OUR HEALTH care delivery system is complex and rapidly evolving. As health care professionals, we must adapt to this changing environment while providing high-quality care to patients when they or a loved one have a medical need, no matter the time or day.
In Virginia, certificate of public need (COPN) is a vital aspect of our complex health delivery system that’s often not widely understood.
COPN is a review process for proposed health care facilities, equipment, and services. It applies to hospitals, providers, and medical facilities. It doesn’t impact patients’ ability to access care.
COPN has existed for many years in the commonwealth, as it has in the majority of states. It serves an important function: to help control health care costs, promote access to care, and prevent selective over-expansion that could threaten our health care safety net.
It’s an essential part of Virginia’s safety net that applies conditions to offset the charity care inherent in our health system. In 2017, more than $713 million in Virginia charity care was provided under COPN conditions.
The presence of charity care demonstrates that unlike other industries, the American health care system isn’t a true free market. Under federal law, hospitals must provide emergency care to people even if they are uninsured or can’t pay for treatment.
Hospitals also render discounted medical services to patients insured by Medicare and Medicaid, which reimburse at rates below the true cost of providing that care.
In 2017, Virginia hospitals absorbed more than $1.7 billion in losses from charity care and reimbursement shortfalls. That doesn’t include $550 million in unpaid medical services.
In 2016, Mary Washington Healthcare provided over $53 million in charity care in our local community. It’s difficult to think of another industry that’s required by government to provide free or discounted services to customers.
I don’t want to be misunderstood: Virginia hospitals willingly provide services to patients in need, regardless of their ability to pay. That is the foundation of our community-based mission, of which we are proud.
But in order to keep the health system functioning, it is essential to preserve COPN, which has been the target of repeated attacks.
The justification for those attacks centers around an argument that ending COPN will increase access and lower costs. The problem is that those claims don’t match up with reality. Other states that pursued similar health care deregulation have experienced unintended consequences that didn’t lower costs, expand access, or benefit patients.
Take Pennsylvania, which rescinded its certificate of need (CON) program in the 1990s. Since then, the state has seen a spate of hospital closures resulting in 49 fewer hospitals in 2015 than before CON repeal.
That’s not more patient access to health care. It’s less.
Ten years ago, Texas deregulated freestanding emergency departments on promises that such a move would reduce health care costs and increase patient access.
What happened instead is that new facilities targeted heavily populated, affluent areas where most patients had commercial insurance. And most of these new medical providers didn’t accept Medicare and Medicaid patients.
By concentrating in areas with ample health care services while neglecting underserved areas, patient access didn’t increase. Instead of savings, Texans received expensive bills for routine care.
The promise of health care deregulation is rarely a panacea. New market entrants tend to be primarily interested in “skimming off the cream” by offering select, specialized medical services on weekdays during normal business hours.
Hospitals, in contrast, offer a full range of services to meet community health needs 24/7/365. These include essential but often unprofitable services like trauma and burn care, psychiatric and behavioral health treatment, high-risk obstetrics, and many more.
The presence of COPN helps preserve availability and community access to the full scope of health care services, many of which aren’t profitable, yet are still necessary. These services would be endangered if COPN were repealed.
COPN critics aren’t interested in offering these essential services and don’t have plans to replace them. For that reason, any potential COPN changes should be undertaken cautiously and comprehensively.
Virginia’s hospital community has consistently supported meaningful COPN reform and modernization.
Deregulation pursued in the 1980s was postponed in the 1990s. Legislation in 2001 to responsibly unwind COPN and account for charity care and essential services had hospital support, but the commonwealth didn’t fund that plan.
And Virginia hospitals also supported recommendations from a 2015 state work group to update and reform COPN while preserving it. Those recommendations have not been enacted.
The health care community is committed to partnering with state officials to enhance our health delivery system and provide the best care to patients. That includes evaluating ways to improve the COPN framework so that it continues to function as an important tool to offset charity care, stabilize the health delivery system, and support the economy.
Michael P. McDermott, MD, MBA, is an interventional radiologist by training and the President and Chief Executive Officer of Mary Washington Healthcare.