by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
A few days ago, the Federal Trade Commission (FTC) issued a statement that endorses HB 200, a bill filed by the House that proposes to narrow the scope of Certificate of Need (CON) review for the establishment of diagnostic centers, ambulatory surgery centers, operating rooms, and psychiatric hospitals. In the words of the FTC:
CON laws may further harm competition because competitors may take advantage of the CON process to protect their market share.
For instance, an incumbent firm may file challenges or comments to a potential competitor’s CON application merely for the purpose of thwarting or delaying competition. As noted in the FTC-DOJ report, Improving Health Care: A Dose of Competition, existing firms can use the CON process “to forestall competitors from entering an incumbent’s market.
The FTC even suggests that the House take a step further to completely repeal centralized planning for ambulatory surgery centers (ASCs). The written legislation exempts these same day surgery centers from state review in counties with a population above 100,000 as a way to protect the downward spiral of rural health care infrastructure. However, I’ve written before how a complete CON repeal does not directly contribute to already struggling health care facilities in rural areas, and that the House bill’s population threshold for ASC establishment can actually hinder better access for patients in such areas.
The FTC seems to agree:
We also note that Section 7(f)(4) of HB200 requires ambulatory surgical facilities seeking licenses to operate in counties with populations under 100,000 people to obtain written support and a written transfer agreement from each hospital located within the county. Although we recognize that this provision may be intended to ensure access to care and patient safety, it also could be improperly used by incumbent hospitals to block a potential competitor’s license. We respectfully encourage you to consider whether there are other ways – less prone to anticompetitive manipulation – to achieve access and patient safety goals.