Carolinas Society for Healthcare

1
Lessons from Pennsylvania
CON
Paula A. Bussard SVP, Policy Regulatory
Services November 15, 2007
Carolinas Society for Healthcare Strategy and
Market Development
2
History of Pennsylvanias Certificate of Need
Program

• Established in 1979 with the
• enactment of the Health Care Facilities Act.
• 1992 amendments made several significant changes
  to the program, including requiring physicians to
  obtain CONs and establishing a sunset date in
  1996.
• Primary goal of CON program was to contain rising
  health care costs by avoiding unnecessary
  expenditures of capital.
• Secondary objectives of the CON program were to
  promote quality of care and access to care.

3
HAP Membership Views of CON Program

• Last time HAP membership polled on CON in 1995
• 78 said retain with changes
• 22 said repeal
• Key changes to the CON program hospitals wanted
• Include a deemed approval provision
• Ensure adequate staffing and resources at DOH
• Raise the capital threshold from 2 to 5 million

4
We have met the enemy and he is us.- Pogo
Pennsylvania CON program allowed to sunset by
General Assembly in December 1996.
5
Action on the Expiration of CON Program

• DOH conducted expedited review of current health
  care facility regulations in order to determine
  if any quality criteria used under CON program
  should be incorporated.
• In 1998, licensure regulations updated
• long-term care facility
• ambulatory surgery facility
• hospital-specific services open heart surgery,
  cardiac catheterization, organ transplantation,
  and neonatal intensive care.
• In 2005, DOH proposed draft health care facility
  licensure regulations for hospitals and
  outpatient services as a means
• of addressing equity.

6
Action on the Expiration of CON Program

• DPW felt sunset of CON removed important
  safeguard against unnecessary utilization and
  created risk of increased and uncontrolled costs
  to MA program for psychiatric, long-term care,
  and rehabilitation care.
• DPW adopted need review process of their own to
  control unnecessary utilization and to assure
  payments are consistent with efficiency, economy,
  and quality of care.
• DPW considers exceptions to policy on
  case-by-case basis.
• DPW decision recently challenged in court. DPW
  appealing.

7
What Did All This Mean???
8
Legislation After CON

• Managed Care Accountability
• Act 68 of 1998
• Uncompensated Care
• Act 77 of 2001
• Patient Safety
• Act 13 of 2002

9
Trend in the Number of Licensed Pennsylvania
Hospitals
Source Pennsylvania Department of Health
10
Acute Hospital Beds per 1,000 PopulationPennsylva
nia Hospitals
21 Decline
12 Decline
Source Pennsylvania Department of Health
11
Growth in Outpatient SurgeriesPennsylvania
Hospitals vs. Freestanding Ambulatory Surgery
Centers
Source Hospital OP Surgeries-AHA Hospital
Statistics, 2007 Edition Freestanding ASC OP
Surgeries-Pennsylvania Department of Health
12
Growth of Freestanding Ambulatory Surgery Centers
in Pennsylvania
93 growth over 5 years (2002-06)
Source Pennsylvania Department of Health,
Standard Annual Reports
13
Operating MarginsPennsylvania FS Ambulatory
Surgery Centers vs. Acute Care Hospitals
Source HAP analysis of Pennsylvania Health Care
Cost Containment Council data
14
Public Policy Recent Efforts

• 2005 - Legislative Budget and Finance Committee
  Study of Quality Assurance for Specialized
  Clinical Services.
• Study found number of PA providers offering
  cardiac services increased and state oversight
  was inconsistent.
• Study found number of PA providers offering organ
  transplant remained stable.

15
Public Policy Current

• House and Senate
• bills on Prescription
• for Pennsylvania.
• House Bill to
• re-establish CON.
• House Bill to ban
• self-referral.

16
Governors Health Care Reform Plan

• Calls for regional process to evaluate need and
  affordability of large capital investments.
• Commission would develop recommendations for how
  such reviews should be structured and funded.
• Commission would include economists, providers,
  consumers, insurers, business leaders, government
  officials and others.

17
Rowing harder doesnt help if the boat is headed
in the wrong direction. Kenichi OhmaeHarvard
Business Review
Or if you are in the wrong boat . . .
18
Health Care Reform

• The good health of all citizens must be a
  priority.
• Focus must be on disease prevention, treatment
  improvement, wellness, quality of care and
  patient safety.
• Individual patients must be the core focus of the
  health system.
• Patient-health care professional relationship is
  fundamental and patients must have access to good
  information.
• The health care system must work for all
  citizens.
• All citizens should have access to health
  coverage and quality health care.
• The best elements of our health care system must
  be preserved and enhanced.
• Health care reform should improve the system
  without sacrificing the features that enable the
  delivery of the most advanced care in the world.

19
Hospital Building Facilities Stress High-Tech
Care
20
Clinical IntegrationThe American Hospital
Association (AHA)
21
HAP Policy Framework

• State has compelling public policy
• interest in assuring access to quality
• care and affordable health care coverage.
• Accountability and transparency are needed for
  delivery and financing of care.
• Broaden and strengthen licensure oversight (e.g.,
  limited-service providers).
• Equity regarding licensure, reporting, provision
  of care to the poor, etc.

22
HAP Policy Framework (continued)

• Market forces at community level
• should continue to be method for
• determining need, expansion, or elimination of
  services.
• Appropriate balance between competitive market
  forces and regulatory requirements is essential.
• Clear safeguards regarding financial investment
  by physicians.

23
QUESTIONS
Healing. Health. Hope.