CERTIFICATE OF NEED NOT NEEDED
Alaska state law currently requires a "Certificate of Need" from the state government to open certain medical facilities. I think that's improper, and I'm one of the prime sponsors of an initiative to address the question. I have also sponsored a bill on the same subject, HB287, that would eliminate the need for the initiative to continue. Following is my testimony introducing my bill to the House Education and Social Services Committee (HESS):
Mr. Chair, Honorable Members of the HESS Committee:
Thank you for hearing HB 287 today. I’m the prime sponsor of this bill, and Representatives Coghill, Chenault, and Kohring are co-sponsors. As a matter of disclosure, I’m also a sponsor of an Initiative on Certificate of Need issues, along with Representative Kohring and Mr. Paul Fuhs - and that initiative has already been certified for the ballot. The principal difference between the bill and the initiative, is that the initiative pertains to every place in Alaska, and my bill pertains only so places with a population exceeding 25,000. However, I want to focus only on my bill, as that is the subject before the committee.
I would ask the committee to consider this bill from three different, but complementary, viewpoints.
1. Protect traditional American free enterprise;
2. Increase availability of medical care and choice of provider; and
3. Create potential cost savings for patients and worker’s compensation costs.
Personally, I think protecting free enterprise is as American as apple pie. If we want to go in business together, we shouldn’t have to go “hat in hand” to the government and beg for a Certificate of Need. It shouldn’t matter whether that Certificate of Need is for a hot dog stand, a grocery store, or a medical facility. The free market should decide if a health care facility, or any other business, is needed – not some self-serving government bureaucracy. A Certificate of Need, in effect – and for example - gives Anchorage and Fairbanks hospitals a government de facto monopoly. We need more competition, not less. Free enterprise motivates excellence, encourages lower prices through competition, and benefits consumers.
Secondly, people suffering health problems need more choice of medical providers, not less. When I get sick, I want to be able to choose my own caregiver – and not have the government limit my choices with a Certificate of Need, that limits my choice. When I go shopping for a new computer, things usually turn out better if I have a wide range of dealers and models to choose among. Of course, finding the medical provider with the best service, and with whom we have the most trust, is infinitely more important, and perhaps even aids one’s successful recovery.
Third, medical costs in Alaska are reaching crisis levels, and it hurts everybody. Passage of this bill should help lower the escalating costs of Worker’s Compensation, and the overall costs of medical care for the state, companies, and families. Typically, monopolies increase costs. Competition lowers costs. That’s Economics 101.
Lastly, there’s been some major differences of opinion over fiscal notes – what is legitimate to include, and what is not. For example, the original fiscal note for the initiative – almost identical to my bill, except for no population exemption – came in at an incredible 41 million bucks. When questioned, we were told that the fiscal note would be lowered to about half that figure. Saved about 20 m illion with on e question. Good thing I asked the question! And, as you will hear from witnesses, we think that figure is also unrealistic, and way on the high side. This bill should not be compromised with unsustainable fiscal notes –that’s inappropriate, that’s not fair.
In summary, please evaluate this bill on its merits. Those merits pertain to the medical availability, choice of health provider, legitimate cost savings to all concerned, and especially the time-honored principles of American free enterprise. HB 287 is my designated priority legislation, and your support of this bill is respectfully requested.
NOTE: Several people testified on both sides of the issue. The bill was held for another hearing.
Mr. Chair, Honorable Members of the HESS Committee:
Thank you for hearing HB 287 today. I’m the prime sponsor of this bill, and Representatives Coghill, Chenault, and Kohring are co-sponsors. As a matter of disclosure, I’m also a sponsor of an Initiative on Certificate of Need issues, along with Representative Kohring and Mr. Paul Fuhs - and that initiative has already been certified for the ballot. The principal difference between the bill and the initiative, is that the initiative pertains to every place in Alaska, and my bill pertains only so places with a population exceeding 25,000. However, I want to focus only on my bill, as that is the subject before the committee.
I would ask the committee to consider this bill from three different, but complementary, viewpoints.
1. Protect traditional American free enterprise;
2. Increase availability of medical care and choice of provider; and
3. Create potential cost savings for patients and worker’s compensation costs.
Personally, I think protecting free enterprise is as American as apple pie. If we want to go in business together, we shouldn’t have to go “hat in hand” to the government and beg for a Certificate of Need. It shouldn’t matter whether that Certificate of Need is for a hot dog stand, a grocery store, or a medical facility. The free market should decide if a health care facility, or any other business, is needed – not some self-serving government bureaucracy. A Certificate of Need, in effect – and for example - gives Anchorage and Fairbanks hospitals a government de facto monopoly. We need more competition, not less. Free enterprise motivates excellence, encourages lower prices through competition, and benefits consumers.
Secondly, people suffering health problems need more choice of medical providers, not less. When I get sick, I want to be able to choose my own caregiver – and not have the government limit my choices with a Certificate of Need, that limits my choice. When I go shopping for a new computer, things usually turn out better if I have a wide range of dealers and models to choose among. Of course, finding the medical provider with the best service, and with whom we have the most trust, is infinitely more important, and perhaps even aids one’s successful recovery.
Third, medical costs in Alaska are reaching crisis levels, and it hurts everybody. Passage of this bill should help lower the escalating costs of Worker’s Compensation, and the overall costs of medical care for the state, companies, and families. Typically, monopolies increase costs. Competition lowers costs. That’s Economics 101.
Lastly, there’s been some major differences of opinion over fiscal notes – what is legitimate to include, and what is not. For example, the original fiscal note for the initiative – almost identical to my bill, except for no population exemption – came in at an incredible 41 million bucks. When questioned, we were told that the fiscal note would be lowered to about half that figure. Saved about 20 m illion with on e question. Good thing I asked the question! And, as you will hear from witnesses, we think that figure is also unrealistic, and way on the high side. This bill should not be compromised with unsustainable fiscal notes –that’s inappropriate, that’s not fair.
In summary, please evaluate this bill on its merits. Those merits pertain to the medical availability, choice of health provider, legitimate cost savings to all concerned, and especially the time-honored principles of American free enterprise. HB 287 is my designated priority legislation, and your support of this bill is respectfully requested.
NOTE: Several people testified on both sides of the issue. The bill was held for another hearing.
posted by Blogs by Rep Bob Lynn | 7:39 PM
2 Comments:
I am presenty a student of masters degree in healthcare administration and we always come across studies related to certificate of need (CON). During our studies, I am pretty convinced that CON does not effectively address the issue of quality and decreasing cost. In fact, CON does the reverse. You were right about your points about CON and does need to be totally removed.
Economics 101 by the way also say, in a free enterpise, the best scenario always is the least government intervention.
I am presenty a student of masters degree in healthcare administration and we always come across studies related to certificate of need (CON). During our studies, I am pretty convinced that CON does not effectively address the issue of quality and decreasing cost. In fact, CON does the reverse. You were right about your points about CON and does need to be totally removed.
Economics 101 by the way also say, in a free enterpise, the best scenario always is the least government intervention.
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