By David Flemming
UVM economist Art Woolf has a must-read piece in the Burlington Free Press titled “Vermont’s record on health care spending deflates confidence.” In it he notes, “Over the last two decades Vermont went from being a low health-care cost state with a small percentage of uninsured to one of the highest spending states.” Certificate of Need laws as exemplified by the Green Mountain Care Board vs. Copley Hospital is a good example of why that is.
According to patients, Copley Hospital in Morrisville, Vermont, is a model of quality healthcare. When the GMCB issued a Certificate of Need (CON) to Copley Hospital for replacing its surgical center in February 2016, it did so expecting that there would not be “any appreciable change in projected surgical volumes.” Copley had been completing around 1,800 surgeries annually. In the past few months, however, Copley has begun “taking in more money from the surgical center than was originally approved as part of the CON process” because of an increase in surgeries. This money has nothing to do with price increases, since Copley is “one of just three hospitals in the state … that did not propose to increase prices in the upcoming year.” Rather, there has been an increase in demand for Copley’s services through “word of mouth.”
That Copley is efficiently meeting a pretty clear “need,” providing superior service at lower price, is irrelevant to state regulators. What matters to the Green Mountain Care Board (GMCB) is that Copley is taking in more revenue than expected, in violation of their bureaucratic spread sheet. And, taking business away from the Crown Jewel of bureaucratic design, UVM Medical Center. This cannot be allowed to stand!
In an era of ever increasing healthcare costs in Vermont, it would seem like a foregone conclusion that GMCB would ask Copley how they are increasing their surgery services with the same resources, so that they can advise other hospitals to do the same. Art Mathisen, CEO and President of Copley Hospital remarked “we’re not hiring any orthopedic surgeons. Rather, Copley is completing more surgeries with the same staff.
Shockingly (or, actually, not so shockingly), instead of praise, Copley has received condemnation from the GMCB, and the GMCB is currently considering whether to rescind the CON approval for Copley’s new construction.
Dr. Allan Ramsay, a former GMCB member, claims that Copley Hospital is not equipped to handle complex surgeries. “That’s not a trend that we want to see in a smaller community hospital … it does generate revenue, but there are other surgical facilities that are better suited to do complex surgical cases.” Translation: We want UVM Medical Center to get that money regardless of what patients want.
Maureen Usifer, a current GMCB member, says that “when I talk to anyone in the Burlington area, anyone who gets a surgery goes to Copley.” Her comment is intriguing: Vermont’s largest hospital, the University of Vermont Medical Center is in Burlington, and has long been seen as the standard in Vermont healthcare. Not only are patients in the surrounding area flocking to Copley for surgery, patients from outside the area are as well. The patients have voted with their pocketbooks to undergo surgery at Copley. Now, the Green Mountain Care Board is attempting to overrule their decisions because it deems certain medical facilities as “better suited” than the ones patients frequent.
The Certificate of Need process is an antiquated-old relic of a failed federal policy. The Federal Trade Commission has implored states to abandon it — as most states have — because it “pose(s) serious anticompetitive risks that usually outweigh their purported economic benefits.” The best way for the Green Mountain Care Board to show leadership in healthcare innovation is to call for the legislature to repeal Certificate of Need, which would remove the temptation to micromanage hospitals like Copley that are already leading the way in healthcare.
David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.