Loosening of state regulations may open door for new health care construction projects

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Rendering of the 82-bed Lee Health tower in Coconut Point

Advocates of loosening state government oversight of health care scored major victories during this legislative session, foremost of which was their long sought-after repeal of restrictions on new hospital construction in Florida, the Fort Meyers News-Press has reported in an extensive story.

Assuming Gov. Ron DeSantis signs off on the changes, it could soon clear the way for two new health centers in south Lee County that opponents are currently suing to keep from being built.

Health industry insiders say other more specialized medical facilities could challenge the market dominance of the region’s existing hospital systems.

House Bill 21 would end the state’s Certificate of Need (or CON) review of general hospitals, such as the proposed facilities Lee Health and HCA Healthcare are proposing for Estero. This would also end such oversight of “tertiary hospital services,” including new neonatal intensive care units and organ transplant centers, starting July 1.

CON reviews for new specialty hospitals, such as new children’s health centers, would end in 2021.

Florida’s nearly 50-year-old CON law requires health care providers to get state approval to build new health centers or expand certain, complex medical services. Facilities subject to this oversight include hospitals, nursing homes, hospice centers and intermediate care facilities for the developmentally disabled.

Proponents argue that ending the state’s ability to veto proposed new hospitals will encourage more health care competition and, by extension, help drive down prices.

“It just makes no sense to me why the government would have a say in whether a hospital can open or not when that should be a question dictated by the market,” said Rep. Ray Rodrigues, R-Estero, chairman of the House Health & Human Services Committee. “I think competition is always good for consumers.”

Lee Health won state approval last year for an 82-bed hospital planned for its outpatient medical campus just south of the Coconut Point shopping center in Estero. State regulators simultaneously approved an application from HCA Healthcare for an 80-bed health center less than five miles away.

This prompted immediate objections from the Naples-based NCH Healthcare System, which is vying for a share of patients in the fast-growing area. Physicians Regional Healthcare System, another Collier County hospital operator, filed its own objections to the plan.

Those objections are still pending a decision from a state administrative law judge. A repeal of hospital reviews would presumably make those legal challenges go away.

But Lee Health, a public hospital system serving disproportionate numbers of under-insured patients, has long opposed a full elimination of state hospital reviews.

As opponents of such deregulation argue, leaving hospital construction up to the free market might allow health centers specializing in lucrative medical specialties to siphon away higher-paying patients from safety-net providers like Lee Health.

“We’ve never had an issue with competition, as long as it was fair,” said Larry Antonucci, president and CEO of Lee Health. “But the way this law is written, it allows anybody to build any sized hospital without even a requirement for an emergency room, without a requirement to accept Medicaid, and without a requirement to take care of uninsured patients. So, I think it really puts us at a disadvantage.”

See the complete article here.

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