Maryland Bill Could Raise Healthcare Costs by Strengthening Regulations
A bill advancing in the Maryland General Assembly, House Bill (H.B.) 944, sponsored by Delegate Bonnie Cullison (D-Aspen Hill), is drawing scrutiny for its potential to increase healthcare costs for state residents. The bill, along with its companion Senate Bill 494, aims to strengthen Maryland’s certificate of need (CON) laws. These laws require healthcare providers to obtain government approval before expanding facilities or services.
What are Certificate of Need (CON) Laws?
CON laws grant state governments authority to regulate the healthcare industry. Proponents argue they prevent unnecessary duplication of services and control costs. However, critics contend they stifle competition and ultimately drive up prices. H.B. 944 would require healthcare providers to provide 90-day advance notice to the Maryland Health Care Commission (MHCC) before undertaking “material change transactions,” including mergers, acquisitions, and certain real estate deals. The MHCC could then approve the transaction or initiate a lengthy “public interest review” potentially leading to denial.
The North Carolina Case Study: WakeMed and Duke University Hospital
The potential pitfalls of CON laws are illustrated by a recent legal battle in North Carolina. WakeMed Health and Hospitals and Duke University Hospital clashed over approval for a linear particle accelerator (LINAC) for cancer treatment. After an initial approval for WakeMed was overturned by an administrative judge, both parties ultimately dismissed the case after reaching an undisclosed settlement. This case highlights the complexities and potential for anticompetitive behavior inherent in CON regulations.
Impact on Healthcare Services
CON laws aren’t limited to major facilities; they can restrict access to a wide range of services. They have been shown to prohibit online vision tests, less invasive colonoscopies, mental health facilities, addiction treatment centers, neonatal intensive care units, specialized brain injury rehabilitation, freestanding birth centers, new MRI machines, and other medical imaging services.
Maryland’s Stringent CON Rules
Maryland already has some of the most stringent CON rules in the nation. These regulations previously delayed the opening of a hospital in Prince George’s County due to concerns about size, and cost. They also limit the size of ambulatory surgical centers, with most centers restricted to only two operating rooms.
Opposition to the Bill
H.B. 944 faces opposition from stakeholders like the Maryland State Medical Society (MedChi). While not opposing all CON laws, MedChi CEO Gene Ransom warns the bill could add unnecessary costs. The Maryland Chamber of Commerce also opposes the legislation, arguing it would create an expansive regulatory review process impacting a wide range of business transactions and potentially increasing costs and delaying services.
Protecting Incumbents, Discouraging Innovation
Critics argue that by attempting to prevent consolidation, regulations like these protect existing providers from potential disruptors who could offer cheaper services. Private investors may also be discouraged from investing in Maryland’s healthcare space due to the high regulatory burden.
Future Trends and Implications
The debate over H.B. 944 reflects a broader national conversation about the role of regulation in healthcare. While proponents aim to control costs and ensure access, opponents argue that excessive regulation stifles innovation and ultimately harms consumers. If passed, Maryland could become “the most restrictive environment in the country” for healthcare providers.
FAQ
Q: What is a Certificate of Need (CON)?
A: A Certificate of Need is a government approval required before healthcare providers can expand facilities or services.
Q: What are the potential consequences of H.B. 944?
A: The bill could increase healthcare costs and limit access to certain services by adding more regulatory hurdles.
Q: Who opposes H.B. 944?
A: The Maryland State Medical Society and the Maryland Chamber of Commerce are among those opposing the bill.
Q: What is the purpose of CON laws?
A: Proponents say they prevent unnecessary duplication of services and control costs.
Did you know? North Carolina’s CON laws recently led to a legal dispute over access to cancer treatment, highlighting the complexities of these regulations.
Pro Tip: Stay informed about healthcare legislation in your state to advocate for policies that promote affordable and accessible care.
Want to learn more about healthcare regulations and their impact on your community? Explore our other articles on healthcare policy and access to care.