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Certificate of need laws may hurt health care in Vermont

By   /   October 6, 2016  /   News  /   No Comments

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HEALTH CONS: A new study finds states with certificate of need laws have higher death rates in state hospitals. The laws decrease the quality of care and increase costs, according to two newly released studies from George Mason University.


Certificate of need laws decrease the quality of care and increase costs, say two newly released studies from George Mason University. The finding has implications for Vermont, which has the most extensive CON laws of any state.

CON laws restrict entry for new practices to enter a state’s health care network by mandating that applicants prove the community need that their proposed service would fill.

In Vermont, the Green Mountain Care Board evaluates certificate of need applications and sets standards for facility use and the number of procedures allowed through a facility. As of 2016, Vermont leads all states with about 30 CON laws.

Proponents of CON laws say the laws control wasted resources. Insurers make health care overly-available, some argue, and so the regulation of new facilities prevents excess.

proponents say. By controlling the number of facilities, CON laws control wasteful over-access.

“Not all access to care is positive. (Studies show) about one third of health care is unnecessary,” Green Mountain Care Board Chair Al Gobeille told Vermont Watchdog.

In the first study by George Mason University, researchers looked at health systems that spanned the borders of connected states, one side with CON laws, and the other without. The study found that hospitals in CON states have lower care in eight of nine categories, resulting in patient death rates between 2.5 percent and 5 percent higher than non-CON counterparts.

Death for inpatients with serious treatable conditions at CON facilities was between six and eight deaths higher than non-CON hospitals for every 1,000 surgical discharges. Pneumonia deaths increased six to eight patients for every thousand treated with the disease. Heart failure deaths and heart attack readmission rates were also significantly higher for hospitals in certificate of need states.

At the first all-payer health care public hearing on Monday, Gobeille said balancing cost and quality is the most difficult job of the board. “We have to balance access, quality and cost … what point is (quality) too low?”

However, the second study found no evidence that lower costs balanced out lower quality in CON states. After analyzing the findings of 19 academic studies spanning 40 years of research, George Mason researchers found that per unit costs of treatment go up, along with hospital investments and total patient expenditures.

The evidence, said researchers, pointed to an interest-group theory of regulation, meaning already established practices push lawmakers to limit new competition for the good of their own businesses, rather than the good of the public.

Amy Cooper, executive director of HealthFirst, believes special interest groups are behind Vermont’s proliferation of CON laws. Cooper has a certificate of need application before the board to open an ambulatory surgery center in Colchester. The center would be led by independent surgeons.

“There is a very strong lobby from the Vermont Hospital Association,” she said. “Incumbents are pressured to shape laws which shape monopolies.”

Cooper’s practice would be in direct competition with hospital facilities, able to operate at about half the cost for patients with no sacrifice of quality.

The Mediare Payment Advisory Commission has vocally supported abulatory surgical centers before Congress, citing convenience for patients and doctors as well as reduced reimbursement compared to hospital facilities. Vermont has only one such center in the state — the lowest ratio per-capita for any state in the nation.

“Vermont is an unfriendly environment to innovation,” Cooper said. Her group, ACTD LLC, has already spent hundreds of thousands of dollars on the required application components. These requirements make it incredibly hard for any health provider to start in Vermont, she said, because they have to have the initial capital to attempt the application process.

The study recommended free-market practices, letting consumers naturally weed out expensive or low-quality practices without government regulation through CON laws.

Contact Emma Lamberton at [email protected]


Emma Lamberton is Vermont Watchdog’s health care and Rutland area reporter. She has written for the Rutland Herald and Times Argus, two of Vermont’s largest newspapers, and her work has published in The Washington Times, FoxNews.com and a number of local Vermont newspapers. She is also a member of Investigative Reporters and Editors. Emma is always looking for new stories. Readers are encouraged to contact her with tips and story ideas.