How Michigan Benefits From Certificate of Need

Michigan’s CON process assures adequate care to low-income areas:

  • 13 out of the Top 25 poorest zip codes in Michigan are within the City of Detroit. These 13 zip codes account for over 95,000 households with an average median income of $21,196. Five hospitals are within the City of Detroit and 13 hospitals are in Wayne County. 15 out of the Top 25 zip codes with highest percentage of people below the poverty level are in the City of Detroit.
  • Alpha, Michigan (zip code 49902) is located in rural Iron County. Average household median income is $23,000 with only 60 households. Residents have access to an acute hospital within thirty miles.  Conway, Michigan (zip code 49722) in Emmett County has 48.6% of people below the poverty level.  They have access to an acute hospital within 6 miles.

Michigan’s CON process provides accessibility to services:

  • Currently, Michigan has over 26,000 acute care hospital beds. The predicted need is 17,355 beds, thus provided an excess of over 8,500 beds to residents.
  • A 2015 study issued by the Mercatus Center suggests Michigan is shorting residents by over 12,000 beds through the CON program. If the current bed situation has an excess, why would Michigan need another 12,000 beds? If Michigan were to add 12,000 more acute beds, that would add $18.0 billion in unneeded health care costs.
  • Michigan residents also have adequate access to radio-logical diagnostic services: 90% of the 83 counties in Michigan provide CT scan services and 80% provide MRI services. Also 88% of Michigan counties have at least one surgical service location.

Michigan’s CON process increases safety in hospitals:

  • By regulating specific services such as open heart surgery and organ transplants to a smaller portion of hospitals, it enables a higher volume of those procedures to be performed by the same surgical team over and over. Thus creating an “expert” in the field and higher success rates. Why would you go to a hospital that only performs three open heart surgeries a year?
  • According to a recent U.S. News & World Report analysis, patients who have surgery at low-volume hospitals “are more likely to die or suffer complications when treated by doctors who only occasionally see similar patients rather than by experienced teams at hospitals with more patients and established protocols.” http://www.usnews.com/news/articles/2015/05/18/risks-are-high-at-low-volume-hospitals.

Michigan’s CON process creates efficiency and cost-containment:

  • On average, Michigan has the lowest health care insurance premiums among private-sector employers who provided health care benefits for both single and family plans within the 5-state Great Lakes Region. Michigan also has the lowest premiums among companies with 1000+ employees.Michigan Lowest Premiums
  • On average, Michigan has more discharges and lesser average charge per procedure than the national average, CON states and Non-CON states. This indicates that Michigan’s CON process is more efficient in both productivity and cost. Based on the following procedures:  joint replacement, PCI, MRI, major cardio procedure, stroke, COPD and hypertension.  More info found here: EAM Study Cost & Discharge Analysis

Data & Sources:

25 lowest income zips Below Poverty Rural MI

Michigan Senate votes against new hospital in Clarkston

December 4th, 2014

Lansing, Michigan:  Today the Michigan Senate voted against Senate bill 1073 (11-26), a bill allowing McLaren Health to build a new hospital in Independence Township by amending the Certificate of Need (CON) standards.

Friends of Certificate of Need, a 90 plus coalition of businesses, purchasers, health systems, and unions have opposed the bill since its conception claiming rising health care costs due to unneeded projects such as McLaren’s proposed hospital place increasing pressure on employers to reduce jobs, cut benefits and/or increase costs for workers.  The coalition also raised concerns about politicians favoring one corporation over another through policy revisions.

“Lawmakers in Michigan have done the right thing by not allowing this bill to pass.  We thank them for caring about health care cost containment for the state.  A ninth hospital in an area with too few of patients would have caused significant financial stress to the healthcare industry,” stated Bret Jackson, president of the Economic Alliance for Michigan.  “We also want to thank the Friends of Certificate of Need for all their hard work.”

“We’re pleased that there is a clear recognition in the Michigan Senate that it is critical to maintain the CON process and contain health care costs wherever possible,” says Delaney McKinley, director of human resource policy for Michigan Manufacturers Association.

McLaren has requested the Michigan Supreme Court for an appeals permission but still awaiting a decision.

