The defense against medical monopolies, cost hikes

March 11, 2016
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Yet another artful dodge of the Michigan Certificate of Need process will cost the citizens of Ottawa County, particularly in Grand Haven, another jolting increase in health care costs.

The sneak pass was played through the Grand Haven Township Planning Commission, whose charge was only to approve zoning changes to allow Spectrum Health and Holland Hospital to create a vast new surgical center and medical facility. The township board will hear the matter this week.

The planning commission is quoted by the Business Journal as indicating the matter is a “free market” decision, but indeed it is not. Health care does not operate in the free market, especially as patients are assigned or instructed by a medical community and do not “shop” during medical emergencies as though they were looking for cheaper gas prices.

How might residents feel about a facility duplicating services at locally owned and run North Ottawa Community Health System when costs begin to inflate? The Business Journal knows well how the business community views such duplication: It has a direct impact on health care costs for employees. In the recent past, Ford Motor Co. executives testified to the Michigan legislature that the cost of each new car (at the time) included $7,000 in costs for employee health benefits.

West Michigan businesses have noted the same cause and effect, including Meijer, the furniture industry and several smaller manufacturers. For those reasons the Economic Alliance for Michigan has supported the CON process to help hold down costs.

The Certificate of Need process, used in 36 states, is designed to eliminate costly duplications such as the beds planned for Spectrum’s Health Pointe project, duplicating those already licensed to North Ottawa Community Health System, and most importantly the four operating rooms, duplicating the same number already in existence at NOCHS.

The Michigan CON Commission should step in to look at this project and begin again its aggressive defense against such cost-escalating “services.”

Economic Alliance of Michigan leaders, who have weighed in across the state, have noted major health care systems buying up local and regional hospitals or building “outreach centers” that directly compete are creating monopolies. New health care facility developers must demonstrate the need for such centers.

Alliance President Bret Jackson notes in the agency’s cost analysis studies that other states with less-stringent CON policies or no policy at all have an abundance of expensive medical equipment, which leads to its owners trying to justify its existence and perhaps having patients take unnecessary tests. CON controls capital costs and utilization of services — as well as costs to patients.

The Business Journal report notes NOCHS board president Dr. Jack Roossien expects Health Pointe will result in a reduction of quality and an increase in costs for care, as well as potential job losses if NOCHS can’t sustain its current services. “Individual practices like family doctors and smaller practices actually have better outcomes because they are more identified with their patients,” he said. “As a system gets significantly larger, like Spectrum, that efficiency goes down and cost goes up.”

The Michigan CON Commission should review and rebuke the Spectrum/Holland Hospital proposal, even as Grand Haven Township Board reviews it this week with more complete information. The government must prevent such monopolies and protect against the escalation of health care costs for their employers and constituents.

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