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Reform for Better Health Care

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Now that the Supreme Court has determined that the Obamacare entitlement is here to stay, let’s work toward reforming our health care system in ways that make sense.

Virginia is one of 36 states that still has Certificate of Public Need laws (COPN) on the books. This law stems from a federal mandate more than 40 years ago, and it has not substantively changed in nearly 20 years. Some states have wisely chosen to rid themselves of these antiquated and burdensome regulations. Unfortunately, Virginia is not one of them.

 In the Old Dominion, if a healthcare provider wants to add beds, purchase an MRI machine or start performing open-heart surgery it must first go through a lengthy and costly application process so that state regulators can determine if there is “a public need” for the service.

The original goals of COPN laws were to control healthcare costs and ensure access to care for all Virginians. However, in reality this law artificially creates monopolies on healthcare services, stifles competition and prevents communities from receiving vital medical services.

This past legislative session, the General Assembly considered legislation to reform Virginia’s antiquated COPN law. The final bill that passed did not include real reforms. Instead it instructed the Secretary of Health and Human Resources to assemble a working group to develop a set of recommendations on reforming Virginia’s COPN law. 

The first meeting of this working group was on July 1st and it was to begin assembling recommendations for the Secretary to present to the General Assembly later this year. Hopefully, this working group will think outside of the box and recommend real reforms that will increase access to care and lower costs for all patients in the Commonwealth.

In addition to Secretary Hazel’s working group on COPN reform, the Virginia Hospital and Healthcare Association (VHHA) is working its way through a similar process for reforming COPN regulations. With some creative thinking by these two groups, recommendations will do more than merely preserve the status quo with minor changes here and there.

VHHA should look at recent efforts by its fellow hospital association in Pennsylvania. The Pennsylvania House Health Committee is considering reinstating a COPN structure for hospitals, which was repealed many years ago. It would re-regulate planning of new health care services and construction based on state-determined community need. It would move backward toward where Virginia is today.

But look at who is opposed to this re-regulation of the health care industry: the Pennsylvania Hospital Association which testified against renewing the COPN law by saying:

“Reinstating an administratively cumbersome and costly process will result in unintended consequences, including stifling innovation in health care delivery in hospital settings and potentially preventing the appropriate availability of services within communities.”

That’s a strong statement coming from healthcare professionals who lived under COPN laws, continued working in healthcare after this law was repeal, and believe today that COPN laws are a bad idea. Like Virginia, Pennsylvania has both urban and rural areas, and the non-COPN system is working well enough that these professionals don’t want to see it reinstated.

In addition to the hospitals, the Pennsylvania Medical Society is also opposed to reinstating COPN laws.

Those groups argue that COPN laws politicize the healthcare approval process and are not effective at holding down costs. The Pennsylvania health care groups also explained how the free-market has done a better job of ensuring that their citizens have access to care.

The status quo is not working and Virginia is behind the times. Virginia ranks in the bottom third for capacity to treat patients overnight and is the twelfth most populated state. The Mercatus Center at George Mason University found that Virginia has 10,800 fewer hospital beds throughout the Commonwealth because of our COPN regulations. Even if that figure were half of that number, those are a lot of patients not able to receive the care that the professional health care providers feel is needed. Our COPN law, according to this report, is eliminating competition, suppressing innovation and limiting access to needed care.

 Transforming healthcare policy for the Commonwealth deserves serious consideration and ideas that challenge the status quo. We have lived with years of mandates and top down regulation that have given us unintended consequences and has jeopardized the health care of our citizens.

We need policies that encourage competition and incentivize economic growth so we can increase access to health care while easing financial burdens for everyone in the Commonwealth. Virginia looks forward to the recommendations on reforming COPN from Secretary Hazel and from the Hospital Association. Let’s hope we can work towards transforming COPN during the next General Assembly legislative session and move toward the Pennsylvania model that seems to be doing quite well.

(This column first ran in the Richmond Times Dispatch on July 12, 2015.)

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