America has struggled to balance access to hospital services with escalating prices for those amenities over the past 50 years. While there are many factors contributing to this challenge, the state certificate of need (CON) laws—those requiring state approval for hospital expansions and new construction—are examples of regulations that were designed to help but have had unanticipated negative side effects.
In 1964, New York became the first to grant a state this power with a CON law. By 1978, with Federal encouragement, 36 states had enacted CON laws. The states reasoned if they could reduce unnecessary duplication of facilities, equipment, and services, costs would decrease and access would improve. Over time hospitals have shifted from a core mission of cooperation to one of competition, and it has become clear CON laws are in fact, discouraging competition, propping up prices, and aiding the creation of monopolies. The Kaiser Family Foundation reported health care costs are 11 percent higher in states with CON laws compared to states without these restrictive statutes.
The evidence is now clear CON laws not only increase costs, but also restrict access for the underserved, especially in rural areas. Hospital bed access is expressed in the number of beds/1,000 population; on average, there are 3.62 beds/1,000 people in the United States. Recent studies by Strattman and Russ found states with CON laws have 1.31 fewer beds/1,000 overall. Kaiser Foundation found Washington and Oregon have the lowest bed ratios in the nation, at 1.7 beds/1,000, with Kitsap County having a woefully inadequate ration of 1.30 beds/1,000. In short, the evidence supports the fact that CON regulations worsen access for rural residents.
Due to these negative consequences, 14 states discontinued their CON programs, New Hampshire being the most recent one to repeal, effective in 2016. As part of Senate bill 5883, the Washington State Legislature is evaluating the effectiveness of the Certificate of Need Program at the Department of Health.
In Washington State, CON regulations encourage appraisal of the needs for a particular geographic region, usually a county, and as a part of that evaluation, regulators solicit input on behalf of the public or “affected” persons. It is vital the public understands the complex CON process clearly, so we may actively participate. In Kitsap County, the CON regulations currently support a monopolistic system by default; a single entity “owns” every authorized hospital bed. Each of us living within Kitsap County are “affected” by this critical decision, but not all seem to comprehend the long-term consequences of relocating 100% of available hospital beds to Silverdale.
Recently, letters to the editor have suggested “bringing in another corporation to build a hospital in Bremerton” as a viable solution. While I endorse this sentiment wholeheartedly, our state CON laws will prohibit this as a feasible choice. CHI Franciscan controls all of the beds available for Kitsap County, except for 11 psychiatric hospital beds in which they have no interest. No hospital corporation will step forward, tear down an aging facility, and build a new one for the miniscule potential 11 hospital beds would serve.
The CON process can take a minimum of one to two years and cost between $50,000 and $5 million depending on time-to-approval and the appeals process. Once both phases are completed in Silverdale, ANY city or corporation wishing to build or remodel the Bremerton campus will be required to complete the CON process. It is highly unlikely a new organization will focus on the Olympic Peninsula for some time due to these massive investment requirements.
The Washington State Department of Health granted reconsideration of the decision to relocate EVERY single hospital bed to the Silverdale area. Reversing this decision would not oppose the Phase 1 hospital expansion in Silverdale, which is already under way. Encouraging the State to reevaluate this decision is trying to ensure adequate health care choices remain in two locations. If the City retains 85 hospital beds, the possibility of tearing down, rebuilding, or relocating the Harrison Campus becomes a reality.
The moment to change our destiny is now. It is imperative local lawmakers, City representatives, and the entire community engage in this multifaceted process and stand up, together, for choice, competition, better access, and lower health care costs for every man, woman, and child residing in Kitsap County. In my humble opinion, supporting this reconsideration endeavor is categorically in the best interest of this community. Please attend the public hearing scheduled for Friday September 8th at the Bremerton School District Conference Room on Marion Street and share your thoughts. This is our chance to be on the right side of history.