Certificate of Need perspectives
The state’s Certificate of Need, or CON, program for the health care industry has a 46-year history. 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 Michigan 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 is really driving the complaints.
The CON program was created in recognition of the fact 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 and led to pushes for solutions like Obamacare, which addressed insurance coverage but did not contain underlying costs.
Health care is costly for people in need of services. But it is highly lucrative for some providers. We must put into context the desires of would-be developers and practitioners. While buying 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. Remember a simple reality: one person’s cost containment is another’s income containment.
The West Michigan community actively participated in the CON program starting in 1972, making sure that local views could be represented before state decisions were made. In the processes, many local issues and differences of opinion were resolved by community volunteers, who only were interested in the community’s best interests. Many very dedicated volunteers served locally to be sure the West Michigan community got a fair shake. However, the agency designated to conduct CON locally decided to retreat from its prior leadership role and gave up its franchise. The burden of looking out for West Michigan now is left to the state’s Department of Community Health.
In the last two years, $541,600,562 in spending was proposed in West Michigan, most of which was centered in Kent County. Remember, CON covers only a limited list of projects. Much more spending can proceed unchecked. Also remember that the charges of health care providers reflect their costs. So, who pays? You do.
Because these proposals have not been in the public eye in West Michigan, here is a list of CON requests put forth in 2016 and 2017 and broken down by facility, project description and capital cost.
Certificate of Need proposals in West Michigan in 2017 and 2016
Alliance-HNI LLC, replace MRI network, $2,979,523
Bronson Outpatient Surgery, lithotripsy network No. 167, $243,745
East Beltline Imaging PLC, replace fixed CT scanner, $284,000
Hallmark Living Holland, acquire 90-bed nursing home, $2,700,000
Hallmark Living Kalamazoo, acquire 90-bed nursing home, $3,240,000
Heather Hills Care Center, acquire 60-bed nursing home by Trilogy/42-month lease, $1,200,000
Heather Hills Care Center, replace 60-bed nursing home, $31,558,871
Holland Community Hospital, renovate and expand OB, $14,525,020
Laurels of Carson City, change landlord/new two-year lease, $2,496,000
Laurels of Kent, renew one-year lease, $1,522,254
Life Care Center of Plainwell, acquire 119-bed nursing home, $10,000,000
Mercy Health-Lakeshore, replace CT scanner/replace 15 beds in new space (Muskegon), $546,039
Mercy Health Saint Mary’s, MRI No. 88 at Byron Center, $500,000
Mercy Health Saint Mary’s, renovate 9th floor, $9,661,660
Mercy Health Saint Mary’s, MRI No. 64 at Byron Center, $500,000
Mercy Health Saint Mary’s, add 28 medical psych beds, N/A
Mercy Health Saint Mary’s, relocate 88 beds to Pine Rest, N/A
Mercy Health Saint Mary’s, replace MRT unit, $2,832,030
Mercy Health Saint Mary’s, add one fixed CT scanner, $535,000
Metro Health Hospital, replace MRI unit, $17,160,000
Metro Health Hospital, PET network 126 at Southwest Plaza, $459,000
Metron of Belding, new 25-year lease, $35,000,000
Metron of Big Rapids, new 25-year lease, $30,000,000
Metron of Cedar Springs, new 25-year lease, $24,000,000
Metron of Greenville, new 25-year lease, $36,000,000
Metron of Ionia, new 25-year lease, $36,000,000
Metron of Lamont, new 25-year lease, $12,000,000
Pine Rest Mental Health Services, add 20 geriatric psych beds/88 adult psych beds, $495,000
Pine Rest Mental Health Services, add 14 adult psych beds, $490,000
Pine Rest Mental Health Services, temporary use of space, $800,000
Resthaven Care Center, replace 10 beds, $2,181,900
Sheridan Community Hospital, replace fixed CT scanner, $620,281
Southwest Michigan Imaging, replace one fixed CT scanner, $1,940,055
Sparrow Ionia Hospital, replace fixed CT scanner, $643,575
Spectrum Health, upgrade existing MRI South Pavilion, $680,707
Spectrum Health, replace portable CT scanner, $409,498
Spectrum Health Rehab, acquire 250-bed hospital/long term care unit, $51,719,040
Spectrum Health Blodgett, renovate existing space on 5th floor, $7,246,568
Spectrum Health Butterworth, renovate non-clinical space, $1,932,000
Spectrum Health Butterworth, renovate 2nd floor, $6,703,000
Spectrum Health Butterworth, add one CT scanner, $2,300,516
Spectrum Health Kent Community, lease 40-bed acute care hospital for 20 years, $10,607,780
Spectrum Health Lemmen Holton Center, replace fixed MRI, $2,863,540
Spectrum Health Lemmen Holton Center, replace MRT unit, $4,102,656
Spectrum Health Ludington, relocate 14 adult psychiatric beds, N/A
Spectrum Health Special Care, new long-term acute-care hospital with 36 beds, $3,262,508
Spectrum Health Special Care, acquire 36-bed, long-term acute care hospital/20-year lease, $16,320,150
Spectrum Health/Holland Hospital Health Pointe, MRI network No. 21, $4,759,512
Spectrum Health/Holland Hospital Health Pointe, initiate fixed CT scanner, $1,733,559
St. Ann’s Home, replace eight beds in new space, $4,369,855
Tendercare of Ludington, acquire 93-bed nursing home, $17,645,251
West Michigan Air Care, replace air ambulance, $7,190,950
West Michigan Cancer Center, replace MRT unit, $3,283,438
West Michigan Rehabilitation, acquire 65-bed nursing home, $121,388,997
West Michigan Surgical Center, new freestanding outpatient surgical center OR, $5,411,084
Source: Michigan Department of Community Health