A court ruling in Michigan will allow two Detroit-area health systems to move forward with expansion plans despite opposition from competing hospitals backed by powerful local business interests concerned with spiraling healthcare costs.
When a law passed in December 2002 exempted six-hospital Henry Ford Health System's proposed $250 million hospital project from the state regulatory process, local hospitals cried foul. Weighing in on the certificate-of-need dispute was the Economic Alliance for Michigan, which represents a mix of state businesses and workers-including the area's Big Three automakers and their powerful unions.
The coalition filed a friend-of-the-court brief in last summer's lawsuit, disputing the law that allows Henry Ford and another health system, St. John Health, Warren, Mich.-which is planning a $150 million expansion in Novi, Mich.-to circumvent certificate-of-need laws by moving existing beds from their Detroit-area hospitals into more affluent western suburbs. A county circuit court judge ruled that the lawsuit had no legal standing. The challenging hospitals are likely to appeal after a final order, which is expected to be entered this week.
"We filed the brief because we're concerned about the ever-increasing rate of healthcare (cost) escalation," said Larry Horwitz, alliance president. He said the group would consider filing another brief if there is an appeal.
Horwitz said the law that allows hospitals to sidestep the construction approval process is "misleading" the public because any construction, whether it's building new beds or moving existing beds, involves significant capital costs.
Horwitz said his coalition has been intervening in hospital construction disputes for 15 years, supporting tight enforcement of the CON program. A hospital industry spokesman said it's not unusual for employers and others to get involved from time to time in certificate-of-need battles between hospitals. Elizabeth Palazzolo, director of planning at Henry Ford, countered, "Competition in any industry tends to ensure that costs are competitive."