The Need for COPN
They say everything is bigger in Texas.
That certainly appears to be the case when it comes to a Lone Star State mess created by health care deregulation that has not enhanced access to care, and instead has sent health care costs skyrocketing.
Virginians might wonder why problems in Texas’ health care system should concern them. Here’s why: a similar deregulation effort is underway in the Commonwealth. If it succeeds, our health care system and the patients it serves could suffer.
In 2009 a Texas law change allowed freestanding, non-hospital emergency departments to sprout like weeds. Advocates for the law change called it a health care free market cure-all that would improve rural health care access and lower costs.
If that sounds familiar, it’s because those same claims are made by those who want to deregulate Virginia’s certificate of public need (COPN) system. Contradicting those claims are data showing our COPN regulatory system ensures that health care assets are appropriately distributed across the Commonwealth to meet patient needs. COPN also prevents costly over-expansion, and helps offset hospital-provided charity care inherent in our health care system.
In the years since, the unintended consequences have wreaked havoc on Texas’ health care system. Instead of strengthening the health care system for patients, Politico reported, deregulation in Texas resulted in a “permissive regulatory environment [that] has done little to improve rural emergency services, and has instead created a haven for entrepreneurs some accuse of fleecing customers and raising health care costs.”
“By situating in well-off neighborhoods,” the Washington Post reported, these facilities “largely avoid patients who couldn’t pay. Without a hospital affiliation, they cannot bill Medicare or Medi¬caid for emergency care, and many carry warnings on the front door that they do not accept those less-lucrative plans.”
In contrast, Virginia’s community hospitals treat patients 24/7/365, regardless of ability to pay. That is consistent with their public health missions, and also a federal requirement. Naturally, that means they incur substantial uncompensated charity care, all while serving as essential health service providers and economic pillars employing thousands and contributing billions to our economy. In contrast, as a result of health care deregulation Pennsylvania lost 48 hospitals over 18 years after their certificate of need law expired. When Ohio repealed its certificate of need law 15 hospitals closed over the following four years, primarily in low-income areas. Unlike Pennsylvania and Ohio, Virginia has not experienced the misfortune of multiple hospital closures, thanks in part to our COPN system.
As the leading business community advocate, The Hampton Roads Chamber supports retaining the Certificate of Public Need law as it serves an important component of health care policy in Virginia. COPN is designed to create stability in our health care delivery system, control costs and ensure the quality of and access to health care services. COPN promotes access to care for the uninsured and the availability of health care services throughout all corners of the commonwealth.
Having a strong health care system is critical to public health, and Virginia’s economic prosperity and vitality. Virginia’s strong health care system is an attractive asset to business leaders and thus contributes to economic development. Our hospitals consistently earn accolades for excellence in patient safety and quality. Additionally, Virginia also has the necessary capacity to meet patient needs with more than 18,800 licensed hospital beds and an occupancy rate below 60 percent. And our health care costs compare favorably to other states. Analysis shows that 10 of the nation’s non-certificate of need states (or 63 percent) have higher per capita health care costs than Virginia, and 10 non-certificate of need states have higher expenses per hospital inpatient than Virginia. On both measures, Virginia is below the national average of $6,815 for per capita costs, and $3,212 for per hospital inpatient expenses.
As a business leader, I believe in a free market. But an honest discussion of COPN requires an open acknowledgment that health care simply is not a free market. A free market system requires a level playing field. However, we don’t have a level playing field here. Repealing COPN would make an already uneven playing field even more slanted. And that concerns the business community. We should always look for ways to sensibly improve our regulatory system. Yet when it comes to health care regulations, to borrow a phrase, Virginia should avoid messing with Texas, or the worrisome examples of other states, by taking actions that risk harm to our high-quality health care system, and threaten Virginians’ access to quality, affordable health care.
Bryan K. Stephens
President & CEO
Hampton Roads Chamber