At present, Pennsylvania is one of fourteen states in the US that do not operate a Certificate of Need (CON) process to regulate the introduction of new medical services or facilities—like the one proposed by Lancaster General for West Earl Township, about three miles away from the well functioning Ephrata Community Hospital. But, if State Representative Phyllis Mundy (Luzerne County) has her way, CON requirements will return to Pennsylvania, perhaps as early as next spring.

The Health Care Facilities Act (HB247), sponsored by Mundy last February, would reintroduce the CON process, a move that Mundy has called “critical to helping rein in the escalating costs of health care.” The bill is currently being considered by the House Insurance Committee. In her April testimony before the committee, Mundy stated that “one of the significant health care cost drivers is unnecessary duplication of expensive medical technology and services.”

Mundy asserted that the removal of CON requirements has sparked a costly and unnecessary “technological arms race” among Pennsylvania’s healthcare providers. Since the State’s CON program expired in 1996, Mundy noted, the number of licensed ambulatory surgical centers in Pennsylvania increased by 400%, from 44 to more than 230.

“These costs are ultimately passed onto consumers,” Mundy said.

Elaborating on the purpose of this bill, Mundy said that it would serve to

“…reconfigure our health care system by considering community health care needs on a regional basis so that capital expenditures on medical technology can be prioritized for certain areas but limited where the market is already saturated….Opponents of CON will tell you that the duplication of these health care services is about ‘choice’ and ‘competition.’ I believe it’s about profit. We need to recognize that competition is not always the solution; sometimes it’s the problem. And in this case, it’s driving people who need health insurance out of the marketplace.”

To reign in these excessive costs, House Bill 247 would:

• Establish local review committees to review CON applications and provide recommendations to the Department of Health
• Require applicants to demonstrate that there is not a more cost effect alternative to providing their proposed services
• Require applicants to demonstrate that their proposed service would not adversely affect healthcare costs
• Involve the Pennsylvania Health Care Cost Containment Council in the review process

The CON process would be engaged for any hospital-based improvement or project costing more than $2 million. (Some estimates for LGH’s proposed West Earl facility have reached as high as $155 million.)

According to Art McNulty, Executive Director of the Insurance Committee, HB247 would “absolutely” relate to a project like the one proposed for West Earl. McNulty even added that the scenario sounds quite similar to one that has occurred in Representative Anthony DeLuca’s Allegheny County district. DeLuca is Chair of the House Insurance Committee.

Not personally familiar with the LGH plan or the service capacity of Ephrata Community Hospital, McNulty qualified that a CON review process could, under certain circumstances, approve a project that did not appear reasonable at face value. For example, McNulty said, if LGH were proposing the introduction of particular services and technologies unavailable at Ephrata Community, a CON would likely be granted.