New Jersey lawmakers have cleared the way for hospitals and health systems in the state to buy new equipment and add services without first seeking state certificate-of-need approval.
Critics of the measure, which passed the state Senate by a 39-0 vote and the General Assembly 60-11, said they believe deregulation will lead to unnecessary duplication of services. They also said they fear that paying patients will be skimmed away from urban hospitals.
But proponents argued that market forces will drive out excess costs and benefit patients. Health Commissioner Len Fishman backed the measure, which Gov. Christine Todd Whitman is expected to sign. The state hospital association also backed the measure.
The bill ends 27 years of CON for many items, beginning with ambulatory-care clinics, magnetic resonance imaging equipment, capital improvements and bed additions.
The first phase of deregulation would go into effect 45 days after the bill's enactment. Additional service and equipment reviews would be phased out in 20 months. Phase two includes positron emission tomography, ambulatory surgery facilities, obstetric and pediatric services, and birthing centers.
Reviews of big-ticket items, like cardiac care and the opening and closing of whole hospitals, remain in place pending recommendations by a special commission created under the bill. The commission will study the impact of deregulation on urban hospitals and on access and quality. But the bill's stated goal is to eliminate CON.
The bill also would abolish local advisory boards, which had a say on health planning decisions on the local level. New Jersey Citizen Action, a consumer advocacy group that opposed the bill, managed to get an amendment that requires local hearings when a hospital's ownership is transferred and when a facility or service is being closed.
While the New Jersey Hospital Association endorsed the measure, urban "safety-net" hospitals recommended further study before plowing ahead.
"Marketplace principles simply don't work in the interests of the poor and the needy," said Suzanne Ianni, executive director of the 18-member Hospital Alliance of New Jersey, a coalition of urban hospitals.
The fear is that urban hospitals' paying patients will seek services in the suburbs. That would prove financially disastrous for urban hospitals and undermine their ability to care for the poor, she said.
In other matters, the state Senate failed to vote on a bill requiring state oversight of not-for-profit hospital conversions. The Legislature, now in recess, may reconvene during the summer to take up some nonhealthcare matters. Backers of the conversion bill hope it will be passed at that time.
