A Double-Edged Sword
Good afternoon. I am Peter Lund, MD, president of the Pennsylvania Medical Society based in Harrisburg.
Let me begin by thanking this committee for hosting today’s hearing. We appreciate the opportunity to provide testimony.
We’re here to discuss the various aspects of House Bill 305 including certificate of need (CON) and prohibition of referrals.
Certificate of Need
Before I get into the issues, I want to first say that I do not envy your position as members of this committee.
Not long ago, my colleague Dr. Bruce MacLeod testified on behalf of the Pennsylvania Medical Society in front of another Pennsylvania House of Representatives committee about various health care issues, and CON was discussed.
At one point in time, Pennsylvania did have a CON. And, before it was dropped in the 1990s, everyone complained that it wasn’t working correctly. Essentially, it was rationing care and decreasing access. And it was a process that often put legislators in the position of having to choose to support one local entity over another in a race to secure CON approval.
Today, we have the opposite situation. Some people are concerned that increased utilization of healthcare services is the result of a lack of a CON and will impact the overall costs of health care.
This truly is a great dilemma. Surely it’s a double-edged sword and I can appreciate the difficult position members of this committee have with HB 305.
Pennsylvanians want convenient access to care. But there are concerns related to costs.
Ultimately, as a result of HB 305, members of this committee have been told to either pick patient access by allowing free markets to do their job, or pick reduced costs by limiting the amount of care provided.
There is a third option: we can find a way to make things work so that HB 305 doesn’t go against the public’s desire to have access to care, but also manages expenses.
The Pennsylvania Medical Society does not support going back in time and reliving the problems associated with a CON. And, the way HB 305 is written today, it reminds us much of the unsuccessful past CON. We should learn from history.
Furthermore, according to Mark J. Botti, Chief, Litigation I Section at the US Department of Justice’s Antitrust Division, CON laws “pose a substantial threat to the proper performance of health care markets.” In this testimony given by Mr. Botti in front of the CON Special Committee of the State House of Representatives of the General Assembly of the State of Georgia in 2007, the DOJ claims that CON will undercut consumer choice, weaken markets’ ability to contain health care costs, and stifle innovation.
An exact quote from Mr. Botti’s testimony sums up everything in a nutshell. He says, “They (CON laws) do not provide an economic justification for depriving consumers of the benefits of free markets.”
I highly recommend that this committee review Mr. Botti’s testimony as it is very pertinent. It also comes from solid research conducted by a staff of Ph.D.s. If you do not have a copy of this testimony, we’ll be happy to share a copy with you.
The Pennsylvania Medical Society does believe there are things that can be done to address unnecessary utilization.
For example, we believe that the marketplace is looking at services specific to its service area. The larger health insurance companies like Highmark and Independence Blue Cross are using clinical qualifications and prior authorization to limit unnecessary utilization. Specialty societies have developed appropriateness criteria to secure proper utilization of services in their field of expertise.
As long as utilization standards have input from the practice community, this entire debate ends and HB 305 is unnecessary. Therefore health insurance policy can address quality and access while managing costs.
Equally important, it lessens the cookie-cutter approach that has been used in the past and prevents the old scenario that permits the existing facilities to prevent or limit competition. Under the old CON, existing facilities could prevent newer better facilities from meeting the “Need” thresholds. Plus, money also bought some approvals. In either case, neither was a satisfactory solution.
Prohibition of Referrals and Claims of Payment
HB 305 also attempts to prohibit self-referral by health care providers.
On the surface, this sounds logical to avoid questions related to ethics and kickback. But, like CON, it’s a double-edged sword. And once again, I do not envy the position that this committee has with HB 305.
On the surface, this portion of HB 305 attempts to demonize providers, painting them as only interested in making money. Those who attempt to demonize providers on this issue will use broad brushstrokes and make outrageous statements to make all providers appear less interested in care and more interested in making a buck.
But that’s where the double-edged sword comes into play.
Patients who have just been diagnosed with a condition find greater comfort in knowing that their doctor can schedule immediate treatment without sending the patient scrambling to another facility, sometimes many miles away. Patients also find greater comfort knowing their current doctor will be following them through the necessary procedures.
Imagine the following scenario. A patient enters their physician’s office with a specific complaint related to their health. The physician examines the patient and determines that the patient is in need of a service that could be provided through a surgicenter in which the physician has a financial stake.
If HB 305 were to be put in place, the patient would not be allowed to utilize the surgicenter.
Instead, the patient would need to schedule this procedure at another location, which may mean switching doctors.
This adds unnecessary stress on the patient. It simply delays patient treatment, while driving up patient inconvenience and possibly costs.
It’s even more of a double-edged sword in communities where the patient’s only option would be to travel for care. Why shouldn’t patients in these communities be allowed to access care within their communities? We should not discriminate against these patients.
Again, the Pennsylvania Medical Society understands the intent of this part of HB 305. There can be suspect providers taking advantage of a situation. However, why punish the patients of Pennsylvania. This would be unfair to the overwhelming majority of physicians who have their patients’ best interest in heart. It would also be unfair to the millions of patients who are inconvenienced due to geography.
Conclusion
I’ll conclude by restating that I do not envy the position that members of this committee has been placed into as a result of HB 305. This is truly a double-edged sword because ultimately it comes down to access.
It’s almost political suicide if you take a stance directly on one side or the other – either access or cost. Remember who we work for, the patients of Pennsylvania. And the patients of Pennsylvania want access to timely and quality healthcare.
Thank you.
Last Updated: 9/3/2008