Tag Archives: COPN

Hospital beds: Not enough

by James C. Sherlock

Virginians have read my complaints for years that Virginia’s Certificate of Public Need (COPN) law has artificially reduced supply of healthcare facilities in Virginia, driving up prices and reducing access. Legislators who believe as I do have not won the argument for the past 30 years in Richmond.

Unfortunately, I offer the tragic proof that the hospital industry can figure out how many hospitals, hospital beds and ICU beds are needed far better than bureaucrats can.

From Becker’s Hospital Review^[1] 22 hours ago:

The demand for hospital beds in the U.S. is projected to far exceed capacity by mid-April, according to an analysis from the University of Washington’s Institute for Health Metrics and Evaluation in Seattle.  … According to the model, 20 states will face a shortage of ICU beds when COVID-19 peaks.

Thirty five states and Washington, D.C., operated a Certificate of Public Need^[2] program as of December 2019. Continue reading →

by James C. Sherlock

Every time the discussion in this space turns to COPN and its relationship to lack of capacity to deal with COVID-19, some commenters accuse the authors of these columns of favoring nonsensical solutions such as forcing hospitals to build excess capacity. Those same commenters then reject those concepts as unworkable. That is the very definition of a straw man. Unfortunately it mirrors what will be a all-hands-on-deck attempt by Virginia’s hospitals and their lobbyists to sweep the damning history of COPN under the rug in the 2021 General Assembly.

No author has suggested building excess capacity to “sit idle”; what we each have suggested is to let commercial businesses, both for-profit and not-for-profit, build what they think is necessary where the think it is necessary without state interference other than enforcement of antitrust and licensing laws. Every one has carefully wrought business plans. If some misjudge demand, then either they will fail or their competitors will. If it existing provider facilities fail, that means that the new entrant offered better care or a better price or both. Any restrictions on such creative destruction must be swept away for the good of all of us.

What about day-to-day non-crisis access for the poor?

“Recent research by Thomas Stratmann and Jacob Russ demonstrates that there is no relationship between CON programs and increased access to health care for the poor. There are, however, serious consequences for continuing to enforce (COPN) regulations. In particular, for Virginia (COPN restrictions) could mean approximately 10,800 fewer hospital beds, 41 fewer hospitals offering magnetic resonance imaging (MRI) services, and 58 fewer hospitals offering computed tomography (CT) scans. For those seeking quality health care throughout Virginia, this means less competition and fewer choices, without increased access to care for the poor.”^[1] Continue reading →

The Arlington hospital referral region had the highest ICU capacity gap in the country in this 2018 American Hospital Association survey.

by James C. Sherlock

The Northern Virginia Community Hospital in Arlington was bought by HCA in 2002.  The Arlington facility was closed in 2006 to comply with a 2005 Certificate of Public Need (COPN) decision that required HCA provide “trade-in” beds in the same health region to gain state permission to build a hospital in Loudoun County. (See this Washington Business Journal story. You will see that the business press knew the deal back in 2002.)

Regular Virginians have to ask why in the world HCA was required to buy and close the Arlington facility to build 30 miles away in Loudon County. And why in the world was the state involved in such a business decision in the first place?

In approving that application, the Health Commissioner reversed the recommendation of the DCOPN staff. We don’t know the reasoning for either the staff recommendation or the Commissioner’s reversal. Was some formula used? Why did Arlington, with its population far higher than when Arlington Hospital Center (now the only hospital in Arlington) was built, suddenly need fewer hospital and ICU beds? We know only the outcome.

The Commissioner was presented with a Hobson’s choice as a result of esoteric COPN rules devised by the VDH itself. A hospital in Arlington or a hospital in Loudon?  “Both” was not historically an available decision. After 47 years of COPN, that is what has evolved.

Continue reading →

by James C. Sherlock

Do Not Regulate Surgical Decisions 

There are things the state should not do during an emergency. Regulating elective procedures is one of them. I agree with the statement of the hospitals^[1].  If we had more hospitals and far more physician-owned ambulatory surgical centers, the problem would have an alternative solution. But we don’t because of 47 years of Certificate of Public Need regulation. The decisions of Virginia’s Health Commissioners artificially limiting supply are available in state records for all to see.

A key reason I agree with the hospitals position that decisions on surgery should remain at the local level is that even if some might think such things should be regulated by the state, and I don’t, it is far too late for intervention in a matter that the state is not set up to oversee. Blind regulation is a terrible thing to contemplate.

Deal with the Connected Issues of COPN and State Oversight of the Business of Healthcare

The Governor just waved Certificate of Public Need (COPN) restrictions, but effectively only for certificate holders. The Governor and the General Assembly can heavily reduce the restrictions in COPN or repeal it next year, but there are legislative solutions immediately available that can help. In the upcoming special session, the General Assembly should pass two bills that were laid on the table in the House of Delegates earlier this year: Continue reading →