Government, Health Care, and Law

Sen Hildenbrand Worth looking at changes in CON law

October 1, 2012
| By Pete Daly |
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Legislation approved by a Michigan Senate committee would change the Michigan Certificate of Need process for determining where and when new hospitals should be built, and would eliminate West Michigan’s Alliance for Health from the process altogether.

A West Michigan senator who is a member of that committee said some of the changes are good in it, but he added he does not favor repealing the law that authorizes the Alliance for Health role in Certificate of Need deliberations.

Regional advisory organizations such as AFH “were set up as kind of a filter, before (hospital) projects get to the Certificate of Need” stage, said Sen. Dave Hildenbrand, R-Lowell. “It seems to have worked pretty well around the state. I’m not comfortable with that provision that would repeal that part of the current act.”

A Certificate of Need is required by the Michigan Department of Community Health before it authorizes new hospital construction to help prevent wasteful inefficiencies in the medical care system that result in additional cost being passed on to the public.

Hildenbrand told the Business Journal there are “good arguments for and against the Certificate of Need. I think it’s done a pretty good job about capping the cost in health care in our state but there are other states that don’t have this kind of system in place. I think Indiana is one that has been highlighted.”

He said Indiana is “more of an open market place when it comes to health care capital costs, so institutions are just making their own decision how big their hospitals should be, how many beds they should have, what equipment they should have. … I think there are advantages of that system, as well. But we have this system in place in Michigan, so we’re going to operate under that until there’s support — if there ever would be — to repeal it completely, which I don’t think there is.”

The Senate Economic Development Committee, chaired by Oakland County Sen. Mike Kowall, originally considered proposed legislation sponsored by Kowall that would have specifically allowed McLaren Health Care in Oakland County to build a $300 million hospital near Clarkston, exempting it from the CON process.

According to the Detroit Free Press, there is an average of 1,200 empty hospital beds in the eight hospitals already located within a 30-minute drive of Clarkston.

Last week the committee deleted the McLaren exemption from the proposed bill but kept changes in the CON process, including the law allowing the CON Commission to designate regional review agencies for making recommendations on proposed new hospitals.

The Alliance for Health is actually the only regional review agency currently designated in Michigan and covers a region of several counties including and surrounding Kent County.

The AFH is a large coalition of organizations and individuals, with the expressed goal of promoting ways to achieve health care of the highest quality at the lowest cost. It receives no state funding; funding comes from members and from grants including some from the Robert Wood Johnson Foundation.

Each year the AFH produces a number of studies for its members’ use, such as the annual employer health plan survey that shows how much companies are paying for employee health insurance and the details of the coverage.

Lody Zwarensteyn, director of the Alliance, said the organization recently convened a meeting of nursing home representatives and the public, and conveyed the collected information and opinions to Sen. Geoff Hansen, R-Hart, who is working on revamping state laws pertaining to regulation of nursing homes. Hansen is also a member of the Senate Economic Development Committee, and he voted in favor of the latest version of the Kowall proposal.

Zwarensteyn said the nursing home project was “an example of working with a (medical care) provider group. Over the years, we’ve worked with hospitals regarding their need for more hospital beds, MRI equipment, CAT scanners …”

Although founded in 1948, the Alliance did not become authorized to participate in the CON deliberations with the MDCH until 1972. Other similar organizations around the state bowed out of the CON process in the late 1980s when Michigan withdrew funding of the organizations. Zwarensteyn said the Alliance was the only such volunteer group in the state that decided to fund itself for continuing its activities relating to the CON process.

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