James Jan-Feb 2024 web - Flipbook - Page 74
application, the odds of denial
more than double from 20 percent to about 50 percent. Every
additional party opposed to the
application increases the odds of
denial by about 11 percent.
Any opposition to an application adds 234 days to the wait
time for a decision; but direct
competitor opposition adds
about 520 days. Each additional
party opposed to the application
adds another 129 days.
Defenders of the existing
CON system continually encourage those wishing to open or expand healthcare services to just
“file for a CON.” Thankfully, both
study committees acknowledged
just how time- and resource-consuming the CON process actually
is. Especially once the seemingly
endless appeal process has added additional delays.
As we concluded in the study,
filing for a CON often does not represent a realistic route to approval
for most applicants that are not
health systems or hospitals. Many
smaller physician offices choose
to forgo equipment purchases or
upgrades out of an acceptance
they will not be able to compete.
BARRIERS BLOCK FACILITY
In 2021, the Augusta Birth
Center applied to become the
first freestanding birth center
for low-risk pregnancies, including midwifery— but also mental
health services, women’s support
groups, adoption, postpartum
counseling and additional classes
for the community at little cost.
Expectant mothers in the
Augusta area have traditionally
had three local options to choose
from for birthing services: Doctors Hospital of Augusta, Piedmont Augusta (formerly University Hospital) and the recently
renamed Augusta University
Medical Center, which is now
known as Wellstar MCG Health.
Yet only one of the hospitals
provides midwifery services.
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Augusta Birth Center (ABC)
was to be located in the Laney
Walker district, home to a historically underserved population.
The three founders included a
board-certified family physician,
a board-certified family nurse
practitioner and the executive
director, Katie Chubb. Certified
nurse midwives and nurses would
complement the medical staff.
And yet, over two years after
first submitting its application to
open, the center remains unopened thanks to CON.
To begin the process, ABC
submitted an 821-page application to the Georgia Department of
Community Health. As Ms. Chubb
later noted regarding this submission, the information was more exhaustive than any business plan
required by a bank before approving a multimillion-dollar loan.
Four months later, on Dec.
22, 2021, the Department denied
ABC’s application—- despite
acknowledging the need for this
facility. It’s worth examining why
the application was denied.
First, the Department examined the service area and the
amount of obstetrical services
being utilized to determine whether ABC was needed. This area not
only comprised Richmond County,
but also Burke, Columbia, Glascock, Jefferson, Jenkins, McDuffie, Taliaferro, Warren, Washington
and Wilkes counties, demonstrating the region’s need for another
obstetrics provider.
Next, the Department wanted to compare the price of an
“uncomplicated delivery” at ABC
with that of nearby hospitals. This
was done using cost data provided to the state by the hospitals.
ABC’s projected charge in
years one and two was $5,000,
which was significantly lower
than University Hospital ($7,371),
AU Medical Center ($15,024), and
Doctors Hospital ($22,552).
Unsurprisingly, the Department concluded that ABC would
provide lower-cost services than
neighboring hospitals offered on
an inpatient basis.
“COMPETITOR’S VETO”
Finally, the Department of
Community Health wanted to
determine whether a patient
suffering from complications
during childbirth would be able
to access emergency services.
Georgia’s CON law requires birth
centers to have a transfer agreement with a local hospital.
Despite having an agreement
with two ambulance companies and a physician with local
admitting privileges, ABC could
not persuade any of the three
hospitals to sign a transfer agreement. This gives credence to the
nickname many have given CON
laws: the “competitor’s veto.”
Defenders of CON argue that
the long-term sustainability of
community hospitals depends
on maintaining profitable service
lines such as imaging and elective surgeries. They believe CON
is needed to protect these hospitals from competition for these
procedures. Yet our research
shows that Georgia has experienced more hospital closures
than states with similar rural
profiles that have reduced or
repealed CON laws.
The state’s five largest health
systems control over half of the
state’s hospital beds. Standard
economics suggests that as
competition is throttled, healthcare costs will tend to rise. And
indeed, 70 percent of the studies
we reviewed associate CON laws
with higher spending on healthcare services.
CON laws do not work as intended. Not only do they provide
an unnecessary barrier to healthcare innovation and delivery, they
also make it harder for communities to replace any healthcare
providers they might lose.
Chris Denson is Director of Policy and Research
for the Georgia Public Policy Foundation.