Harvey Peeler

South Carolina hospitals breathed a collective sigh of relief when the General Assembly overrode Gov. Nikki Haley’s veto of funding for the certificate-of-need program last week, but they’re still nervous about its future and are gearing up for a fight to save it.

They’re likely to get that fight from state Sen. Harvey Peeler, who told Greenvilleonline.com that he’ll introduce a bill next session to end the program or at least give it a “major overhaul.”

The Department of Health and Environmental Control’s certificate-of-need review program is designed to prevent unnecessary duplication of high-ticket items, like multi-million-dollar imaging systems and new hospitals where none are needed.

Haley vetoed funding for the program, saying it represents “politics at its worst.”

“Health care decisions should be decided by real community needs, not by Columbia politics,” she wrote in her veto letter to House Speaker Bobby Harrell.

That sent the health care community into action, with the South Carolina Hospital Association alerting its members to push legislators for the override.

“Some of the comments made in the Senate highlight what I would consider to be a misunderstanding of how health care works in this country,” said that association’s executive vice president, Allan Stalvey. “It’s so much different than other businesses.”

But Peeler, who is chairman of the Senate Medical Affairs Committee, said the CON process needs to be “totally overhauled from bumper to bumper.”

The Cherokee County Republican said he watched with disgust as factions in his district fought over the right to open a multi-million dollar radiation treatment center for cancer patients. The battle took years, he said, and in the end, they both set up the service.

“They get tired of fighting or run out of money,” he said. “But the loser is the patient who needed treatment. While they’re arguing in the courts, there are constituents out here who are suffering.”

And sources say Haley’s view is colored by a decade-long CON fight in Columbia involving three hospitals, one of which she worked for, that battled over lucrative open-heart services. In the end, the entities reached an agreement themselves.

Peeler says the health care landscape should be left up to competition.

“The state is now in the position of picking winners and losers and it takes forever to get these things resolved,” he said. “Competition drives quality up and price down.”

But while more competition resulting in lower charges is a “wonderful economic theory,” it doesn’t work in health care, said Columbia health care consultant Lynn Bailey. Eliminating CON would mean chaos in the provider community, which will increase costs, she said.

Federal law requires hospital emergency rooms to see everyone, whether they’re insured or not. Many of those patients are admitted for costly care they can’t pay for, Bailey said. Hospitals use paying patients and lucrative services to offset those costs.

Without a CON process, companies could set up specialty centers for profitable services, such as orthopedic surgery, and cherry-pick the better-paying and least sick patients, she said. General hospitals would then be left without enough resources, forcing them to close or end low-revenue services.

“Imagine what happens to the balance sheets,” said Stalvey, who says protracted CON fights and political involvements are rare. “Eventually, I’m not sure they can maintain financial viability.”

Malcolm Isley, vice president of strategic services for Greenville Hospital System, said the CON process is important to efficient health services planning. It allows facilities to make their business case and demonstrate the need to make sure health care dollars are being used wisely.

“The ideas behind CON are valid,” he said. “Without it, we won’t have that level of oversight.”

That’s even more important as health reform, with its emphasis on containing costs, is rolled out, he said.

Bon Secours St. Francis Health System also issued a statement supporting the CON program, which averages about 65 applications a year on its $411,317 budget, said DHEC spokesman Adam Myrick. It also decides about 200 other related cases, he said.

Courtesy of The Greenville News