Act 41 changes the capital expenditure thresholds by any health care facility requiring CON from $2.5 million to $10 million and from $1 million to $3 million on diagnostic equipment. The new law limits the geographic boundaries of entities that can object to a CON application to a 35-mile radius, and it allows private doctor groups to operate imaging facilities without CON as long as the applicant physician is present 75 percent of the time. It also stops hospitals from using “medical use rights” to block competition.
Act 41 is a modified version of House Bill 198, which failed to make it out of the House. The Senate reworked the bill to include less-sweeping changes. The new law does not allow hospitals to establish stand-alone emergency rooms or cardiology ambulatory surgery centers, for example.
This reform should allow more health care innovation in the state, says Matt Glans, a senior policy analyst for The Heartland Institute, which publishes Health Care News. “Like all industries, when the U.S. health care sector has improved, it’s been from competition and innovation born in the free market, not because of government regulation.”
In theory, CON laws allow a critical assessment of demographics needs and curb unnecessary spending, but they have had adverse effects, says Glans.
“One of the big problems with CON laws is the inappropriate influence given to competitors during the vetting process,” said Glans. “When a provider applies to enter a new market, competitors often use the CON process to protest potential competition, which is currently allowed in many states. Repealing CON laws ends a burdensome and unnecessary regulation that stifles state health care markets.”
Andrew Whitney ([email protected])writes from Lansing, Michigan.