Health care regulatory changes fail to advance

Print Friendly and PDF By: Andy Miller Published: Mar 6, 2013

Proposed changes to Georgia’s health care regulatory process hit a dead end in a House committee Wednesday, but only after a four-hour hearing that exposed a longstanding divide between physicians and hospitals.

The House Health and Human Services Committee debated one bill that would exempt multi-service outpatient surgery centers owned by physicians from the state regulatory process, and then a second bill that would exempt standalone pediatric emergency rooms. The panel adjourned without taking a vote on either House Bill 279 or House Bill 404.

Thursday is Crossover Day, the deadline for a bill to be passed by at least one chamber of the General Assembly or lose its chance of becoming law this session. So the two House bills are effectively dead until next year, except in the unlikely event that one of them is attached to legislation that has already moved forward.

Construction of large health care facilities comes under the state’s certificate-of-need (CON) process. CON is a complex set of regulations governing medical facilities’ expansion and building, as well as services such as obstetrics and heart surgery.

Hospital Outpatient Entrance SignThe CON process is somewhat controversial because hospitals have often used it to challenge competitors’ planned projects. It has also sometimes pitted doctors against hospitals in battles over building surgery centers.

Single-specialty surgery centers, such as those limited to orthopedic operations, have already been exempted from CON.

Physicians and supporters of the multi-specialty centers say they should also be exempted, and that such as step would lower health care costs for employers, patients and insurers.

“It’s basically a free-market issue,’’ Rep. Terry Rogers (R-Clarkesville), sponsor of House Bill 279, told the House panel.
An attorney for independent physicians said these centers would offer low-risk elective surgeries at a much lower price than hospital outpatient surgeries.

Physicians want a level playing field with hospitals, said attorney Victor Moldovan.

Hospitals have been controlling patient referral patterns by increasingly buying up physician practices, Moldovan said. “In Atlanta, it’s very aggressive,’’ he told the House panel. “The hospitals are trying to buy market share.’’

“No hospital has been shut down because of a surgery center,’’ Moldovan added.

Dr. Ken Davis, CEO of the Harbin Clinic in Rome, said the two hospitals in the northwest Georgia city have access “to unlimited capital’’ and are using it to recruit doctors and pay them $50,000 more per year.

Dr. Pat Jones of Savannah said doctors are driving the effort to coordinate patient care. “Nonprofit hospitals use their profits to buy physicians,’’ Jones said. “Hospitals basically want to control everything.’’

But hospital groups, in opposing the multi-specialty center exemption, told legislators that they need profits from surgery to offset the losses they incur through intensive care, trauma and other unprofitable services.

With health care reform leading to lower reimbursements, “hospitals need these profit centers more than ever,’’ said Temple Sellers of the Georgia Hospital Association.

Julie Windom of the Georgia Alliance of Community Hospitals said that because government is the largest purchaser of services, “health care is not a free market . . . and never will be a free market,’’ regardless of CON.

She said multi-specialty outpatient surgery centers would draw away hospitals’ healthier, private-pay patients, leaving the hospitals performing mainly money-losing services.

And Deb Bailey of Northeast Georgia Medical Center told lawmakers that allowing a multi-specialty ambulatory surgery center in Gainesville would cost the hospital system $25 million.

“They can do this now,’’ Bailey said. “They just have to go through the CON process.’’

Georgia and other states created a CON regulatory system decades ago to contain health care costs. Several states have eliminated such systems, while others have scaled back the regulations.

Rep. Earl Ehrhart (R-Powder Springs), sponsor of the pediatric ER bill, told lawmakers that “the sky is not falling’’ in states that have eliminated CON.

“I have a 25-year history of opposing CON,’’ Ehrhart told the House panel, alleging that the system creates monopolies for hospitals.

David Tatum of Children’s Healthcare of Atlanta testified that his system does not support the ER bill. Among other reasons, he cited questions about what services these facilities would include.

A third CON-related bill, regarding the acquisition of surgery centers, also is not expected to survive past Crossover Day.

Earlier this year, state regulators rejected three proposals to establish freestanding general ERs.

 

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