The more hospitals in South Carolina seek to expand or add expensive new technology, the more important it is for the legislature to answer some key questions:
• Should the free market dictate when such expansions are undertaken, or should the state make the call?
• Does the present Certificate of Need program, prescribed by law and administered by the S.C. Department of Health and Environmental Control – or DHEC – actually restrain health care costs? • Does it prevent unnecessary duplication of expensive medical services?
• If not, does the law need to be amended or should it be scrapped?
Ask any two hospital administrators and you’ll probably get two answers. Members of the legislature are just as likely to be of two minds.
But S.C. Gov. Nikki Haley’s 2013 veto of the money to support the program (about $1.4 million), DHEC Director Catherine Templeton’s subsequent suspension of the program and the S.C. Supreme Court’s recent ruling that DHEC must operate it, all demand that the legislature examine the issue and fix it.
S.C. Sen. Thomas Alexander, R-Oconee, chairman of the Senate budget subcommittee that oversees DHEC’s budget, plans to restore money for the program in the budget year beginning July 1. S.C. Sen. Harvey Peeler, R-Cherokee, has sponsored a bill that would reform the law by requiring the loser of a certificate of need appeal to pay the winner’s legal fees.
Haley wants the law eliminated altogether.
It’s past time for an informed, data-driven discussion of the Certificate of Need program.
In 1974, a federal law required all states to regulate new health care construction and technology investments. In 1987, when the government lifted that mandate, 14 states ditched their certificate of need programs.
Now, 36 states, including South Carolina, maintain such a program.
There should be ample data for the legislature to obtain from other states indicating whether Certificate of Need programs contain costs; whether the free market allows for duplication and hence higher costs to patients; and whether states have tweaked their laws to make them more effective.
Revisions in the law might be needed to facilitate a process less cumbersome to hospitals, or to provide clearer guidelines as to what constitutes duplication of services.
Meanwhile, the S.C. Hospital Association says health care providers are at sea. Some projects are stalled and some providers are moving forward without regulatory approval.
Haley, who was paid $110,000 a year to raise funds for the Lexington Medical Center Foundation, saw the issue up-close as the center fought for permission to open a heart surgery unit. She is no fan of the Certificate of Need process and has opposed it at every opportunity.
S.C. Rep. Brian White, R-Anderson, and S.C. Rep. Murrell Smith, R-Sumter, contend that the S.C. House of Representatives, when it upheld Haley’s veto, did not intend the program to be abolished.
The situation as it stands now is in a muddle. The legislature needs to figure out what is best for health care and health care costs and make it law.