Bills that would begin to dismantle the state’s innovation-stifling process for approving and regulating health-care facilities died in the House Health, Welfare and Institutions Committee yesterday, reports Tammie Smith with the Times-Dispatch. Del. John M. O’Bannon III, R-Henrico, a physician, asked that his deregulation bill be stricken after a key stipulation was removed during a hearing. Smith provides some of the background:
Lobbyists for hospitals, nursing homes, physician specialties and other groups spoke for and against aspects of O’Bannon’s bill, which would have made several significant changes. For instance, projects would no longer need approval from regional planning agencies. Also, equipment valued at less than $500,000 would be exempt from the regulatory process.
As it stands, proposals for new medical facilities or costly pieces of equipment must go through a regulatory process, with local planning agencies considering how the service or equipment will affect the health-care market and recommending for or against approval. The state health commissioner ultimately signs off on regulated
projects.
Critics have charged that this regulatory process protects existing health care providers by restricting the entry of new players into the marketplace. Some say the future of health care is to evolve from a system of general hospitals, whcih provide a wide range of services, to medical “factories” specializing and excelling in particular disciplines and procedures. The specialists tend to have higher productivity, lower costs and better patient outcomes. But hospitals, which dominate Virginia’s health care industry, claim that such competition would “skim the cream,” and make them less profitable. As a consequence, Virginia has very few focused medical enterprises.
The health care system is so complex, of course, that no one set of changes will bring health care inflation under control. But a good starting point would be to encourage new business models in a sector where such innovation is conspicuously lacking.
Does anyone seriously think that an economic sector regulated by state government and policed by the established health care constituencies can build a better mousetrap? As O’Bannon put it: “The question is how tightly are we going to control health care in Virginia? Are we going to control it down to every blood pressure cuff?”
