Rep. Steen leads review of hospital planning

Published 12:00 am Tuesday, August 30, 2011

By Karissa Minn
SALISBURY — N.C. Rep. Fred Steen will be one of two leaders of a new House committee studying how the state permits hospitals to get new buildings and equipment.
Speaker of the House Thom Tillis appointed Steen, who represents part of Rowan County, and N.C. Rep. John Torbett of Gaston County to lead the House Select Committee on Certificate of Need (CON) and Hospital Related Issues.
In order for a North Carolina health care facility to construct a new building, expand a current one, make renovations or buy certain equipment, the state must issue a Certificate of Need.
“Is the CON process fair to all, or does it need to be modified or radically removed?” Steen said Tuesday. “We’re going to listen to all sides of the issue and see if this is something the state needs to change.”
Academic and research hospitals do not go through the CON process and must compete with private practices. This past legislative session, Steen sponsored a bill — now assigned to a committee — that would treat these hospitals the same as all others in the state.
He said that bill spurred the creation of the new committee, which will study the law and process for issuing a CON and related matters involving hospital expansion.
Steen said he’s heard arguments that applying for CONs keeps hospitals from raising patient costs after spending too much on equipment to keep up with the market.
But Steen said he tends to lean toward letting the free market work, and he believes that allowing more competition could bring health care costs down.
He stopped short of saying that North Carolina should do away with its Certificate of Need law altogether.
“I think the CON needs to be reformed to allow some more open market decisions to be made, and the process needs to be more objective,” Steen said.
Much of the controversy over the law is caused by perceived unfairness in the way it’s applied, he said. Lawsuits have been filed over why one hospital was allowed to build where another wasn’t, or why one doctor got a piece of equipment that another couldn’t have.
“If the free market will help our health care costs go down, I’m 100 percent for it,” Steen said. “If it’s going to create more problems or create a void in maybe a rural hospital somewhere, then I’ve got concerns about that.”
Dari Caldwell, director of Rowan Regional Medical Center, said she spent six years in California, which does not have a Certificate of Need law.
“It was pretty cutthroat, in terms of competition,” she said. “You would see MRI facilities on every block, all trying to compete.”
This can cause problems for the uninsured insurance, because places that spend more on equipment may not treat patients who can’t pay. The CON process can help make good care more available for everyone, Caldwell said.
“We don’t have the greatest economic picture in Rowan County right now, and lots of people don’t have insurance,” she said. “At a not-for-profit hospital like Rowan Regional, our mission is to take care of people whether they have the ability to pay or not.”
But Caldwell said she thinks now is a good time to look at the state law to make sure that it’s fair and works well.
“In general, we support the CON process and the CON program, but we just think it needs to be reviewed, and I think Fred will do a great job of that,” Caldwell said. “He’s very fair.”
In March 2008, the state denied the hospital a Certificate of Need for a proposed $17.2 million facility in south Rowan.
Caldwell, who came to Rowan Regional in May of last year, said the application was denied because the area’s population growth was lower than expected. But even if it was allowed with no CON, the hospital might not choose to build the facility now for the same reason, Caldwell said.
At around the same time, the state accepted an application submitted by CMC-Northeast for a freestanding emergency department in south Rowan, which is under construction now.
Steen said he hopes any changes to North Carolina’s CON law will clear up the reasoning behind such decisions.
Contact reporter Karissa Minn at 704-797-4222.
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