Government, Health Care, and Nonprofits

The health of Certificate of Need

September 30, 2014
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Once again, our legislators have opened season on the Certificate of Need program, or CON, in the health care industry.

Despite ample evidence of its success in foiling costly and grandiose schemes over the program’s 42-year history, once again some our legislators seem to be listening to specific constituents and ignoring many others.

Need

The core principle behind CON is simple: before you begin something new, you should be able to demonstrate the need for it. Need is defined in advance by a panel of expert volunteers appointed by the governor with the ratification of the state Senate. If it’s needed, you go ahead. If not, you complain to your legislators, who, being term-limited newbies, don’t have the history or understanding to know what’s really driving the complaints. It is embarrassing that our West Michigan Senator Arlan Meekhof is among these.

Health care market

Legislators often have a knee-jerk response to cries of unwarranted “anti-competitive” interference, despite evidence that the laws of a free market do not work in the health care environment. Although we all have been taught to respect free enterprise, we must understand that it simply isn’t operative in the health care arena. Health care is expensive and unneeded programs and buildings make it even more so. Everyone experiences these costs — individuals, businesses and the state. The rise in costs has made insurance unaffordable for many, leading to pushes for solutions like Obamacare, which might address insurance coverage, but don’t contain underlying costs.

Health care is costly for people in need of services. But it’s highly lucrative for some providers. We must put into context the desires of would-be developers and practitioners. While a CT or MRI scanner might “only” cost millions, those who charge fees to conduct and interpret the scans make many millions more on an ongoing basis. Having too much capacity simply reduces efficiency and raises costs. With a blatant attempt of the McLaren Health System to gut its Pontiac facility in favor of building an unneeded new facility in nearby Clarkston, others remind us that the area already has far too many hospital beds and the needed services to support them.

Remember a simple reality: one person’s cost containment is another’s income containment.

CON in West Michigan

The West Michigan community actively participated in the CON program since 1972, making sure that local views could be represented before state decisions were made. In the process, many local issues and differences of opinion were resolved by community volunteers, who were only interested in the community’s best interests. Many very dedicated volunteers served locally to be sure that the West Michigan community got a fair shake.

The current state of events leads one to be less enthusiastic for CON in West Michigan. The agency designated to conduct CON locally has apparently decided to retreat from its prior leadership role. The burden of looking out for West Michigan is now left to the state’s Department of Community Health and the Economic Alliance for Michigan, a statewide business-labor coalition.

As some health systems continue to convert the program to a “Certificate of Want” program, the ability of legislators to stand up seems to grow weaker.  

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