OK that's why the hospitals consistently said during the hearing that the problem with CTCA's requested rule was that they would be left with all the uninsured, Medicaid and Medicare -- always lumped into the same group, since they lose money on all of them -- and why they will tell you they were better off with the old system of reimbursing safety-net hospitals (disproportionate share payments) than if we expanded Medicaid.

But please, go on with your wholly ideological, fact-free "analysis."

M H Smith
M H Smith

@Kyle_Wingfield @Hedley_Lammar 

As though the reimbursements were ever enough, according your opinion perhaps. I not buying it, if so, let CTCA do business with those same reimbursements and take on the same patients under the same old rules.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar I'm sure they don't prefer those patients but they prefer them to empty beds.


You continue to ignore the FACTS right in front of your face


Stare that did not expand medicaid have a FAR greater rate of hospital closings. This is not even in dispute.


That isn't just a coincidence Kyle and you damn well know it. 

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar " FAR greater rate of hospital closings"

You have established nothing concerning the rate of closings. Here's a hint: 2 in one state and 1 in another does not tell us the rate was higher in the first.

LilBarryBailout
LilBarryBailout

It's just pure coincidence that health care costs and government interference are both increasing.

Repealing the CON law can only help.

And thank you, Governor Deal, for doing your part to protect Real Americans from the budget-busting effects of Obamacare.

M H Smith
M H Smith

@LilBarryBailout 

Military spending doesn't bust budgets? Education spending doesn't bust budgets? Pension plans don't bust budgets? 

Hooey

TicTacs
TicTacs

You offer no real solutions, or even try. It won't be free and some people won't change,  but they will get sick.


RafeHollister
RafeHollister

Well said Kyle, this CON has been like the alcohol beverage distribution law, just another way the legislature enriches those already in the taxpayer to politicians to donors and friends of said politician, and back to the politician pipeline.  The CON has resulted in all of SW GA becoming a Phoebe Putney monopoly, buying, owning or closing, all the small hospitals, forcing every patient to receive care on their terms.  It is just more big government crony capitalism and corruption.


Here are the only two options I see, get money out of politics or have term limits.  I don't think you could ever eliminate money from politics as the Constitution allows us to give money to those who wish to run and someone would find workarounds, legal or illegal for that.  Term limits would work, but you can't get the politicians to pass those as they like the money, power, and influence.   Most new office holders enter office as honest folks, but are quickly corrupted by the money, so don't leave them there long enough to get corrupted.


Kyle_Wingfield
Kyle_Wingfield moderator

@RafeHollister "Term limits would work"

We already have de facto term limits at the Gold Dome. Half of all Republicans (House and Senate) were first elected in 2010 or later; for the Dems, it's 2008 (House) and 2007 (Senate). So, half of our legislators have been there less than a decade. Just 13 out of 236 have been there at least 20 years, and they aren't the ones leading the chambers.

In fact, I would argue this kind of turnover -- for a part-time body that deals with such a wide range of issues -- is a contributing factor to the power of lobbyists and bureaucrats. They're the only ones who know how everything works.

Point
Point

@Kyle_Wingfield @RafeHollister So why don't we get rid of lobbyists?  The average citizen has no advocate as we are too busy working 2 or more jobs just to make ends meet.

RafeHollister
RafeHollister

@Kyle_Wingfield @RafeHollister It is a conundrum for sure.  Just repealing the CON, if that could be accomplished, is a first step, but the bureaucrats and lobbyist will find other ways to limit competition and with money can buy some legislative accomplices.  Once you find a way around the corrupt legislature, you then have to find county commissioners and city officials who aren't already the property of the establishment medical industry.  Power corrupts and it is almost impossible to fight.

Kyle_Wingfield
Kyle_Wingfield moderator

@RoadScholar No, campaign donations are not bribery. That doesn't mean we shouldn't scrutinize elected officials' actions and point out possible conflicts of interest.

Heck, I would allow unlimited donations, but require a) instant, public disclosure (within 24 hours) and b) every bill introduced to include an addendum listing all the bill sponsor's donors who could benefit from it.

STHornet1990
STHornet1990

Of course this is a special interest issue. That's what the folks under the Gold Dome do best. Cover for the specials.

And another issue brought up, if the so called over-reaching feds decided long ago CON was a bad idea, why has this anti-fed state held on to it for so long?

Kyle_Wingfield
Kyle_Wingfield moderator

@STHornet1990 I think your first paragraph answers your second paragraph.

And before you go on to say this is only a GOP problem: I got an email about my column yesterday from a former legislative aide under the Democrats recalling the time Speaker Tom Murphy filed a bill to repeal the entire code section containing CON and got routed in committee because the doctor/hospital lobbies fought it so fiercely.

This is one example of how things haven't changed so much since 2003.

M H Smith
M H Smith

Well, I don't want to "do away with" them, hence I didn't say so.

Then say what you mean or put forward what you would replace it with because I'm tried of all fence straddlers.

I can see now I'll be voting against the GOP for a long time. They are going to kill a great number of people just as sure as if they lined up and began shooting the down.  

 

Kyle_Wingfield
Kyle_Wingfield moderator

@M H Smith I have long said you have to fix Medicaid before thinking about expanding it.

I wasn't on the blog yesterday because I spent all day at a conference hearing about various issues, including health care. Here's an excellent example of why Medicaid doesn't work.

