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On the chopping block
Eyes on Maine as it looks to toss certificate of need

By Andis Robeznieks
Posted: March 2, 2013 - 12:01 am ET

An effort in Maine to kill the state's certificate-of-need law has the support of Gov. Paul LePage and others who say the free market is a better regulator than the government when it comes to deciding how many healthcare facilities can be built.

“As Maine goes, so goes the nation,” political pundits used to say long ago, when the party winning the state's September election for governor was thought to signal a leg up in the presidential election. It remains to be seen what path Maine takes on regulating healthcare services and whether other states will follow.

Maine is one of 36 states that has a certificate-of-need law on its books, which requires a healthcare organization to prove a new healthcare facility or service is needed before it's allowed to start construction or offer the service.

A similar debate is taking place in neighboring New Hampshire, where a law passed last year calls for phasing out CON by June 30, 2015. On March 5, a committee of the New Hampshire House of Representatives will hold a public hearing on a bill that would extend the CON law another four years.

The debates in Maine and New Hampshire are among almost 200 CON-related bills introduced already this year, according to the National Conference of State Legislatures.

But the real debate could really be over a non-legislative measure known as “Roemer's Law.”

Dr. Milton Roemer declared in 1959 that “A built bed is a filled bed,” especially when third-party payment is involved. Healthcare policymakers have been debating that ever since. New Hampshire has often been at the heart of this debate because of the research on healthcare resource utilization done by the Dartmouth Atlas Project.

Rick Adams, spokesman for the Dartmouth Hitchcock Medical Center in Lebanon, N.H., says his institution supports the bill to keep his state's CON law on the books.

“If the certificate-of-need process needs to be reformed, we'd rather see it reformed than repealed,” Adams said. “Research has shown that overutilization is one of the drivers of healthcare costs, and certificate of need is one way to get at those costs.”

In Maine, the sponsor of the CON repeal bill is state Rep. Richard Malaby, and he disagrees with the Dartmouth assessment. He argues that CON inhibits competition, which results in higher healthcare costs.

“It is my contention that the state is not the appropriate entity to determine when and where investments are made by a healthcare facility,” he said at a Feb. 21 hearing. “It is the local hospital, doctor, and/or investor who should determine the allocation of capital for healthcare infrastructure.”

At the same hearing, Beth O'Connor, chairwoman of Maine Taxpayers United, said that the “Maine Medical Association determined that CON laws are an unnecessary bureaucratic obstacle to healthcare innovation.”

But Gordon Smith, the medical association's executive director, said that may have been the group's position at one time, but it's not anymore. Smith said the medical association worked on previous CON reforms with the Maine Hospital Association—which opposes the repeal bill. “There's no chance, in my opinion, that the bill is going to pass,” Smith said.

Smith added that the issue is becoming “irrelevant” as healthcare providers consolidate into large, integrated systems.

According to the National Conference of State Legislatures, New Hampshire's repeal was one of 40 CON-related bills passed last year by 20 of the 36 states with CON healthcare requirements. There have been 198 CON bills introduced this year, though the plug has already been pulled on eight in Mississippi that would have expanded CON to cover facilities for the developmentally disabled, nursing facilities with at least 60 beds, hospice services, and neonatal care, emergency and end-stage renal disease care.

“Overall, the trend appears to indicate that most of the 2013 CON legislation aims to limit, but not eliminate, CON requirements, which could include moratoriums,” said Kara Nett Hinkley, NCSL health program policy associate.

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