Podcast 002: Dr. Marshall Kapp - Deregulation of CON in Florida

With the Florida House recently passing a bill that would eliminate the Certificate of Need (CON) process in Florida and the bill now on deck in the Senate, I think it is important now more than ever for the public to have a good understanding of the possible implications this deregulation could have. Tune in to my podcast as I discuss CON with Dr. Marshall Kapp and hear his opinions on the topic.

Dr. Marshall Kapp is the Director of the Florida State University Center for Innovative Collaboration in Medicine & Law, and a faculty member at the College of Medicine and College of Law. He is a member of the American Medical Directors Association Foundation, Scientific Council, and the editor of the Journal of Legal Medicine, a publication by the American College of Legal Medicine. He is an expert on the Certificate Of Need Program (CON), and has co-authored the Healthcare Foundation of South Florida’s study on the need for CON in Florida.




 Key Takeaways: [:25] This episode's topic is Certificate of Need — Deregulation in the State of Florida. [:56] What is the Certificate of Need Program (CON)? [1:36] Read more about John's perspective on the deregulation of the CON at his blog. [1:48] Today's guest is Dr. Marshall Kapp and he will be sharing his view on the CON. [2:53] What is Marshall's opinion on Certificate of Need from an academic, scholarly perspective? [6:16] What makes the healthcare industry different, that regulation is necessary, and competition is not necessarily a good thing? [13:26] What would a deregulated Florida look like for the healthcare consumer? [18:00] Has Marshall seen the negative impacts of deregulation play out in other parts of the country? [19:30] John strongly believes that everyone in the community deserves access to the best, most affordable healthcare, so he advocates for legislators to put down the CON Deregulation Legislation. You, too, should reach out to your legislators and make your voice heard! Mentioned in This Episode: Inventing Health with John Couris Inventing Health on iTunes John Couris on LinkedIn

Access: Denied!

I have spent the last several weeks talking about the negative effects of the potential deregulation of the Certificate of Need (CON) program in Florida. As I have previously mentioned, CON, a regulatory process that requires health care providers to obtain state approval before offering services in Florida, will be decided in the upcoming legislative session. 

This is not good news for our community. CON has the potential to dramatically increase health care costs, as well as lead to a significant decrease in quality of health care across Florida. It also has the potential to dramatically decrease access to quality health care that members of my community currently enjoy.

If CON were to go away, we would be left with a community where boutique health care businesses move in and offer only profitable services, instead of balancing these with vital services the community needs. This shift in health care would leave patients with fewer options because community hospitals would no longer be able to afford to offer many of the services they currently provide.

You see, the repeal of CON would mean that many patients would find themselves with fewer options for certain acute care services as community hospitals would no longer be able to afford to provide them. These hospitals would be forced to spend most their resources to provide services (the ones that are the most unprofitable) to patients without insurance or the inability to pay. At the same time, community hospitals would see a loss in market share (and thus revenue) of profitable medical services to these new specialty-medical practices that will flood the market post CON - leaving little room for necessary (albeit unprofitable) services and procedures. In Pennsylvania, state health analysts observed a serious decline in general acute care hospitals in the 10 years (1996-2005) after the state ended its CON law. At the same time, there was a dramatic increase in ambulatory service centers.

Finally, the deregulation of CON would hamper Jupiter Medical Center’s ability to provide community benefits like the $7 million we invested in Diabetes education, nutrition services, mammography screenings, wellness classes and support groups in 2015. A decrease in revenue that would come with deregulation could prevent us from providing the services our community needs and limited our neighbors’ access to these types of invaluable services.

I strongly believe that everyone in our community deserves access to the best, most affordable health care. So, I continue to advocate for our legislators to put down this legislation, convene a working group of health care leaders, physicians, medical professionals and patient advocates and work toward providing the highest quality and most affordable health care for this State’s most precious resource - Floridians.

If you are concerned about how the deregulation of CON and specifically, Senate Bill (SB 676) or House Bill (CS/HB7) will affect your access to high quality and affordable health care, I encourage to reach out to your legislators and make your voice heard.

Like what you read? Want to keep in touch? Please connect with me on LinkedIn.

Nobody in the middle of a heart attack shouts, “Let's go shopping!”

   

As many of you know, I have been doing a lot of reading and research surrounding this issue of the deregulation of the Certificate of Need (CON) and have been writing extensively about the reasons why the legislature here in Florida should not repeal the program. Recently, the State Senator Rob Bradley introduced legislation (SB 676) to repeal CON in Florida and House members Miller and Renner subsequently offered a companion bill in the House (CS/HB7).

As I argued in a recent post, No Place for Health Care in a Free Market Economy, health care does not operate in a free market space. Therefore, the benefits of deregulation do not apply to health care as they do, say, in the airline industry.

