Florida’s Certificate of Need law is called the “Lawyers’ Relief Act” because it has kept hundreds of attorneys gainfully employed for decades.
The law requires anyone who wants to add a new hospital, nursing home, hospice or specialty service to obtain permission from the state Agency for Health Care Administration. The application requires them to prove a community need, as defined by the applicant. Almost no certificates have been issued on the first application. Most times, there are several competing applications. Rarely is a preliminary approval not challenged by competitors or existing providers of the same services.
Now this law that governs the creation or expansion of new health care services is under attack. Gov. Rick Scott says eliminating government approval processes will drive down prices. He, his health care commission and some legislators believe eliminating the program will increase competition. They believe increased competition will lower prices.
But hospitals are not restaurants and car dealerships. No discounts would entice you to have an appendectomy you don’t need. Medical care does not conform to the same laws of supply and demand as other goods and services. Here’s why:
*Medical care is something we have to have, not something we choose to use. When was the last time you woke up and said, “I think I’ll go to the hospital today?”
As consumers, we know little, and understand less, about our bodies and how they work. Most of us have a keener awareness of how cellphones work than we do of what causes disease.
As a patient, we trust doctors and nurses who have the education and training needed to treat us correctly. Patients rarely argue that a recommended test, procedure or medication is unnecessary or wrong.
If we are among the lucky few, we get to choose our professional caregiver. With the exception of elective procedures, we don’t shop for medical care and wouldn’t know the best person, place or price for the services we need. The many widely publicized report cards and websites with doctor and hospital ratings are making strides to engage consumers in the evaluation process. Those that use letter grades, numerical scores and stars have attracted significant followings. Researchers say, however, that folks are still checking this information after they receive care, not as part of the decision-making process.
Much of the actual cost of medical care is paid by a third-party payer, like a health insurance plan, Medicare or Medicaid. As consumers we are buffered from much of the expense, rarely know in advance what something is likely to cost and have a hard time putting a dollar value on “make us better.”
Excess capacity of medical facilities and complex treatment programs increases costs and jeopardizes quality. If the volume of patients is low, the fixed costs are shared by fewer patients, and the unit cost per patient goes up. And if the volume of patients is low, those with specialized expertise don’t get enough practice. Underutilized medical care can lose its edge.
The South Florida Hospital and Healthcare Association opposes unbridled competition and proliferation of unnecessary medical facilities, such as hospitals, nursing homes, ambulatory surgery centers, trauma centers, transplant programs and hospices.
Today’s certificate of need law might come with a burdensome regulatory process, but those already here competed to meet the needs of their communities. They work hard every day in every way to keep the commitments they made as part of that process. It is inherently unfair to force them to share scarce resources with those who have not been subjected to the same rules or rigor.
Linda S. Quick is president of the South Florida Hospital and Healthcare Association. She wrote this for the Sun Sentinel.
