WHEN YOU’RE having a heart attack, you don’t usually call around to compare prices at the local hospitals. You’ll probably have a colonoscopy where your physician schedules it, not at the place you’ve chosen after studying prices vs. results. Even more mundane medical care tends not to be particularly price-sensitive either, because insurance usually covers most of the cost.
Those are the realities behind the certificate of need program that Gov. Nikki Haley and the S.C. House have thrown into turmoil. These realities mean that market forces alone won’t prevent a glut of heart hospitals, for example, which will drive up costs, because they have to be paid for whether there’s enough business or not, and drive down quality by reducing the volume of highly technical work each hospital does.
This is why our state, like 34 others, requires hospitals, nursing homes and some specialty facilities to demonstrate the need before they open or expand their services or purchase expensive equipment.
Or we used to. Or maybe we still do. Who knows?
In defending her decision to veto the funding for the certificate of need program, Gov. Haley claimed that it “restricts access, drives down quality and drives up costs.”
That is, at best, a stretch. As evidence, the Haley administration points to a 1988 Federal Trade Commission study that says it couldn’t find any difference in costs in states with and without the requirement in the two years after the federal government allowed states to repeal it.
Health and Human Services Director Tony Keck argues that the requirement is no longer needed to prevent unnecessary and expensive expenditures because consumers are more cost-conscious and insurers no longer just pay the bills they receive. And that is theoretically true.
What the governor has is a theoretical position that is not wholly without merit but that is, in fact, a theoretical position. Of course the same can be said for those of us who have traditionally supported the requirement: We believe that the idea behind it makes sense.
But here’s the thing: Supporters aren’t trying to unilaterally change anything. The governor is. Based on a philosophy, a theory, she has attempted to dismantle a law that has been in place in our state for decades. And she has done so not by convincing the Legislature to repeal the law but by defunding the program.
The result is that we have a law that says hospitals, nursing homes and specialty facilities can’t open or expand without a certificate of need, but no agency processing certificate of need applications, because the agency director declared, with questionable legal authority, that the statutory requirement had been suspended. And we have a state agency filing a lawsuit against two trade associations in hopes of getting the legalities cleared up before someone sues it.
Whatever the merits of the governor’s argument, this is not a responsible way to make the policy. It certainly isn’t a conservative approach, which requires us to maintain and defend the status quo unless we can demonstrate that it is flawed.
It’s one thing to defund the Arts Commission, which provides services that people would miss, but that has no legal requirements on the public attached. Defunding a program that issues permits that are required by law is an entirely different thing. At best, at best, it creates chaos. As the governor has done here.
If Gov. Haley wants to dismantle the program, she ought to propose legislation to dismantle it, not merely strike out its funding, leaving the requirements in place and plunging our state’s health-care industry into chaos. Immobilized.
The governor should acknowledge her mistake, and DHEC Director Catherine Templeton should find a way to do what the House Ways and Means chairman made clear he expected her to do: keep the program running. If she can’t do that (and we’re not certain whether she can or not), then House Speaker Bobby Harrell and Senate President Pro Tem John Courson need to call the Legislature back into special session to either fund the program or authorize DHEC to redirect its existing funding to operate it. Relying on the Supreme Court to create a solution is a cop-out.
And the governor needs to sign that law. Then she can begin the legitimate debate, for next year’s session.