There are a number of "minute clinics" and urgent care clinics that have popped up around the country (I originally wrote "state" but then remembered the speaker was talking more broadly, so I'll err on the side of caution here). They generally charge half of what a GP doctor would charge for an office visit to do the same thing (treat a sore throat, cold, etc.). But Medicaid will only reimburse half of that lower charge, so those clinics generally don't accept Medicaid patients. Therefore Medicaid patients are forced to see a GP -- or, at least, to try to see a GP, but they often can't because so many GPs don't take Medicaid because the reimbursement rate is too low for them, too. So you end up with people going to ERs, which have to take them, for relatively minor ailments.

Is that the kind of program you want to expand? I'd rather fix it, see where we stand, and then talk about expansion.

Kyle_Wingfield
Kyle_Wingfield moderator

@M H Smith Another example from yesterday: A charity-care network that has a goal of serving 1 million uninsured Georgians, operating in every county, per year while saving the state $1 billion per year. Sound like fantasy? Well, it's currently at 325,000 in 130 counties, saving the state an estimated $400M: http://hinri.org/portfolio-projects/gccn/

Legislators should have a very good reason for not chipping in the $2.5M the clinics seek to operate for three years. Combine that kind of network with privately provided, catastrophic coverage for the Medicaid population -- which, of course, would require federal approval -- and we'd have something truly worth considering, unlike the system I described in the above comment.

M H Smith
M H Smith

@Kyle_Wingfield @M H Smith 

Improvement is not in question on anything or anywhere a real better solution is presented but a unhealthy population is a money losing proposition nothing short of a money-pit that will eventually drain you dry like a untreated cancer. 

Mandatory step processes are a good idea when it is something that doesn't require the ER. People need to understand what level of treatment is really needed and where best to go to receive it. Most of the time it isn't the ER on that we agree. 

However being penny wise and dollar foolish is not improving anything. AND don't forget casino gaming revenue from the data I've gather could pay for medicaid expansion.

The GOP needs to wise up or just disappear and let other more able leaders fill the role they obliviously cannot.      

M H Smith
M H Smith

@Kyle_Wingfield @M H Smith 

Kyle I have said the same in regards to fixing Medicaid before expanding it I even gave the means to raise the money via a gaming tax which  is a consumption tax the individual can control by their own choosing. 

Now onto the rest of your market driven nightmare. Mini clinic have a place but that place is not primary care or a GP. I know you pay more to see a primary care doc but they provide a great deal more care and preventive medicine e.g. Hypertension is not something no one should go to a mini clinic doc for treatment. In fact even for anti-antibiotics you should go to a primary care doc in follow up to mini-clinic care or Urgent care. Primary care or the regular family GP needs to manage your treatment otherwise number of bad things can happen that would not have under manage care from Primary care or the regular family GP.

 Somethings in some cases you can shop for in advance and save a bundle but when time is limited medical treatment and the doctors are something you bargain shop.     

Kyle_Wingfield
Kyle_Wingfield moderator

@M H Smith From "sore throat" (me) to hypertension (you). OK, if that's what it takes to make your argument.

And when was the last time you went for a follow-up appointment after taking an antibiotic?

M H Smith
M H Smith

@Kyle_Wingfield @M H Smith 


Well if a sore throat you makes your argument, tell me, is a simple sore throat ever something that can be more serious than you think or something more than the mini-clinic might mis-diagnose, like a throat cancer, Dr. Wingfield? 


As for my following up on the advice of a MRI technician telling to see a Nephrologist my Oncologist recommended, about two weeks in total .


Stage 2 Renal which for a man my age is pretty good as most of the same age are stage 3 or worse according to the Nephrologist 

Oh and I have followed up seeing my Primary Care after a treatment of antibiotics when the infection was still present.   

Kyle_Wingfield
Kyle_Wingfield moderator

@M H Smith I would feel pretty confident about my 6-year-old not having throat cancer. If it lasted more than a week or so, maybe I'd consider going to the GP.

Of course, I have private insurance, so I don't have trouble finding a GP who will see my son. You may recall that, at the beginning of this thread, one of the points I made is that Medicaid patients do have trouble finding doctors who will take them.

M H Smith
M H Smith

I'll go along with getting rid of the CON laws in exchange for these stand alone CTCA having to play by  the same rules as the Hospitals do which means take in the numbers of indigents care, charity care  Medicaid and Medicare patients in proportion to that the Hospital accept.

Otherwise Kyle, call this a Rhett Butler moment for any and all who hold your immoral inhumane mind set!

The one that says if you can't pay for it, just damn die.    

Hedley_Lammar
Hedley_Lammar

That’s one reason Medicaid expansion is a false hope: The hospitals would merely lose less money.

That isn’t false hope. It’s often the difference between keeping the doors open and not.

A state's decision to forgo Medicaid expansion affects the staying power of hospitals in rural areas. The map below compares recent rural hospital closures in Medicaid expansion states against closures in states that have not expanded Medicaid. As the map shows, non-Medicaid expansion states have had more hospital closures in rural areas.


http://familiesusa.org/product/medicaid-expansion-and-rural-hospital-closures


We are 5th highest in the country in uninsured rates. Simply shameful.


http://www.politifact.com/georgia/statements/2014/feb/03/raphael-warnock/ranks-uninsured-high-georgia/

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar Your graphic tells us nothing about how many rural hospitals a given state has, what other facilities are present in those communities or nearby, what percentage of residents are on Medicaid, etc., etc., etc. It is, as I stated, a context-free attempt to establish correlation, and even that correlation has more holes than a golf course.