It's NC Hospitals vs. Koch Brothers in CON Battle

The push to eradicate certificate of need statues in several states is spearheaded by a political advocacy group that claims a repeal of the regulations would "lower healthcare costs and improve medical access for millions of citizens."

The North Carolina Hospital Association is expecting to run out the clock this week on H161, a seemingly innocuous bill that would make the bobcat the official cat of the Tar Heel State.

The bill is not expected to pass before session adjourns and hospital lobbyists usually don't monitor bills honoring our feisty feline friends.

In fact, nobody was paying much attention to H161 until it was commandeered in a North Carolina General Assembly committee this spring and radically transformed into a repeal of the state's certificate of need law, effective in 2021.

Even now, there is no language in H161 to express its new intent, owing to the mechanism of legislative committee politics.

"They adopted the new language in committee but never reported it out," says North Carolina Hospital Association general counsel and lobbyist Cody Hand. "Your readers are going to look at a bobcat bill."

Standard Practice in NC Lawmaking

It sounds sneaky, but Hand says there is nothing nefarious afoot. "It's standard practice in North Carolina," he says. "Once the deadline is passed to file bills, they have to find something else to stick it on."

Besides, NCHA knew this bill was in the works.

Americans for Prosperity, the conservative political advocacy group funded by billionaires Charles and David Koch, has for several years led a public call to eliminate CON laws in several states, including North Carolina.

In a March 14 open letter published in the Ashville Citizen-Times, AFP spokesman Joseph Kyzer urged "North Carolina lawmakers (to) seize an opportunity in 2016 to save taxpayer money, lower healthcare costs, and improve medical access for millions of citizens by removing government barriers to patient care."

CON laws are "a systematic scheme to protect hospitals from competition" that limit access to healthcare and result in higher costs for consumers he wrote.

"Large hospital systems and bureaucrats pull the strings in our state's healthcare system by denying new medical practices permission to provide care and compete with entrenched power players," he wrote.

A Distinct Competitive Disadvantage

"Known as Certificate of Need laws, our state has uniquely stringent regulations that restrict new practices in specialty fields like orthopedics and outpatient surgery."

Hand points out that the AFP argument doesn't tell the entire story of the unique responsibilities, mission, and open-door, money-losing mandates that put hospitals at a distinct competitive disadvantage when compared with independent subspecialists.

"We have patients in beds 24/7 and we have emergency rooms that take anyone who walks in anytime of the day," he says. "We don't operate like other businesses and as such we need some protections that CON offers to make sure we have some money-earning procedures to offset the costs of the other services that we lose money on."

Kyzer counters that hospital lobbyists such as Hand "make dire predictions that CON reform will cause financial collapse for their clients, but this is a common tactic of special interests seeking to preserve regulations that benefit their bottom lines."

"Lawmakers," he says, "should put patients first and consider the cost their neediest constituents bear in a system fixed for large providers whose financial interests exercise far more influence in Raleigh."

The bobcat bill isn't going anywhere this session, but Hand expects the CON bill will be back again next year and NCHA is prepping for a fight.

AFP is very well funded, and the Koch brothers are generous donors to state and federal elected officials who support their policies. 

Anyone who's ever been through a CON repeal fight is rolling their eyes right now at AFP's predictable line of half-truths.

 A show of hands for anyone who thinks that an orthopedic or outpatient surgery center in North Carolina, one of 19 Medicaid non-expansion states, would "put patients first" and warmly embrace 24/7/365 access to care for any and all indigent or even Medicaid patients if only these oppressed free market cherry pickers were liberated from the constraints of draconian CON laws.

Anyone?