In a phone interview with Joanne Salsgiver, Director of the DOH Division of Acute and Ambulatory Care, NewsLanc asked if the State would hold any form of regulatory veto over a health facility that blatantly duplicated nearby services. Salsgiver’s answer was simple and to the point: There is no Certificate of Need program in the State of Pennsylvania.

Pennsylvania is one of fourteen states in the US that do not operate a Certificate of Need (CON) program. In the other 36 states, such programs serve to assess the feasibility and public need for any proposed health care facility. But without a CON requirement in place, the State Department of Health (DOH) will hold no authority to judge the worth of Lancaster General Hospital’s proposed facility development in West Earl Township, less than 3 miles away from Ephrata Community Hospital.

According to an article posted by the National Conference of State Legislatures,

“The basic assumption underlying CON regulation is that excess capacity (in the form of facility overbuilding) directly results in health care price inflation. When a hospital cannot fill its beds, fixed costs must be met through higher charges for the beds that are used. Bigger institutions have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual needs.”

The ultimate value of these CON laws, however, has been a topic of debate for decades. Arguments have generally conformed to the usual ‘regulation versus deregulation’ protocol, with CON supporters contending that open market forces may not always seek the best interest of public health, and with CON opponents alleging that government regulation decreases competition and drives up costs.

Pennsylvania had a CON program of its own until the State Legislature allowed its legal provision to expire in 1996. While the program was in place, PA code required that “the construction, development or other establishment of a health care facility or health maintenance organization” be authorized by the Department of Health with a CON.

The CON review process scrutinously asked the question of whether a proposed medical facility would actually benefit public health in its area of service. Among many others, the assessment included the following considerations:

• “Whether there is any appropriate, less costly or more effective alternative method of providing the services available.”
• “Whether the proposed service or facility is compatible with the existing health care system in the area.”
• “Whether it will have an inappropriate, adverse impact on the overall cost of providing health services in the area.”
• “The impact of the costs of providing health services by the applicant resulting from the construction”
• “That in the case of new construction, alternatives to new construction such as modernization or sharing arrangements have been considered and have been implemented to the maximum extent practicable.”

None of these considerations, however, will be authoritatively weighed against LGH’s West Earl project. Meanwhile, Ephrata Community Hospital currently operates at a lower capacity than the national average for hospitals of its kind. An official from the existing Ephrata Hospital recently told NewsLanc that the institution not only provides adequate capacity for the local population, but also holds a long-term strategic plan to expand with future population growth.