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Not a magic bullet – amending NC’s CON law

DocwfoldedarmsOn Monday of this week, the North Carolina House Committee on Health met to hear from advocates for and against House Bill 200, also known as an amendment to North Carolina’s Certificate of Need (CON) law. While both advocates had strong arguments, there was something that Connie Wilson, a lobbyist representing the North Carolina Orthopedic Association and groups of ophthalmologists, said that didn’t seem quite right.

The most common argument that supporters of repealing or amending North Carolina’s CON law make is that costs associated with health services will decrease as a result of increased competition between hospitals and outpatient medical facilities. To use Ms. Wilson’s words, people are no longer “forced to go into higher cost facilities.” Unfortunately, supporters of CON law amendments and repeal do not present the other side, and that is how some North Carolinians could be “forced” out of the health care safety net.

The state of Georgia was presented to the House Health Committee as an example of how amending CON laws can lead to positive health care outcomes. In 2008, Georgia amended its CON law so that joint-venture or single-specialty ambulatory surgery centers (ASCs) are exempt from CON laws. However, Georgia’s amendment to the CON law was not a magic bullet as Georgia still experiences yearly increases in health care expenditures like other states with CON laws.

More importantly, supporters of amending CON laws did not present data on how the amendment impacted rural hospitals in Georgia. For example, Telfair Regional Hospital closed in 2008 — the same year ASCs became exempt from CON laws in Georgia. Since that first closing, five additional rural hospitals in Georgia experienced closures. This leaves many people without primary and emergency health care.

North Carolina has already experienced two rural hospital closures since 2010 and risking additional closures will leave many residents without a medical home. Even though, HB 200 contains a provision allowing rural hospitals to approve ASCs – the bill considers a hospital as “rural” if it is located in a county with fewer than 100,000 residents – it does not take into account surrounding counties that depend on that one hospital for health care. What’s more, HB 200 also includes a provision requiring that at least seven percent of health services should be charity care. Considering that 20 percent of rural residents are uninsured and nearly one-quarter of rural residents live at or below the federal poverty line, seven percent charity care does not seem adequate. If rural hospitals become even more strained and the legislature does not expand Medicaid, where will rural residents receive care? As stated in previous posts, CON laws help ensure that all North Carolinians have access to health care and that hospitals and health services facilities don’t just provide services in wealthier counties.

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Not a magic bullet – amending NC’s CON law