ATLANTA – Georgia’s decades-old certificate of need (CON) law governing hospitals and health-care services has never achieved its intended purpose and should be reformed or scrapped altogether, witnesses told a state Senate study committee Tuesday.
Congress passed the CON law in 1979 requiring applicants wishing to build a new hospital or provide new medical services to demonstrate a need in their community. But the federal law was repealed in 1986 because it wasn’t meeting its goal of reducing the costs of health care by avoiding duplication, Thomas Stratmann, a senior research fellow and economics professor at George Mason University’s Mercatus Center, testified as the Senate Study Committee on Certificate of Need Reform opening hearings on the CON issue.
Since the federal repeal, 34 states – including Georgia – have chosen to continue enforcing state-level CON laws, while only 12 have fully repealed their CON laws. Four have reformed their CON requirements to exempt certain types of facilities, notably nursing homes.
“Keeping CON on the books has resulted in negative consequences for patients,” Stratmann said. “It reduces health-care quality, reduces access to health care, and reduces availability of medical equipment.”
The study committee was formed after legislation championed by Senate Republican leaders aimed at CON fizzled in the General Assembly this year. One of the bills called for exempting most rural hospitals from the law, while the other would have repealed CON entirely except for long-term care facilities.
Critics of Georgia’s CON law have long focused on its impact on rural counties. Stratmann’s research projects that an additional seven rural hospitals could be built in Georgia if the CON law were repealed. Ten rural hospitals have closed since 2005.
Repealing CON also would increase the number of ambulatory-surgery centers (ASCs) operating in Georgia from the current 316 to 500, according to Stratmann.
But Keri Conley, general counsel for the Georgia Hospital Association, questioned the accuracy of the seven additional hospitals projection because no Georgia-specific analysis was done to come up with the number.
Conley said more ASCs aren’t the answer to lack of access to health care in rural communities.
“ASCs are typically located near hospitals concentrated in metro areas,” she said.
Conley said ASCs can even work against rural health-care access because many are built in outer suburbs or exurbs, where they compete with existing rural hospitals.
But health-care lawyer Victor Moldovan said ASCs help bring down health-care costs because the outpatient care they provide saves money.
“The way to reduce costs is to push it outpatient,” he said. “We need to open up access and remove barriers.”
Sen. Greg Dolezal, R-Cumming, the study committee’s chairman, said the panel will hold two additional hearings in Columbus and Savannah before returning to the Gold Dome for a final meeting. The committee is due to release recommendations to the full Senate by Dec. 1.