I recently came across this clever 2014 “listicle” by Merrill Goozner from Modern Healthcare which gives a Late Night with David Letterman “Top 10” send up of the reasons why health care is not a free market. I found his list to be fairly spot on and worth sharing. Here is a recap of his list:

10. “Most care is delivered locally and will remain that way.” This is his way of explaining that competition by foreign competitors, which can affect price, does not really exist in health care.

9. “Physician assistants, nurses, lab techs and other specialized personnel labor under overly restrictive licensing laws” and thus, the workforce is not easily replaceable.

8. “Doctors belong to professional guilds” which limit access to the profession and establish licensing protocols regardless of cost.

7.  “Pharmecutical and medical device firms use patent monopolies” which equates to very high prices.

6. “Most non-routine healthcare is delivered by not-for-profit charities.”

5. “Comparison shopping is complex for patients, as well as confusing and nearly impossible, because outcomes are variable, success isn't guaranteed.”

4.  “The law says no one can be denied healthcare when needed.”

3. “Patients, even those in high-deductible insurance plans, pay for only a fraction of the cost of healthcare.”

2. “Insurers can pass along all costs in the form of higher premiums”

1. And the number one (1) reason why health care is not a free market . . . .“nobody in the middle of a heart attack shouts, “Let's go shopping!”

Again, if you are concerned about how the deregulation of CON and specifically, Senate Bill (SB 676) or House Bill (CS/HB7) will affect your access to high quality and affordable health care, I encourage to reach out to your legislators and make your voice heard.

Like what you read? Want to keep in touch? Please connect with me on LinkedIn.

To CON or not to CON

I recently returned from Tallahassee, where I made a presentation to the Florida House of Representative’s Health Innovation subcommittee on the potential deregulation of the Certificate of Need (CON), here in the State of Florida. 

For those outside of the industry, the Certificate of Need program is a regulatory process that requires certain health care providers to obtain state approval before offering new or expanded services. The CON program in Florida regulates the construction of new hospitals, hospices, skilled nursing facilities, and care facilities for the developmentally disabled, as well as certain hospital services.

The deregulation of CON is a hot topic in the health care sector and while there is not currently a bill in front of lawmakers, legislators are weighing the pros and cons of maintaining the practice. I felt it was important for them to hear from those directly involved in providing care to Floridians.

As a health care provider, our goal at Jupiter Medical is three-fold: 1) to improve patient outcomes and the quality of care we provide; 2) maintain or, when possible, decrease cost; and 3) improve access to the services we offer. If we can do these things at the same time, then we are batting a thousand.

With this goal in mind, I have spent a lot of time studying the positives and negatives of CON deregulation. Research is all over the map regarding whether deregulation improves quality, lowers cost and increases access. There are those who believe that it will achieve these goals, while others feel it will have the opposite effect.

I am a strong believer in the free market system and understand that healthy competition can be good for business and consumers. This is not about competition - we compete every single day at Jupiter Medical Center. This is not about a free market economy. Free market economics does not apply to acute hospital care. We must take care of every patient that walks in the door. 

What the regulation of CON is about is what is best for the consumer. As someone who provides health care in a non-profit setting within a specific local community, and whose primary responsibility is to the people we serve, my recommendation is to continue Certificate of Need for acute care hospitals.

The deregulation has the potential to negatively impact the consumer in the following ways:

• Cost: It is true that with deregulation, we will see more hospitals come into the community. However, with the arrival of these new hospitals comes the likelihood that independent hospitals will get consolidated into larger health care systems. This will mean less choice and higher cost for the consumer. The reality is that larger hospital systems are reimbursed for the work they do at a significantly higher rate than independent nonprofit hospitals, which results in the consumer footing a larger portion of the bill.

• Quality: While I don’t believe there is a correlation between CON and quality, what is well-documented through extensive research is the fact that the more times a hospital performs a specific procedure, the more proficient it becomes and the better the outcomes. With CON in place, hospitals gain expertise in specific procedures due to increased volume among fewer hospitals.

• Access: With the deregulation of CON comes more hospitals which means more hospital beds. This also means more pressure to fill beds. In our community, we have plenty of beds and do not need more. Many of the hospitals in our region are operating at less than 60% capacity. Where additional access is needed is in the ambulatory and post-acute service markets - in everything from physical therapy rehabilitation centers to urgent care facilities to imaging facilities. This is why I support deregulation of CON for these types of services.

And so, for those consumers who want to ensure high-quality, affordable and accessible health care for themselves and their families, I encourage you to reach out to your elected officials and make your voice heard. 

Finally, I would ask government officials, health care leaders and those that have an opportunity to play a role in the future of health care in Florida, to think about what would be repaired - if anything - by deregulating Certificate of Need. Would changing Florida’s healthcare planning process through Certificate of Need improve health care for your community and constituents? I think you will find the answer to be no.