Florida Record

Monday, September 16, 2019

Florida repeals state hospital need-based permitting process; observers wait to see effects on state's health care


By Kyla Asbury | May 22, 2019

| KHSS [Public domain]

TALLAHASSEE — With Florida's recent decision to repeal its certificate of need (CON) law, a Washington, D.C., attorney is curious to see how the repeal will play out for the state's health care system.

"I think that it will be interesting to see how what, if any, impact it has in health care in terms of quality and cost because there is such a spirited debate on both sides of the issue in terms of whether this is positive or not," said James M. Burns, a health care antitrust partner with Akerman LLP in an interview with The Florida Record.

Burns said he doesn't think there would be challenges to the repeal in court, adding: "I’m not aware of any other state being challenged in the court." 

James M. Burns | Akerman LLC

The Florida state legislature enacted legislation in April to eliminate the need for a certificate of need process, which would mean entities could build new or improve existing hospitals without first obtaining the state's permission.

Burns said about 35 states currently have CON laws in place. He said both the Federal Trade Commission (FTC) and President Trump's administration have spoken out against CON laws.

"The Federal Trade Commission has very aggressively taken the position that these types of laws are not good and should be repealed," Burns said. "They have consistently submitted comments to state legislatures whenever requested indicating their views that these laws can have anti-competitive effects."

In states where CON laws still exist, any entity that wants to build a new hospital or expand a hospital or increase the number of beds must show the state there is a need for a hospital or more beds in that area.

Burns said with the law being repealed, Florida could see additional hospitals being built.

"There are arguments both for and against having these laws that are pretty well defined, and it’s really just a matter of opinion whether they’re a good thing for consumers and patients or not," Burns said. "Those who advocate that these are beneficial contend that it helps ensure hospitals are spread out all around the state so that all citizens have access, as opposed to if hospitals were only built in the richest communities where people could pay more for services."

Burns said another argument typically advanced by those who think CON laws are helpful comes in health care, particularly with specialized procedures, where hospitals need to do a sufficient number of procedures to gain expertise.

"By limiting the number of facilities in the state … you help to ensure that the entities that have been licensed to do it will have a sufficient enough number of procedures to enhance the quality of the care that they’re able to give, which would be to the benefit of the patients," Burns said. "On the other side of the coin, people who think that CON laws are anti-competitive and harmful say if you had twice as many hospitals, maybe the price of procedures would go down."

Florida stands as one of the largest states to repeal its CON laws. But California, the largest state in the U.S., also has repealed its CON system, Burns noted.

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