Hospital project may cost Flint area 500 jobs

November 28th, 2014:  “Genesys Health System claim that a new McLaren hospital just 21 miles south on I-75 would force Genesys to scale back its expansion plans. They estimate that about 10 percent of patients — or about 7,000 discharges annually — would not go to Genesys.

“Will it hurt us? Yes, it will,” said Betsy Aderholdt, president and CEO of Genesys.

It would mean about a $25-million change in Genesys’ bottom line and an estimated current 500 jobs lost, she said.”

Read More via MLive (Flint Journal):  http://www.mlive.com/news/flint/index.ssf/2014/11/genesys_officials_clarkston_ho.html

Lawmakers should be looking for ways to lower the cost of health care

Detroit News Op-Ed:  “It is easy to take risks when you are using someone else’s money. The cost of building and running hospitals is paid by you and me through our health insurance premiums and tax dollars.”  Read More: http://www.detroitnews.com/story/opinion/2014/10/21/mclaren-certificate-need/17631189/

Powerful Coalition Supporting Certificate of Need

McLaren Health Care Inc.’s move to secure legislative approval to build a new $300 million hospital north of Detroit has once again generated support across the state for Michigan’s certificate-of-need regulations.

“You can create enough care that will meet the needs, but not enough that you have costs galore,” – See more at: http://mibiz.com/item/21901-coalition-urges-state-to-preserve-certificate-of-need-process#sthash.z7GUY03h.dpuf

For a list of Friends of Certificate of Need members go to:  https://friendsofcon.com/our-members/

Friends of Certificate of Need Denounce Senate Bill

NEWS RELEASE

For IMMEDIATE RELEASE

Contact: Kelly Rossman-McKinney
(517) 749-0529 (c), 517-487-9320 (o)
Tuesday, Sept. 16, 2014 

Friends of Certificate of Need denounce Senate bill that would ignore health care cost containment

LANSING, Mich. – The Michigan Senate propped up McLaren Healthcare’s last-ditch effort to build a $300 million, 200-bed hospital tower in Independence Township by introducing legislation Tuesday that would circumvent previous state rulings against the unnecessary overbuild of such a facility.

However, Senate Bill 1073 was met by resounding disapproval from a large coalition of Michigan business, labor and health care organizations.
The Friends of Certificate of Need – which includes a broad range of Michigan business, consumer, hospital, payer, union and other associations – actively supports Certificate of Need as an effective tool to avoid unnecessary costs while improving access to quality health services.

“This (legislation) represents a not-so-thinly disguised effort to give McLaren Healthcare something that the state’s Certificate of Need approval process has repeatedly rejected,” said Bret Jackson, president of the Economic Alliance for Michigan. “The end result undermines an essential state process that is specifically designed to keep health care increases to a minimum.”

Judge Colleen O’Brien of Oakland County Circuit Court ruled against McLaren in December after it had filed suit in June 2013 to reverse the original Department of Community Health decision to deny the application – which is now more than two years old. Under its original February 2012 Certificate of Need application, McLaren asked to move 200 unused beds from its McLaren Oakland Hospital in Pontiac to a new hospital it plans to build.

The Economic Alliance for Michigan has focused on the rapid rise in health care costs because it places an increasingly difficult burden on Michigan businesses and generates pressure to reduce jobs, cut benefits, and/or increase costs for workers.

“The Certificate of Need program exists to balance cost, quality and access and it has served Michigan residents and taxpayers well,” said Grand Rapids Chamber of Commerce vice president Andy Johnston. “Like anything, it can always use review and discussion, but with the changes occurring in our health care system, now is not the time to eliminate or weaken CON.”

“The Affordable Care Act is already placing a significant burden on the small business community, many of whom are seeing insurance premiums rise by between 20 percent and 100 percent, or more,” said Scott Lyon, senior vice president of the Small Business Association of Michigan. “Smart decisions about value purchasing, including taking a hard look at quality and costs should be uppermost in the minds of legislators.”

“We need lawmakers to understand that health care costs are still rising, and rising costs force premiums higher,” Lyon added. “As premiums rise, fewer small business owners can afford to offer coverage to their workers. Legislative efforts should be focused on finding ways to contain health care costs for individuals, small and larger businesses alike.”

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